Google to Alphabet: smart move but not radical at all

First published in Marketing Magazine 11th August 2015

The move from Google to Alphabet is far from radical; it’s well trodden as a business model by FMCG giants like P&G and Unilever, argues Justin Basini, co-founder and CEO at ClearScore.

With the creation of a holding company called Alphabet they are starting to look more like a Procter & Gamble or Unilever

The blog post announcing the rebranding of the Google into Alphabet this morning has taken everyone a bit by surprise. The markets have generally reacted positively with a 5% rise in the stock with the normal commentary both good and bad. We should admire Larry, Sergey and Eric that for once, in our world of obsessive management of investor expectations they have actually managed to steal a march on the millions of eyes watching Google.

Tradtional and well proven model

Many commentators have hailed this as a “radical” restructure adopting a model akin to Berkshire Hathaway. However, from a brand management perspective the move is treading a traditional and well proven model. With the creation of a holding company called Alphabet they are starting to look more like a Procter & Gamble or Unilever: that is a holding company with a wide portfolio of businesses and brand assets. The manifest benefits of this approach that has served the packaged good behemoths for over 100 years will deliver undoubted benefit to Google going forward.

Nobody likes companies that are too powerful, witness the fall of Tesco as it sought to become ubiquitous and got out of control

There are consumer benefits. Nobody likes companies that are too powerful. Witness the fall of Tesco as it sought to become ubiquitous and got out of control. Imagine if the brands we buy from P&G were not Ariel, Fairy, Pantene, Pampers, Gilette, Max Factor, Oral-B, Duracell, Lenor, Clearblue, Vicks but all of them called Procter & Gamble? We would start to freak out that one company could be so pervasive and dominant in our lives. As Google has broadened their offerings from search to email, to office apps, to mobile phones, to laptops, to household control, to cars; all of these being linked very clearly to the Google name creates the same concerns and worries. Moving to a house of brands under Alphabet will help manage some of these risks and drive growth.

Privacy concerns will manifest at Alphabet

The establishment of lots of different brands potentially may make it considerably harder for us to all understand where our data and information is going

Next, whilst taking the brand benefit, the establishment of a central infrastructure for Alphabet with central management and resources will allow assets to be shared across the different businesses. It is in this sharing that I think the most concerns may arise. Collection and manipulation of data, often playing close to privacy concerns, is hard-wired into Google and will therefore manifest itself at Alphabet. The establishment of lots of different brands potentially may make it considerably harder for us to all understand where our data and information is going. If I use Google search is this going to be shared with my separately branded self-driving car or my central home control unit?

Google has struggled with transparency

I’d also bet that Twitter will be an Alphabet company in the next 12 months

Brand trust is built through transparency and openness. Google has struggled with this in the past and many people don’t trust the brand. This potentially becomes much more complex in a holding company structure. For perspective, the consumer packaged goods companies have wrestled with this as well. They know a huge amount about their consumers across different brands and have experimented with cross promotion by using this understanding at a holding brand level, exploring whether consumers want a direct relationship with the P&G or Unilever brand. Results have been very patchy – people tend to be more suspicious and wary, rather than welcoming. In our hearts we like products and brands that do one thing well, rather than interacting with huge mega-corporations that know rather too much about our habits for comfort.

Alphabet is an engineering company, not an ad business

The last reason why this strategic change shouldn’t surprise is that it is a natural fulfilment of the vision that Sergey Brin and Larry Page outlined 11 years ago when they founded the Google. They have always wanted Google to be an engineering company in the broadest sense. Google is now an information and advertising business. The move to establishing Alphabet allows them to build different competencies and leverage different structures to solve a broader set of problems. Given the astonishing rise of Google and the undoubted benefit that it has brought to the world and all of us in such a short space of time this could be really exciting.

I predict that the move to Alphabet will be successful and create value for shareholders, and hopefully the world. I’d also bet that Twitter will be an Alphabet company in the next 12 months!

Why the Ashley Madison hack has done amazing things for the brand

First published in Marketing Magazine 21st July 2015

The Ashley Madison hack is fascinating, says Justin Basini, co-founder and CEO at ClearScore, as it raises interesting questions about morality, marketing and privacy.

The Ashley Madison attack is the juiciest of all hacks so far perpetrated. This is not millions of dry boring credit card details only interesting to fraudsters. No, this is the details of 37m people who have, or want to have, affairs. Their details, including names, photos and even sexual fantasies could soon be up for public consumption.The group responsible for the hacking, the so-called ‘ImpactTeam’, have pitched this as a moral battle with them in the role of hero and Ashley Madison as the villains. The next few weeks will be fascinating to watch as the moral battle ebbs and flows.

Following the boost in brand awareness, the next test will be whether the consumer proposition is powerful enough to overcome brand distrust

As the morality play progresses, there is also a marketing war going on and it is being fought over three main fields of battle: brand awareness, consumer proposition and trust.

Every cheating cloud

The hack has done amazing things for the Ashley Madison brand. Previously a slightly illicit brand, now millions more people have heard of it and even better understand its offer.

If the hacked data is exposed to all there will also be millions of current users, lapsed users and suspicious spouses desperate to find out whether they or their partner has been exposed as a cheater. The publicity means Ashley Madison the brand gets an awareness boost and first interaction for “free”.

Following the boost in brand awareness, the next test will be whether the consumer proposition is powerful enough to overcome brand distrust.

What’s clear, whether you approve or not, is a platform which makes cheating more accessible is an attractive consumer proposition for some. But can it overcome the fact that any right-minded individual will now distrust the brand to keep their secrets?

Acceptable risk

In our world now of ubiquitous Tweeting, Facebooking and data in the cloud, I reckon for many the hack won’t make a jot of difference. They will continue to sign up in their millions and take their chances.

Once the acute coverage has died down, consumer irrationality will take over and they will conclude that Ashley Madison must have learnt its lesson and now be more secure and less hack prone. For lots of people, the power of the proposition will trump any brand distrust.

Of course, there is also the possibility that this could tank the brand

Of course, there is also the possibility that this could tank the brand. So I bet in the back rooms of Avid Media, the owners of Ashley Madison, they are already hatching a plan to rebrand and use the power of increased awareness of the proposition to launch afresh. Surely this contingency planning would only be sensible?

Criminal conscience

And finally what of the hackers? If you believe in their moral cause, then you should hope that they are pausing and thinking again about breaching the privacy of millions of not-so-innocent consumers. They may have the data but they don’t need to expose it.

You might hope if you want to see the end of a platform for cheating that they should be planning a denial of service attack to stop the Ashley Madison service from actually working.

This would be a much better way to achieve their aims but I suspect that really they don’t give a crap and just want to prove, yet again, that almost no IT system is hack-proof even those with the most salacious of personal information on them.

Whatever side you take, moral or marketing, and I hope you’ll share them here, there is no doubt that how you handle the worst of disaster situations, both looking for threat and opportunity, is in our hyper-connected world a must-do rather than a should-do activity for all marketers.

Rebranding lessons of hibu /

Over the last couple of weeks has been rebranding as hibu. This is the latest example, in a very undistinguished line, of such rebranding failures.

When the best a CEO can muster about his companies' latest rebranding is this quote below you know the company is in deep, deep trouble. 

'don't read anything into it….It doesn't have any pure meaning behind it. It needed to be short, easy to pronounce and to sound edgy and innovative. It doesn't mean a lot by itself, but if you turn the clock back, neither did Apple and Google or Yahoo!' 

Mike Pocock is the CEO of hibu which in the latest example of rebranding has became the new name for has been through at least a couple of major rebrands as it struggles to make any sense of it's Yellow Pages listing business model in the internet age. They recently acquired as a way of trying to help SMEs and their internet presence. hibu or as the company might have us write: hibü is the latest work from Landor – that purveyor of snake oil to companies with more shareholder money than sense. I am sure that the Landor team are seething as they read the quotes from the CEO on their beautiful retina displays. 

The rebranding of hibu illustrates some of the key mistakes that are made far too often as a company makes the decision to rebrand and change name: 

1. The new name doesn't mean anything to anyone:

This is most likely to have been dressed up as a benefit by the inventors of the brand hibu. It isn't. Given the companies massive financial issues they are not going to be able to afford a huge marketing budget to vest this meaningless word with brand associations. They may think that it is a positive move dropping all references and equity built up in or indeed Yellow Pages but to eschew these assets is foolhardy. The fact that they have gone for the immediate rebrand, rather than a phased approach, again make the journey to establishing the new brand very hard. The rebrand has very little logic – this taken from the hibu website exemplifies the problem: 

To meet the ever changing needs of our merchants and our consumers, we are transforming our business to be more digitally led. We are making it possible for our consumers to connect with our merchants how they want, whenever they want. We are developing innovative new products and a dynamic new brand signals that we are a digital business of the future. When people connect, communities thrive, and we are a vital connection in an ever changing world. That's why we have changed from Yell to hibu.

Now I may be missing something but this paragraph makes no sense as a logic for the rebranding. There is no reason why the move of the business into digital has delivered the name hibu, argubly is a more digitally led name. 

2. A brand optimised for the internet age and search?

I bet this was a big part of the pitch for rebranding. I'm sure Landor will have rolled out a 28 year old 'internet and search expert' to bamboozle the board with promises about how this name because of it's construction and newness was going to deliver exceptional power in ranking on Google. This is of course generally an absolute load of old tosh but is so common to hear now – it's the reason for the rash of names with a double "o" in them for example. There was an idea floating around that Google somehow favoured certain combination of letters because they were less competitive to rank on hence Ooyala and the like. The secret to ranking on Google is to deliver high quality content and make your pages search friendly – if anything non descriptive names make it harder to rank not easier. 

3. Lack of engagement from the top down?

From the comments from top management in the press they don't seem that committed to the rebranding and this makes me suspect that the organisation hasn't been engaged in the hibu rebranding process. This is the most common mistake that is made when trying to change a culture, a name, or a business model. It's the people within the organisation that should feel vested in the new name and making it's promises come alive. However most engagement processes start with the brand book or internal roll out campaign once all the decisions have been made. Rebranding and brand renaming needs to come from within and this requires engagement in the process from the very beginning. 

4. A brand name just trying too hard… 

Like Consignia or Monday, hibu is a name that is just trying too hard. I know that's a very difficult thing to substantiate but there is something in these names that come from a process that is vested in focusgrouping and whiteboarding – they lack authenticity. They are artificial creations rather than really coming from a place of organisational difference. Apple as a brand name works for that organisation (or it used to) because it encapsulates the "think different" logic that was Steve Jobs' brilliance. Google works because it somehow embodies the geekiness of that organisation based on algorithms, advanced maths and technology. hibu is just trying to be cool and doesn't embody any of the attributes of that organisation.

Given their latest results are flatlining I think rebranding is very unlikely to be the knight in shining armour coming along to rescue and somehow give meaning to the company. was a smart way of attempting to link the past with the future – it had a logic and could have had a personality. hibu doesn't mean anything to anyone and because of this it is facing an uphill struggle. 

What do you think of this rebranding and renaming? Do you like the name hibu? Leave a comment below and get involved. 



What is marketing exactly? This most basic of questions was fired at me by one of my blog readers the other day who posed the question in the context the massive changes wrought by digital marketing, branding, dissatisfaction with marketing teams and directors – so what is marketing today? 

The guru of marketing Dr. Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”

This is a fine definition of marketing. For more definitions check this out.

But despite this there is no doubt that answering the question "what is marketing?" is more confusing today than ever before. Suddenly marketers can be responsible for a diverse set of functions from core marketing, sales, social media, brand, customer experience, advertising, proposition and product management. But what is at our core and still relevant today as we define marketing and it's role?

From Marketing Management to Guerrilla Marketing to All Marketers are Liars whatever text you read there is always commonality in answering the question of what is marketing for me I boil it down to: 

What is marketing? Great marketing makes the connection between something somebody wants / needs and a product or service – and it does this profitably. 

what is marketing

Let's break this answer to the "what is marketing' question a little further: 

The Need or Want:

marketing owns uniquely the understanding of customer needs and desires

The Product or the Service:

marketing should contribute significantly to the development of the product and the offer to the customer that will tap into the need or desire

Make the connection between need/want and the product/service:

marketing by owning the communication of the product or service owns uniquely the process of mentally joining the dots for the consumer from want or need to the particular product or service


marketing needs to complete the identification, development and connection process so that a profit is left at the end – getting the numbers right is the key deliverable.

What is marketing? Identifying great examples of marketing practise

There are many, many examples of marketing that fulfills some of these criteria but there aren't many examples of marketing that does all four. When you manage it though marketing and business magic can be created – the iPhone is an exquisite example of clear consumer need, a fantastic product, great connections through amazing pitching and advertising of the product all coming together to deliver huge profitability. Keeping with technology, on the other hand, I am unconvinced by Windows 8 or the Surface Tablet.  Whilst targeting an established need these products don't deliver unique value compellingly enough, the communications creating connections in peoples' minds are confused. I doubt either will be profitable in the medium to long term.

What is marketing? Analysis of technology examples. 

What is marketing examples iPhone surface tablet acer netbook windows 8

So how do you create great marketing?

Marketing shouldn't be more complex than educated commonsense: to really understand your customer by listening and learning intently, then think and dream deeply about what they need now and in the future, work with colleagues from across the business to create a wonderful product and service that you can be really proud of, would recommend without fear, and can be delivered profitably, then finally go have some fun telling the story of how you went from consumer need to brilliant delivery. Monitor and analyse everything so that you can ensure that the system of capturing value from a consumer need is profitable for your business. 

So in answering the question "What is marketing?" can we also split out the difference between marketing and sales? Yes I think so: sales is only concerned with the process of shifting as many units of a product or service as possible profitably – a vital process. But marketing helps a company move from ideation through to customer satisfaction profitably. Of course the best sales leaders will understand and influence the entire value creation process but they aren't responsible for it if there is a good marketing team delivering. 

Over the coming weeks I'm going to be delving into more aspects of "What is Marketing?" so please sign up to this blog. And as ever if you have ideas, thoughts and comments please share.

What is your view on the question "what is marketing"?


Other resources for you to read about What is marketing?: 

What is this thing called content? from this blog

A couple of good videos on What is marketing from The Chartered Institute of Marketing

If you are interested in enhancing your marketing career then check out my new training online course – currently 50% off: How to Become a Marketing Director

Best Books for Christmas

Books for Christmas?

Well it's the 1st December so time to offer some help in the run up to Christmas! If you are looking for some Christmas Book inspiration for friends, family, colleagues or your team what better than to give a top business or marketing book to give them something to think about when they aren't passing the port or munching on a mince pie. These are the best books that I've read recently and I've sorted them into four sections: digital and internet, brand & marketing, economics & business, personal & entrepreneurship. Each one would make a great book for Christmas either because they are beautiful or packed full of fascinating and useful ideas.

Digital & Internet Books for Christmas

The Revolution will be Digitised by Heather Brooke

This book is sub-headed: "Dispatches from the information war." And opens with a powerful quote from Thomas Jefferson about the value of ideas spreading being like the air in which we breathe. 

What is so compelling about this book is that it is a series of vignettes from Iraq to Washington to Berlin all about how information and ideas are changing our beliefs and understanding of the world both for good and ill. 

The premise for the book is that we are in an extraordinary age – akin to a new enlightenment where information and knowledge flows freely. However there is also huge negative forces at work – the gulf in information equality, the power of the state and big business, and how our privacy is under threat and no longer valued.  

This is a well written, punchy, easy to read and engaging dip into the war for information that is surrounding us. 


The Filter Bubble by Eli Pariser

I've done a video review of this book in a previous post

Information is Beautiful by David McCandless

What with infographics everywhere around us today and the Guardian-style of information communication becoming more and more prevalent this coffee-table book presents a set of fantastic examples of how to bring information and data alive through graphics. 

All of us may have been taught at school with ruler, pencil and graph paper how to draw a table, or chart, and may have even got quite good at graphs in Powerpoint but if you really want to see how information can be beautifully rendered and represented then this book is a must have. 

Information is Beautiful would make a wonderful Christmas Book for the right person interested in data and analysis not just in business but across the spectrum. 


Marketing & Brand Books for Christmas

Brandwashed by Martin Lindstrom

Brandwashed has got a mixed press but I enjoyed it. Like many books of its like it tries to make a huge amount of fuss over what is pretty standard marketing and brand practise. 

We all know that marketing surrounds us all and uses psychology to try and trick us into letting our buying barriers down. Martin Lindstrom's examples are good and the book is easy to read. 

You don't need to be in marketing to enjoy this book just a consumer, victim to some of the £16bn spent on trying to BrandWash us in the UK every year. 


Priceless: the hidden psychology of value by William Poundstone

No-one knows the price of anything anymore. Everything is deep discounted or on offer from GroupOn! With DFS shouting about 75% of that sofa how do we actually know what the actual thing costs. 

Pricing is a very modern game from "free" models on the internet to the psychology of the sale this book explores how we think about value and what we use to assess it. This book is packed with examples and experiments into price that expose why we react, for example to £9.99 vs £10 and why. 

A well researched and yet still entertaining book for any business or marketing person. 


LogoDesignLove by David Airey

As Christmas Books go for brand and marketing folks this is a winner. Again it is of the coffee table variety but is a beautifully produced object in it's own right. The graphics, typography and illustrations are wonderful. 

This book goes through all the elements of what makes up an iconic logo from Kellogs to Nokia to Google breaking them down into elements, process and the representation of a product that connects with consumers. 

This would make an amazing Christmas Book for someone with a brand design bent. 


Business & Economics Books for Christmas  

The Economics Book by Dorling Kindersley

Don't let the Dorling Kindersley tag put you off and make you think this is a noddy economics book. Whilst it might not satisfy Adam Smith or John Maynard Keynes, for the rest of us it would make a great Christmas book. 

It is beautifully laid out and designed and gives a very satisfying dip-in, dip-out approach to economic history from the earliest forms of economic exchange to one page summaries on the key economic thinkers over time.

A wonderful looking book this would be a great book to give this Christmas. 


The Spirit Level by Richard Wilkinson and Kate Pickett

Perhaps a little heavy for Christmas but what better time to think about equality, or rather inequality, than at a time of traditional opulence. Reading this book will make that yearly viewing of Scrooge even more filled with meaning. 

I found this book full of optimism and hope suggesting a powerful diagnosis of why inequality is such a cancer in society and what we, and businesses especially can do to tackle it. Packed full of anecdote and examples Spirit Level is a well written and easy to understand book about an important subject. I also read Will Hutton's Them and Us about similar themes but this book is much lighter and digestible.  


Personal & Entrepreneurship Books for Christmas 

The Lean Start Up by Eric Ries

A modern classic and absolutely required reading if you are going to be the next Mark Zuckerberg! This book is packed full of practical and pragmatic advice, which is largely well founded and even when it isn't still makes you think about the way you are approaching building and scaling your business. 

The book is well structured and methodological without being too boring which many in this genre of books are. 

A great Christmas book for any budding or mid way through business and brand builders out there. 


Business Model Generation by Alexander Osterwalder and Yves Pigneur

I absolutely loved this book and it would be a great Christmas book for any budding entrepreneurs. The book presents a 9 block approach to creating a business model from the value proposition to the value chain. It is easy to engage with and written in a very accessible way. 

The rather bland and academic title is perhaps slightly off putting because the book itself is an absolute joy and uses pencil illustrations and clever visual metaphors to deliver a very visually stimulating experience. 


And of course if you are still looking for a great book for any business leader or marketer then please consider my book: Why Should Anyone Buy From YOU? which is packed full of great research, frameworks, case studies and interviews about trust and how businesses and brands can build it with their customers. It's now available on Kindle as well. 


I hope December is a great month for you – and that your shopping is now a little easier!


The Big Trust Debate – “This house thinks that restoring trust between consumers and financial services providers is a lost cause.”

Financial Services Forum Members Conference: 25th March 2009

This speech sent me on a journey to ultimately writing my book about brands, business, trust and social capital. 

Why Should Anyone Buy From You? Trust in business and brands


The Big Trust Debate: Opposing the motion

"This house thinks that restoring trust between consumers and financial services providers is a lost cause.”

Thank you to the team at The Financial Services Forum for organising this debate, and for the privilege of opposing this motion. I’d also like to thank Ian for his spirited, if misguided, defence.


So trust – what exactly is it? Do you trust me to make this speech? Do I trust you to look after my money or investments? As an industry what is our reputation, as trustworthy, reliable bankers or evil, scheming, wankers?
I believe resolutely that we must reject the motion that “restoring trust between consumers and financial services providers is a lost cause.”
I’d like to explain why I believe this motion is flawed from two perspectives: the conceptual – that trust is so important to our economy that we cannot let it go; and from a very practical perspective that there is much we can do to improve trust in our industry and so it is far from being a lost cause.
Defining trust is a complex issue. It is hard to measure. I don’t agree with defaulting to the overly simplistic, dictionary definition that Ian used in his opening remarks. Adam Smith knew that trust was a key economic currency; it wasn’t luck that The Theory of Moral Sentiments, in which trust is writ large, enabled the Wealth of Nations
There are many models of trust: some behavioural, some transactional, some genetic. But what I believe is that we need a practical and pragmatic view of trust that we can apply to our industry and businesses – a model that can help us drive positive solution- oriented action at the tactical and strategic level.
I’d like to define three words today: Trust, Trustworthiness and Reputation.
Firstly Trust.Trust depends on the existence of risk – if something was certain there would be no need to trust. Trust depends on interdependence between actors – if there is no dependence there is no need to trust.
Therefore I would like to define trust as a relationship.
I trust someone in relation to a specific action or situation. For example, I may trust Ian to conceive a terrific advertising campaign for me, but if my heart fails I do not trust him to perform heart surgery on me.
Secondly, Trustworthiness which I will define as: The intrinsic absolute value of how someone will act in given specific action or situation.
Each of us have different absolute levels of trustworthiness intrinsic to our being and the situation we find ourselves in. Finding a £20 note on a bus, for example, some of us might pocket the money, others might hand it in. Therefore as trustworthiness as an absolute, intrinsic quality, it is separate from the perception for trustworthiness which is an aspect of reputation.
I am sure we all remember the recent problems that the House of Lords has undergone with certain members being accused of taking inducements. Previously, the Lords has a reputation for trustworhiness that has been shaken. But importantly their intrinsic trustworthiness, be it high or low, has not changed, we have just readjusted our perceptions in the light of new information.
These three concepts inter-relate to guide the decisions that we make as people to place our trust within others.


So keeping these definitions in mind let’s take a step back and look at the role of trust in our economy, business and brands.
Adam Smith believed that certain virtues, such as trust and a concern for fairness, were vital for the functioning of a market economy. The very basis for enlightened self-interest, through division of labour and the specialisation, and ultimately the professionalisation of tasks, is built upon our ability as human beings to trust and be trusted.
Before the rise of the free-market we would have grown the grain, then ground the grain and then baked the bread for ourselves relying on our own ingenuity and skills. But now we trust in the farmer, the miller, the baker, and with industrialisation, across national and global markets, we trust evermore in concepts, often called brands, because these professionals are strangers to us. What allows this system to work is our ability to trust not blindly but intelligently not just in those performers but also the system that monitors their trustworthiness, and ultimately allows them to build a reputation for good or ill.
This trust is good. It facilitates free-trade, lowers transaction costs, and creates employment. It feels good – inspiring loyalty and building morale. It is built most powerfully through personal interaction and familiarity. And is it fragile and asymmetrical taking a long time to build but can be broken by one quick act.
Professor Christine Ennew, from the University of Nottingham has shown through the work of the Financial Services research forum, that trust is alive and well in the way customers think. And given our economic model this is surely unsurprising. In the Trust Index survey many institutions were well trusted with a mean score of 72%. Banks and other financial services providers were amongst the most trusted institutions, scoring more highly than the NHS who scored 55% and the BBC who scored 58%.



Now to us working in the industry this might seen counter-intuitive but should it be? Well, I think most of our customers trust us to do the basic, commodity functions of our businesses well. The ATMs work, statements mostly arrive on time, salaries get paid in, bills get paid, savings are safe; when you crash your car the insurance nearly always pays up; when you get a small piece of plastic out of your wallet to pay it almost always works perfectly.

Unfortunately however given the recent issues in the global financial market cracks have appeared at even these most basic levels of trust. Witness the run on Northern Rock and those customers queuing didn’t even have this very basic level of trust. In the actions that the government took with Northern Rock and more recently, RBS and Lloyds TSB, trust in the system has had to replace trust in our individual businesses.
However even if you believe that we are still trusted at some basic level this feels inadequate. These feelings, I believe, come from our need to be respected, perhaps, a craving for deference long past, we want our customers to see us as trustworthy.
But the average UK consumer, doesn’t think we are trustworthy. For many, if not most consumers, financial services providers are seen as a “necessary evil”. How many times have we heard in focus groups – “better not to move because better the devil you know.” The average consumer thinks that if the average banker can have one over on him, he will.
Is our poor reputation for trustworthiness deserved? Is Fred the Shred the exception, and actually our industry is just a story of hard- working, decent, ordinary folk?
At a surface level, especially for those of us that are marketers or responsible for communications, we have a lot to answer for. We spend much of our advertising budgets either pillorying each other or trivialising. My recent campaigns at Capital One have been about parodying the uncaring “bank manager”; Nationwide’s advertising has more famously featured the stupid and dishonest bank manager leading the consumer to the conclusion that trusting a bank would be madness. We see the flim-flam of a Barclaycard Waterslide or Halifax pushing a shallow inducement to switch bank accounts for no other reason than a £5 a month cashback.
But are the issues that undermine trust more than surface communications? We need to ask the toughest question: is our poor reputation for trustworthiness actually a reflection of the truth. The consumer sees:
Personal pensions mis-selling, endowment mortgages that don’t cover original principles, Equitable life, PPI fines, split capital investments,
125% mortgages, call centres moving off shore, exposes on pressure selling in bank branches, Sir Fred Goodwin taking his pension, Lloyds TSB paying out bonuses. The list goes on and on.
Bad practise cannot hide, and will be magnified by an unbalanced media. Transparency and access are the largest consequences of our information rich age. The internet and modern communications has delivered a level of transparency, speed of information flow, and access never before encountered by our businesses. Our customers have many more ways to interact with us, find out about what we are doing and share this information. We have taken the cost-savings, that
the information age has offered: internet and telephone banking, has replaced the bank manager, application forms for credit signed in front of representative of the lending institution have been replaced by “one minute response” internet advertisements and web forms. All of this has depersonalised banking and broken many of the human relationships between our businesses and our customers.
The frightening, or is it liberating, thought is that maybe the much discussed “collapse of trust” in our society, is actually a re-calibration to a more accurate view. If our politicians, our churches, or ourselves aren’t worthy of trust then why should we expect it to receive it. The age of blind faith has been destroyed by the information age.
Sadly however the result of this transparency, information flow, together with an unbalanced media, often leave the consumer in the worst of all possible worlds, confused, unhappy and dissatisfied but still dependent.


In order to restore trust we need to re-examine the way that we run our businesses. The complex basis upon which we have generated profits, built on capital markets and financial engineering, will I suspect be less favoured going forward. What I hope can replace it is a return to the fundamentals. Understand your customers needs and wants, build a business model that makes you money when the customer uses the product to fulfil that need, communicate in a compelling way and deliver on what you say you will deliver. This is the basic formula for trust in any market. If we do it the consumer will trust us more.
We need to look as an industry at a commonsense regulatory framework which is easier for the consumer to understand. For example going back to a separation between consumer finance and investment banking would make sense to the consumer in a world where they don’t want bankers “gambling with my money”. This will help restore trust.
I hope that we can work with our regulatory bodies, our customers, perhaps even the media, to forge a new concept of communication that leverages and manages the information rich age we now live in. We should put the consumer back into a relationship where they feel more comfortable and happier with the products and services they use, understanding of both their opportunities and limitations, empowering them to make good decisions for themselves in an open and transparent market. Whatever you think of Martin Lewis and his, he has proved that with compelling content targeted at a key need – saving money -engagement in understanding financial products can move into the mainstream, according to his website his weekly email covers nearly 1.5m people.
I think we also are seeing more positive changes that will help to rebuild trust. For example the trend in call centres moving offshore has become more balanced with many more of us choosing to repatriate or invest in new UK facilities such as Abbey, Esure and HSBC.
Or changes in the way that we communicate, there are many more attempts, irrespective of whether you think they are good or bad, to present positive benefits, such as the recent Natwest Employee based campaign or the Co-operative talking overtly about their values.
Some have said that actually we should ensure that financial services providers are not trusted so that it will keep us on our toes. But actually I think this drives a negative “gaming” approach to making a profit where the consumer feels like they need to game the system and we are forced to create business models where loyal customers pay for those that game. This is well exemplified by the Balance transfer market where customers who stick around effectively have to pay in higher interest rates to pay for those that switch constantly.
The trust rejectors say reduce everything down to price, then leverage the comparison tables on, for example, Moneysupermarket. Here lies the path to fully commoditised financial services with little or no ability for us to generate a fair return for servicing customers well and
earning their trust and loyalty.
An alternative might be to work together as an industry together with government and the FSA to build an approach that can step change the level of customer empowerment. Moving to a more open and transparent dialogue; investing as an industry to support an educated, empowered consumer. Starting to build back in a face-to-face relationship with our customers that allows trust in us as individuals within an enterprise, rather than just the faceless brand.
And for those brands that succeed in restoring trust, perhaps winning some respect and a reputation for trustworthiness, a more open and transparent market will deliver increased preference and ultimately greater demand.
Attempting to address these big issues as an industry in concert with others will help to restore trust and clearly indicate that it is not a lost cause but rather a source of profitability for the coming years and decades.
So in conclusion I believe that I have outlined to you why I believe that restoring trust is fundamental to the strength of our industry; and given concerted and co-ordinated action, whilst not denying that it will be difficult, it is certainly not a lost cause. Therefore I would strongly urge you to reject the motion before us here today.
Thank you

Closing speech: 5 minutes (3 minutes written, 2 min for specific rebuttals)

I am struck as I have listened to today’s proceedings by the genuine sense that we are at a turning point in the development of our economy and our industry. It is undeniable that trust is an important source of support to our free-market economy. When trust goes out of the window, as has happened over the past couple of years, the system comes under threat of collapse.
However we must recognise that today we live in a flatter society. The age of deference has gone. Whether we like it or not, transparency and the view of the man on the street is more important than ever. We are seeing a democratisation of everything from information, to tools, to access; and this includes financial services.
And so in the confusing and changing world how do we respond? In my opening speech I hoped to give you a sense of some of the, perhaps difficult, but commonsense, moves that we could make to restore trust and therefore conclude it is not a lost cause.
But over and above these steps I think we need to reframe the challenge from the fatalistic and somewhat lazy – “is restoring trust a lost cause?” into one that puts restoring trust as an imperative to a new conception of the role of financial services providers in our society.
Through the crisis we are currently experiencing we have an opportunity to recast the financial services industry as a creator of social good, not just through tax contributions, and profit to pension funds, but directly through our innovation.
The issues facing us today as a globalised society are bewildering: climate change, peak oil, water crisis, natural resource depletion, all underwritten by uneven wealth distribution, poverty, crime, conflict, increasing urbanisation. These issues are moving more quickly and in a more interrelated way than ever before – it is often frightening.
We have the opportunity to move away from an age of naked consumerism to something more balanced and sustainable perhaps putting individual happiness first.
Imagine a world where a conversation in the bank, with a bank manager, could actually assess whether a credit card to fund that new purchase, or a stretching mortgage to buy that bigger house, were actually discussed in a holistic context putting individual happiness at the heart of the discussion.
On the strategic level how do we use the unbelievable talent of our financial innovators to contribute to the solution of world problems whilst also turning a profit. The European Carbon Emissions Trading Scheme and the futures markets for protection of Amazon land, are all examples of financial markets contributing solutions.
Old and new models that are more sustainable and built on trust are being actively explored. Alastair Darling has signalled in favour of mutual societies and credit unions. Grameen Bank, banking for the poor, has built a healthy business in Bangladesh, built on trust, accountability and creativity.  Zopa, the internet marketplace for loans from individual to individual, has created a growing business built on a new model, bypassing the banks, which sees lower charge offs for a given risk because of the accountability and trust they have built in their system.
And whilst this broader call to arms might seem ambitious and demand too much change, we have no choice but to change, for the model we have run over the past 25 years has delivered crisis and collapse. The choice is what to change into.
After all is said and done what our customers will trust are organisations that have values communicated through their actions, run by accessible and open people, businesses that value their loyalty, and seek to create profit by creating products which meet their needs transparently. They will trust brands that communicate openly and positively about the many benefits we provide. They will move from basic levels of trust when our businesses start to play for higher goals.
Far from being a lost cause, we have the exciting opportunity to respond to this crisis by putting trust at the heart of our actions in the coming years, both tactical and strategic, balancing both the practical and the pragmatic with new concepts.
The first step in what will be a long journey is voting against this motion before us here today.
Thank you.