Two pieces of news hit me when I logged on tonight. One is Richard Thomas saying that boards ought to take more responsibility for data rather than leaving it to the IT boys, and the other was some piece of nonsense about data misuse being on the increase. Good grief, talk about shutting the stable door after the horse has bolted.
Dear Richard, if you had been reading this blog you would have learned that board responsibility was the only way to solve the data security issue months ago. Put the CEO in the clink if there is a serious breach, or threaten too, and data security will improve a thousand fold. Fines won't cut it. Just look at Goldman Sachs planning to pay huge bonuses to partners, even after receiving a bailout from the US government worth billions. Money is tax deductable, six months in the chokey next to someone pining for his loved ones focuses the mind.
And for goodness sake, data has been abused forever, and will be, as long as the DMA and everyone else in any sort of permission of authority turns a blind eye to it. Many DMA members have been caught red-handed, and nothing happens. The club shuts its doors and the carpet is lifted just long enough to hide a little more dust.
Data is hard to 'own' and almost impossible to keep totally safe. Face up to those facts. and build regulations that admit as much and put in place reasonable safeguards. And if you find out someone is abusing data, eject them from the club. It is that simple.
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Direct marketing has an essential role to play in customer retention, as well as customer acquisition. However, one of our mega brands does not agree. They continually treat their existing customers like dog excrement. Well, this one has had enough.
Today, we at Bessant Towers received a missive from British Gas. Now, to set the scene, I should tell you that I have bought my gas from BG since 1988. I am not an energy switcher...I have a similar record with my electricity supplier, although they have changed their name so often I can't actually remember who it is. Anyhoo, BG sent me a statement stating that we were £267 in credit. Good, I thought, that should see us through the winter.
Then I read on. They informed me about the recent price rises, and said that they wanted to put our direct debit up from £69 to £120. Ignoring, for the moment, the huge amount we are in credit, this would suggest a price rise of some 90%. I got my GCE maths (yes, I am that old) and I could work that out, roughly, in my head.
This rather annoyed me. I had the same argument with them last year, which I won. I was paying some £85 a month then, and had another huge credit position. That was how we ended up at £69 per month. So, I picked up the telephone, and fought my way through umpteen options before waiting 10 minutes to speak to one of the God like customer service representatives. Reasonably calmly, I explained the situation and asked her to restore my direct debit to £69, as the credit and the fact that we were clearly paying too much for the last 12 months would make up for the increases in prices.
The answer was a resounding 'no, we can't do that.' I suggested, rather less calmly, that she should think again, and ended up back on hold for a further 5 minutes. Then she returned to say, 'no, that is what you have to pay because we have calculated your usage.'
I suggested that she was ignoring our huge credit. She said she had no authority to change the dd. I asked to speak to a manager, and she said no one would speak to me. Tomorrow, I am due a call back from a manager, who should expect a rather less than friendly response. I am now determined that if I do not get satisfaction, I will switch my supplier tomorrow.
Big deal, I hear you all cry. But actually, it is a big deal. This is not rocket science. They have my usage records, they know how much they are going to charge, and they have used some sort of algorythym to work out my bill. Then they have ignored the fact that they owe me a pile of dosh, and that their original dd figure was clearly wrong. That is a pile of crap. I have proved unwilling to move, yet they go out of their way to annoy me. That is not direct marketing, that is commercial suicide.
British Gas, and anyone else who behaves like this, do not deserve customers. They spend millions attracting new business, then for the cost of training their front-line staff properly, they seriously irritate existing customers that cost them a lot to acquire.
Direct Marketing, for me, is about direct communication with customers and/or prospects. It requires sensitivity, skill and a clear idea of what the brand stands for.
Well, gee thanks BG, I now know that your brand stands for stealing my money under false pretences and the sort of customer service that Basil Fawlty would be proud of.
You are, I am sorry to say, a complete disgrace...and I think it is risable that you are allowed to have the word British in your name.
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So, the government wants access to all our communications, for security reasons. Well, how about using their powers on Mandy and Georgous George? I bet they both used their mobiles on board the Oligarch's little paddle steamer. Mandy would not have been able to resist gloating if his palm was greased in return for trade reforms, and George would have texted Call Me Dave to say he had just been offered a wheelbarrow full of loot to fund the next election campaign.
Is that how the powers will be used? I do hope so. It would be a delicious irony if those who are screwing up our lives were caught by their own security blanket. In fact, with the governing classes' penchant for losing sensitive information, added to the power of a database recording every click of our lives, the scope for getting caught with your hands in the till must increase?
In truth, security reasons is not enough to justify this breach of our human right to privacy. The security forces can already get the right to tap phones and intercept electronic activity, so why do we need this vast, unmanageable database? It is ludicrous, and even if it is created I doubt it will ever work. Imagine the scale of it.
The mind continues to boggle.
Big red lines are being written across marketing budgets as we speak. No frills, look after the pennies, batten down the hatches until the storm abates. Of course, that is an understandable reaction, and this is no time for anyone to be wasting money. But to let the accountants get away with the impression that all marketing spend is a luxury is a grave and often-repeated mistake.
In any downturn, reduced resources requires a different approach, but the business strategy should look beyond the economic maelstrom. First of all, the company has to survive, but not at the expense of a brighter future. Get leaner and meaner by all means, but marketing expenditure can and should be directed to bringing the brand through stronger and better positioned in your chosen market.
In any sector there are likely to be closures, mergers and aquisitions. The trick for any board is staying afloat in the short term and steering a steady course to better market share and profits in the future. In doing this, your potential customers still need to know you are there. They need to know what you are doing. Even if they cannot buy at the moment, staying front of mind is essential.
That is why leaping on the marketing budget first is wrong. It shows a lack of understanding of the dark arts. It means a slower start when the economy turns.
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Prospect Swetenhams are no more. DLG, financed from Iceland, may be as shaky as West Ham United...and who's next?
For those of you who have never worked through a recession, this is what it is like. No one knows what is going to happen next. No one knows when it will end. The only certainty out there is that a lot of people in pin striped suits will be looking at marketing budgets and snatching them back to the bottom linel.
In the relatively calm waters of the last 20 years or so, there have been ups and downs, but relative economic stability. If you are under 35, this is very different. From the consumer to the biggest multi-national, everyone is going to feel the pinch. This will be a time of no frills, no wasted pennies, no lunches at The Ivy. It will be horrible, and for every Landbanki, there will be 50 agencies of one sort or another disappearing.
Having said that, many new ones will rise like a phoenix from the ashes. Now is the time for a steady hand on the tiller. Now is the time for experience (Not you Gordon, you;ve had your chance). From a marketing perspective, those who can really sell added value, on a cost-effective basis, will shine through. Results will matter more than ever before, because the person signing the cheque will be held even more accountable.
If you have never experienced a recession, remember it is not like a temporary downturn. The next two years will be miserable. At least. Fat will be ruthlessly cut away, in the hope that the skeleton will survive.
Good luck...we're all going to need it.
The news yesterday that Prospect Swetenhams and Market Monitor are being merged into ICC by Bisnode is very sad. Especially for me. I played a pivotal role in creating Prospect Swetenhams out of The Prospect Shop and Swetenhams Marketing, and was MD when we purchased Market Monitor.
Being owned by a multi-national, we were encouraged to seek out bargains and turn them into gems, to be entrepreneurs. I moved into The Prospect Shop after Rosemary Smith left, to try and take the business into profitability. That was how Swetenhams and MM came into the picture, and I left three years later, having lived through some difficult times without quite delivering the results expected of me.
Annette Holmes replaced me, and...looking in from the outside...I think she did a good job in getting Bisnode (Now owned by VenCaps) to innest in new products and new areas...certainly a better job than me.
Rosemary, myself and Annette - there is a thorn between two roses there. However, that none of us could produce the profits required to make a success of the project should say something. The project revolved around owned B2B data, as well as broking and list management, and the businesses employed some exceptional talents over the years, but obviously all to no avail.
There are many lessons to be learned here, I think. Firstly, Northern European experience does not necessarily translate to the UK market. Despite a lot of DM knowhow, Bisnode could not get it right, and changing the people at the top did not seem to make much difference. Although I am certainly prepared to take my share of any blame for my own apparent failure, I believe Rosemary and Annette are exceptionally talented people. No one ever achieved quite the right scale or business focus in difficult markets to hit the targets expected of us. But long term brand success needs investment, and PS never really received it.
Secondly, the broking and list management business models are dead, discuss.
Hidden in the furore over Mandy's return to government, and Milliband Junior starting a new department revolving around climate and utilities, was the news that Big Jock McMeltdown, formerly a junior minister at the treasury. had received a call from Golden Brown to head up another new department, the Ministry of Marketing.
Handed wide-ranging powers to both regulate and use the marketing industry for the good of New Labour (and therefore of the country in general), McMeltdown immediately announced several initiatives. Firstly, clearly intending to reduce junk mail, he introduced a new tax on direct marketing. By charging 1p per letter he worked out he could make millions from MBNA alone. Then he put another 1p levy on every DM phone call. Barclays could clearly afford another million or two, despite the credit crunch.
It was perfect, the spin doctors reasoned. It made it look like New Labour were controlling the marketing industry, but instead they were making money out of it. Carry on regardless, Big Jock told the DMA. As long as you pay your taxes, we don't really care what you do.
Basking in his success at creating his own budget at the stroke of his pen, Big Jock poured himself a large glass of whisky...kindly provided by a generous telephone conglomerate by the caseful, he mused other cunning wheezes...
Hugh Bessant
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