2 min Video book review: Cradle to Cradle

Last week I read a fantastic book called Cradle to Cradle about eco-effective product design. Really easy to read and really mind expanding. Definitely a read for all those involved in designing and delivering products.

Here is a link to it on Amazon (its an affiliate link so you know!) and my two minute video review.

I am thinking of doing a series of these video book reviews. Please give me feedback on whether you think they work and what I should include.

Here is also a TED talk by William Mcdonough on the key concepts.

What do you think? Leave a comment below and share these important concepts.

Thanks

Justin

Mail me: justin@basini.com
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ENGAGING WITH THE WEB 2.0 CONSUMER

Yesterday I took part in the Institute of Economic Affairs Future of Consumer Finance Conference.

I gave a presentation in the afternoon about engaging with the Web 2.0 Consumer.

Here is the presentation.

If you have any views or thoughts please comment below and share the presentation if you think its useful.

Thanks

Justin

Mail me: justin@basini.com
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….and stretch: How far will O2 be able to stretch it’s brand?

Last week Ronan Dunne the thrusting CEO of O2 UK proclaimed a bold vision to create a lifestyle superbrand selling financial products, health and education as well as just plain old mobile phones.
I love a good vision, even more than the next man, but it’s always an idea to keep one’s weather eye alert when a CEO makes these sort of proclamations.
Stretching a brand convincingly and with commercial success is a real challenge. Many attempt it but few succeed. Those that pull it off usually have a powerful structural source of competitive advantage that they can use to ensure that the stretching delivers value to the customer. Rarely is this competitive advantage the brand.
Tesco have a retail distribution network that ensures that customers get a significant convenience benefit from the co-location of goods and services. Add their now legendary scale and they can provide aggressive pricing. The Tesco brand helps because it promises the customer these benefits but, to be clear, it isn’t the reason why the customer buys from them. 
Apple have created technology platforms that have allowed them to develop lucrative content delivery businesses in addition to the hardware sales. These revenue streams are based on providing access, integration and ease of use benefits to their customers. Their brand surely helps but for most of us the reason we use iTunes is because it’s easy rather than Apple.
Virgin is somewhat the exception that proves the rule. The Virgin brand has stretched across multiple products and services with the brand promise of something different, younger and more entertaining. Oh and Richard Branson to carry it through. These benefits create stretches that work for them in the service space where the customer gets a better experience: Virgin Atlantic, VirginMedia, to a certain extent VirginMobile, and even (when they work) VirginTrains. Many of Virgin’s stretches haven’t worked; VirginVie, VirginBride, VirginWine, VirginBooks are much less convincing.
Stretching too far has even taken the scalps of some of the best management companies in the world. Anyone remember Saatchi’s red balls falling onto shopping baskets that heralded Procter & Gamble’s stretch of Olay into Cosmetics? That lasted only a few years and made no money.
So where does that leave the Mr. Dunne’s superbrand vision? Well I think O2 are still searching for their stretchable competitive advantage. The best they’ve come up with so far is “the mobile phone is the remote control for your life”. What this means is a bit of a mystery to me apart from a dangerous throw back to one of the worst movies of 2006 – Adam Sandler’s Click (no -don’t see it).
Maybe they mean that the mobile phone is a portal to other aspects of your life. Well that maybe true but that doesn’t provide a compelling reason to buy home insurance from my mobile phone provider.
Given it’s sounding all a bit unconvincing so far Mr. Dunne then tries to persuade us that O2 is (or will be) a trusted brand; that in a world of low-trust brands this will have us flocking to buy health and education from O2. This is dangerous territory – a word to the wise – anyone, CEO or not, who tells you “trust me it will be alright” is almost always, car-salesman-like, clutching at straws. Trust is built within a specific context of delivery and doesn’t easily transfer to other non-similar product categories.
However on the plus side the move to introduce member rewards such as free concert tickets at the O2 arena starts the notion of O2 being a “members club” which enables the stretching idea. The significant £5m investment O2 is making into social innovation in local communities through the “Think Big” campaign is also laudable and has the potential to add another dimension to the brand.
But are these advantages enough? I doubt it unless O2 can go back to the basics and clarify for their customers what real, tangible benefit O2 can consistently deliver as it moves from phones to finance to education.
Do you want O2 to stretch its brand? What risks and opportunities do you think they should take?

What do you think? Please comment below. 

Justin

Mail me: justin@basini.com
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GO ON TRUST ME…..

Many of my real world friends who read this blog might be bored by me banging on about trust – so I apologise off the bat for this post. But quite few of my readers dropped me a line following my recent trust post about BT so I thought I’d share a few more insights from my research into the historical, economic, psychological and sociological research into why trust is important to human beings and their societies. I hope to create a dedicated site to this research soon. So if you have questions or thoughts on how businesses can build trust then please leave a comment or get in touch with me.

I’d like to share three further insights into what businesses (and their brands) have forgotten about how trust works.


1. Trust is only built through dialogue. And the thing with dialogue is that is it two way. Most brands have forgotten that in order to have conversation you need to have a point of view, be interesting and have continuity. Make an (easy) imaginary leap that I am boring and suffer short term memory loss (but you don’t know that). Our first conversation won’t be good and the second, as I deny all knowledge of knowing you, has the potential to be positively damaging . Yet call the typical contact centre and you will be subjected to minutes of disclaimers telling you what can’t be discussed and then they have no knowledge of the 10 calls you’ve made before. Zip on the trust front.

2. We trust more in people than anything else. Everything else is an abstraction. Whatever the brand models and marketing literature say trust is fundamentally a human thing. Yes, it is possible to trust in brands, businesses, governments, organisations etc but the quickest and easiest way to build this is to get people to do the talking and the doing. The recent Toyota recovery press advertising covered this well. Whilst they might have handled the whole crisis poorly but this advertising with its premise of “we are thousands of people working as hard as we can to recover the situation” was fundamentally human and powerful.

3. To be trusted, you need to trust. Every brand I’ve worked with wants people to trust them – that’s the point of brands right? Yet most businesses and their processes don’t trust the customer. Businesses too readily default to a position of policies that cater to the downside risk of fraud and loss rather than trust their average customer. You’ve banked with a high street bank for 40 years with a perfect record but retired last year. Try asking for an unsecured loan – 40 years counts for nothing – policy says “we don’t trust you”.

If you want to build or rebuild trust you could do worse than allow your humans to be human.

Got a view – comment below and please share using the social bookmarks below (just click on them!)

As ever thanks for reading…..

Justin

Mail me: justin@basini.com
My website: http://www.basini.com/
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Financial Services brands: it’s not about being different but making a difference

New blog following a debate at the Financial Services Forum this morning.

Justin Basini

Thinking about marketing, branding and advertising.
Open for chatting, collaborating and consulting.

justin@basini.com

+44 (0)7786548395

Visit my website at: http://www.basini.com

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JUST HOW SPECIAL AND DIFFERENT ARE FINANCIAL SERVICES BRANDS?

This morning I took part in a lively debate organised by the Financial Services Forum and their newly formed Brand Strategy group chaired by the inestimable Lucian Camp.

I shared the floor with Tim Pile who is CEO of Cogent Elliott and has a long and distinguished career in marketing including being CEO of Sainsburys Bank and the insightful Mike Hoban who is now running marketing for DirectGov and has had successful stints at Scottish Widows and Barclaycard.

We were each asked by Lucian to describe the essence of brand building in either Packaged goods (Tim took this on), Services (excluding financial services – Mike took this one) and Financial Services (this was mine).

My key point was that I believe many of the principles of brand building are common irrespective of category because essentially we are dealing with human psychology but that the context of these principles within financial services does make it "special and different".

Three context differences in financial services:

1. Financial services companies are hard wired around product and P&L analysis rather than brand and customer.

This means that the power within financial services companies almost always resides within commercial product owners rather than marketing. These leaders are trained in P&L, balance sheet risk, regulatory compliance, operational effectiveness not marketing, brand, experience and customer.

The very logic of brand building, positioning for strategic competitive advantage, customer segmentation, product development based on consumer need are all more difficult concepts in a financial services organisation. The result is an industry that in general creates me-too products which are overly complex, often game the consumer, provide a poor overall experience and are communicated in complex jargon.

2. Financial services are delivered through people. And people are much harder to manage than a shampoo formulation.

Certainly in most product categories especially the FMCG companies, brands are entities created to effectively penetrate the customer mind and form associations with product performance rather than being a set of associations about a group of people doing something. In most cases in FMCG companies the brand you are marketing is not the brand you work for. Given most financial services organisations have one or only a few brand the internal service and brand alignment challenge in these brands is core and material to their success. From the Indian call centre agent to the CEO in a financial organisation each needs to understand the brand and how it applies to their job.

3. Financial services products tend to be more risky and complex than many other types of products or services. They require much more effort from the consumer and the provider.

An irony of financial services businesses is that the organisation often believes they are the most commoditised of products. I used to be told all the time at Capital One – credit cards are a “low involvement” business. Consumers take a product and then want us to disappear into the background.

But having spent lots of time obsessing about how to make white gloop in a bottle exciting to consumers, I don’t think that financial services products are or should be low involvement – they have a massive impact on people’s lives and well being.

If they low involvement its probably because they are difficult and complex to communicate and understand. This combines with the terrible mess we are in from a regulatory perspective, defaulting to complete, unedited exposure of all information, to make it extremely difficult for the consumer to make an informed and empowered decision.

And finally (as Lucian called it the "Basini bombshell") I ended up questioning one of the core purposes of brand building:

4. Financial services brands – it's not about being different but about making a difference

The strategic goal of marketing in many businesses is to create a differentiated position in the market that gives you competitive advantage through cheaper cost of sales or price premium for example. Of the many principles that we could consider this is perhaps one of the most fundamental.

Actually I’m not sure this has been proven effective for the main stream brands in financial services. If we look at our banks for example. A highly consolidated and inert market with very little to split apart the businesses products, performance or promise.  Certainly not enough to encourage mass switching to occur except maybe in those more liquid and more easily gamed products like credit cards.

In highly competitive and easily switched categories there is definite advantage to creating new ideas that better match and deliver against the consumer’s myriad needs. But the difference in financial services given their complex, impactful and long term nature is that aim shouldn’t be to create the new, new thing to gain share at the expense of customer loyalty but to focus on superior product reliability and partnership as a route to extracting competitive advantage and value. This is how our organisations and products can make a difference.

As marketers, we may not be in the right job to get to the CEO spot, we might be wired a little differently from the mainstream in our organisations but given our products are difficult and risky, and are built through human relationships and service, we have myriad opportunities to build great brands which have lasting value for our organisations and customers.

Lucian's blog on the session can be read here. 
 

Here is my presentation as a slidecast:

 

Thanks for reading. As always please share and comment if you've got a view.

Justin

Mail me: justin@basini.com
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Brands: if you want trust give trust


Brands and businesses always want to be trusted. But rarely do they trust their customers to understand how business works. This is why most organisations mission or values statements don’t include simple direct statements of what businesses are there, in part, to do which is make money. Businesses and corporations assume that we distrust them and therefore act defensively. In some cases, often the high profile ones, covered by the media, this default position of distrust is right but the vast majority of businesses, those that many of us work for, and employ our friends and family members, are full of good people trying to deliver well for their customers and make a fair profit in return, and money for themselves.

But most businesses, especially the big ones, are pathologically scared of saying anything that isn’t on message. And those messages are devoid of reality because they just don’t trust normal people to understand that running businesses is not easy, a balancing act and they have to make a return on their efforts. The cancer in these organisations are the public relations and corporate affairs departments that are obsessed with controlling the message, saying as little as possible, and where success is staying hidden.

In my experience most people are fair and reasonable. We understand that businesses need to make money, but we want them to give us good services and not exploit us for super-profitability. But most corporations treat us like we are cynical, conspiracy theorists or anti-business. And this has created a culture, especially in Britain, France and Germany, where making a profit is seen as inherently exploitative and almost immoral.

Witness John Petter from BT this morning (12th Feb 2010) on BBC Breakfast. Since BBC doesn’t replay Breakfast (can someone upload the interview to YouTube? YES ITS HERE) I’ll give a sense of the Tweets that were going round that summarise his performance:

jhemusinsignia: BT spokesman on BBC Breakfast was v.poor: why are people lacking the necessary skills put forward? Train them or use someone else
charlie74: BBC Breakfast presenter grilling the BT rep on TV… loved it
Tommy_Hill: Anyone else think the BT guy was seriously floundering on BBCBreakfast? “I don’t know if we’ll make money on it”.. Bulls**t
zenemu: #BT chap who was just on the BBC was a bit of a worm. BT are changing free evening calls from 6pm to 7. Odious little man from awful company
RAIPR: Wtchng John Petter, BT directr justify 7pm off-peak move on BBC. Nervy, defensive, dncng feet, looking away from cam, stuttering #fail
imogenfarr: Anyone see the BBC Breakfast interview with the squirming BTspokesperson? Blimey, he’d never have coped if he was interrogated by Paxman.



There is no doubt that his performance this morning was very poor but I suspect rather than being a consequence of not enough media training, it was caused by too much media training. Having been through several versions of this torture myself these sessions are focused on Corporate Affairs/Public Relations/Media people drilling you. “Don’t say this, say that”, “don’t answer questions directly” and most importantly don’t tell the truth. Don’t lie, don’t tell the truth, better to not say anything at all.

This goes right to the heart of the way that businesses present themselves currently. There is no longer a recognition, a trust, that we understand how businesses work. Read the mission and values of BT (taken from their website this morning):


Our vision

Our vision is to be dedicated to helping customers thrive in a changing world. The world we live in and the way we communicate are changing, and we believe in progress, growth and possibility. We want to help all our customers make their lives and businesses better with products and services that are tailored to their needs and easy to use.
This means getting ever closer to customers, understanding their lifestyles and their businesses, and establishing long-term relationships with them.
We’re passionate about customers and are working to meet the needs they have today and innovating to meet the needs they will have tomorrow.

Our values

Our corporate identity defines the kind of company we are now and the one we need to be in the future.
Central to that identity is a commitment to create ways to help customers thrive in a changing world. To do this we must live our brand values:
  • Trustworthy – we do what we say we will
  • Helpful – we work as one team
  • Inspiring – we create new possibilities
  • Straightforward – we make things clear
  • Heart – we believe in what we do
We are committed to contributing positively to society and to a sustainable future. This is part of the heart of BT.”

I can guarantee that John Petter and his boss Gavin Patterson spend most of their time obsessing about how they can organise their business to make money, grow and be cost efficient, whilst giving a good service. That’s what they get rewarded for. And yet making a fair return, making money for themselves and their employees, is no where to be seen in the mission and values of BT. These vision, mission and values statements have become divorced from reality, and its not just BT that suffer this problem.

Every business person that goes through a media training torture session comes out scared to death of saying anything, and is certainly left with the impression that having an open conversation about working hard to deliver value whilst making money is completely “off message”.

That’s what you could hear this morning from Mr Petter. His message was “buy unlimited packages” and he automaton-like repeated this time and time again. Charlie Stayt asked for a commitment from him that the prices would always be better value now and in the future, something which was impossible to answer on the couch in a studio. But instead of calmly responding, as Mr Petter might in a normal conversation with you or me, that BT always wanted to be good value, but that these decisions needed to be properly planned his only reply was “buy unlimited packages”. He thereby demonstrated that he didn’t trust those listening to his interview to conclude that he was a reasonable man with a reasonable approach and, yep, these things generally needed to be thought about.

Even when Susannah Reid asked him directly why he didn’t just explain that giving customers free calls meant that they didn’t make enough money, he wasn’t brave or trusting enough, to agree and admit that giving a good service and making a fair profit was what they were trying to do. All he could say was “buy unlimited packages”.

I felt sorry for John Petter this morning, a classic victim of media training where the goal is to say nothing, and a corporate and cultural context where trusting people to understand that businesses are there to try and give good services that we all need, and make a fair profit in return, is unacceptable.

Unfortunately until brands and businesses start to wake up to the fact that trust is a two way relationship, they will never win our trust.

Did you see the interview this morning. What do you think?
Do you work for BT? How did you feel?
Have you been media trained? What is your experience?

Please comment below and share with others using the social media icons.

Thanks – have a lovely, non-business, non-brand, non-marketing weekend and Valentine’s day.

Justin

Mail me: justin@basini.com
My website: http://www.basini.com/
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MORALITY & BANKING

Yesterday I attended a talk at the RSA by John Lanchester who has recently written a book called Whoops! about the credit crunch.
The talk and subsequent questioning was mostly about the role of culture and regulation in banking; with the audience and speaker exploring how to develop a system that might be more sustainable.
I wrote a blog called Banking and the Common Good a while back which explored how the concept of common good could be placed as a central focus of a financial institution. Today’s blog picks up on some of these concepts.
The question is how we create a banking system that actually balances commercial objectives with social objectives that deliver benefit to the common good. I believe that a new language of responsibility needs to be imposed on the banks. Nearly all banks will tutor their leaders in Business Ethics; all banks have values statements that will include some version of “doing the right thing”.
But despite these words and intentions we still have a system that doesn’t in aggregate and from a macro-economic perspective deliver “the right thing” and act ethically in its impact. The frustration is that there are very few financial institutions that deliberately act in a clearly unethical way decision by decision, action by action, but in aggregate the effect is destructive.
The heart of the issue for me is one of what banks, especially investment banks, markets focused institutions and bank leadership more generally, value. And that is money, to this everything else is subservient. This is why banks are so successful, they have created extremely efficient systems for maximising profit to the exclusion of virtually all else. This creates inattentional blindness, which is the psychological phenomenon of being “blind” to anything apart from that which you are concentrating on, add hubris and you have a system that builds risk and is narrowly focused on one immediate outcome.
This valuing of one outcome only, with little assessment of second and third order effects and impacts, allows for a culture to become devoid of morals. And that moral bankruptcy turned into financial bankruptcy.
So what to do? Remembering that business ethics and values were taught and “on the wall” at our big financial institutions and offered no protection.
I would advocate a complete reversal of the incentive systems at our banks. We need an incentive system that puts most emphasis on demonstrating moral action and joined up thinking rather than seeking risk for greater return. This should be in an overtly, openly discussed moral framework. Leaders in these organisations need to become expert not just in maths and playing the markets, but seeing the impact of their business on different stakeholders and balancing this for commercial and social return.
Morality is at the very heart of our economic system. Adam Smith’s conception of markets was built on predictable outcomes between buyer and seller. The foundations of these predictable outcomes, in a time when regulation and rules of commerce were much less regimented and established than they are now, were moral action from individuals. I don’t think it is surprising that The Theory of Moral Sentiments, that Smith wrote 15 years prior to The Wealth of Nations and the majority of the books in The Wealth deal with how individuals living in society should conduct themselves. In order for the invisible hand, specialisation and the market dynamic to work as a value exchange there needs to be trust and in Smith’s conception this comes from morality.
This morality will need to be imposed. Major financial institutions have regressed back to the status quo, as John Lanchester said yesterday “the system is as risky as ever”. They will never voluntarily accept any balances to their earning power. So this will need to come from changed systems of regulation.
But this creates a paradox in that regulation, with its rule based approach, enables a moral vacuum by replacing human judgement with an attitude of “if we stay within the rules we are acting responsibly”. Ironically the FSA (the UK bank regulator) knew this. Over the past few years anyone working in a UK bank will be familiar with the pre-crash mantra of “principle based regulation”. No longer were we to work just within the “rules” but to their spirit. It didn’t work because it stayed at the surface, and people’s behaviour doesn’t change, in many cases the people need to change.
By changing what is valued in banks this will change who progresses within the organisations. This will be a key to unlock a new system. Let’s open up board positions on banks to a wider audience. What’s clear from the past two years is that having a career in banking behind you doesn’t give you any special insight or understanding so let’s have a more diverse group from environmentalists, to community leaders, to customers, having a real voice in the running of financial institutions.
It has been said that markets are amoral. That maybe true but they don’t work unless their participants act morally. Creating moral financial institutions working for commercial gain and the social common good is the challenge.

Please comment below and share using the social bookmark icons. Thanks as ever for reading.

Justin

Mail me: justin@basini.com
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THE FINANCIAL SERVICES CHALLENGE: MORALITY AND BANKING

After a really interesting RSA talk yesterday by John Lanchester author of the book about the credit crunch called Whoops! I’ve captured my thoughts in my latest blog post Morality and Banking.