Cynicism

[peterbirks]

Not wishing to make KFC the sole butt of my annoyance at modern advertising, I thought I would mention a couple of other marketing campaigns that indicate product designers in severe need of a happy slap.

I mean, is it any wonder that we become cynical when large companies twist the truth so shamelessly? I can only hope that the board of Halifax and Centrica have low-paid researchers trawling Google Alerts for any mentions of their companies, just so they can see what shits I think they are.

The Halifax advert (for which, also, shoot the managers of the campaign; I do not want to buy financial products from people who look like they frequent nightclubs in Essex) appears to offer 6.17% on an account. But, look closely at the small print. You have to pay in at least £1,000 a month, and this rate of interest is only paid on the first £2,500 in the account. The interest rate on money above this level is at the next tier down.

And what rate, you might ask, is the next tier down?

0.1%, that's what.

So, look at it from Halifax marketing point of view. If you think of a customer who pays in a grand a month as an "acquisition", and you reckon that this interest rate is about two points higher than they would be able to pay (and still make a profit), then the maximum cost to Halifax is 2% of £2,500, or the grand sum of £50. Not bad as an acquisition cost.

But, of course, that doesn't allow for the amount over £2,500 that people leave in the account. Indeed, an average of £3,750 would make the acquisition cost effectively zero. Meanwhile, for those who leave less than £2,500 in the account, the cost of acqusition once again falls away.

Let's suppose, though, that everyone shrewdly used the Halifax scheme to maximum benefit. What do you think would happen? Well, I'll tell you my predictions.

1) The Halifax would issue a press release calling such customers "rate tarts" or some such similar pejorative term.
2) It would change the rules of the account.


As a peak-time headline rate advertisement, it's all perfectly legal (of course). That GOMs like me consider it exploitation of loophole after loophole in the advertising rules is, well, neither here nor there.

I was reminded of the most chutzpah-ish piece of salesmanship the other day, when a letter from British Gas notified me that their prices were coming down. Well, I thought to myself, about time, what with wholesale gas prices coming way off their highs of 18 months ago.

But it was about 18 months ago that British Gas sent me a letter that had me laughing in disbelief. Right after hiking their prices astronomically (because wholesale prices had doubled), the company offered me the chance to lock in at the current rates. That, in itself, was a piece of brass nerve, since it locked me into British Gas. But, on top of that, they wanted to charge me for the privilege.

I wonder hwo many people paid that 3.5% (or whatever it was) for the privilege of locking in at rates some 10% or so higher than I am now paying. I bet they are happy BG customers. About as happy as any of the people who seem to queue up to complain about the so-called "service agreement" you can take out with BG. Under this agreement, you pay BG lots of money every month, and they then have no incentive to send someone round when your boiler breaks down, because BG already has your money.

++++++++

I see that Captain America has taken it in the neck after 60 or so years as a comic book superhero. It got me thinking. Would anyone even imagine a comic book "Captain UK" (apart from Rory Bremner in satirical mode)? I doubt it. I mean, we wouldn't be able to take it seriously, would we? And yet, here we have Captain America.

The more I thought about this, the more I realized how similar America today is with Britain in the late 19th century. Here we have countries that really do believe that they are doing good, and have the money that they have spent to prove it, and yet they remain utterly bemused when many other countries do not repay this philanthropism with undying gratitude. The UK then and Britain now had the world's dominant reserve currency, which enabled Britain in the 19th century and the USA today to function with an ever-burgeoning foreign account deficit. And Britain in the 19th century had its John Bull, a character created without ironic intent and not laughed at in any way shape or form.

John Bull kind of died out with the loss of Empire from 1947 on. Captain America died today. Interesting times.

+++++++

I heard a fascinating statistic on Radio Five last night (although I haven't checked for its veracity). This was that the average age of the football premiership attender this year is 43. I've long been a fan of the "organic" nature of products - be they newspapers, or companies. Young people's newspapers become old people's newspapers, and young companies become old companies, in the sense that older people are working for them. It's a kind of "fiscal drag" in terms of age.

Now it looks as if football is going the same way. Prices have been hiked so dramatically since I was a kid that it is no longer a Saturday or Sunday's entertainment for young people. It's live entertainment for people like me, who used to go when they were young, for the grand price of 2/- or thereabouts, but who can now pay whatever it is that Chelsea charge. Not that I do go (I haven't been to a game since 1972), but I could.

But what of the future? It seems to me that if the habit of going to live games is not inculcated in the young, then, eventually, you are going to get attendances falling off for the simple reason that attenders last year are dead this year.

+++++++++

A lovely walk back through Hyde Park from the Vietnamese Embassy to the office. I actually saw the Diana Memorial Fountain for the first time. The Lido restaurant looks a lovely place to relax over a cup of coffee. The Rio was on; the world was free of bicycles, cars, horses, roller-skaters, schoolkids, shoppers, policemen, traffic wardens, security announcements and McDonald's. Just the Serpentine, some swans and ducks, some boats, and quiet people having a nice quiet time. Rock on les vieux.

Comments

[wwhyte.livejournal.com]

When are you going to be in Vietnam, and where? It looks now like we'll be going to Hanoi on the 24th to complete our adoption.

My favourite place was Hoi An, but Hanoi is also a great city.

[peterbirks.livejournal.com]

I fly to Hanoi on April 21st for a week, William, some time after you will be there. Although your paths might cross with the editor of Insurance Day, since Richard will beout there with his girlfriend. She is compiling the Time Out Guide to Vietnam.

Can you tell me what jabs I need to have by any chance?

PJ

[wwhyte.livejournal.com]

We actually went on safari in Zambia the previous year, so a lot of the jabs we got for that were still active. You definitely need Hep B. You only need malaria if you're going to certain parts, a long way off the tourist track.

Tell Richard's girlfriend she HAS to eat at the Green Tangerine:
http://www.frommers.com/destinations/hanoi/D55644.html and
http://vietnamnews.vnagency.com.vn/showarticle.php?num=01RES200305

Big Ben

[(Anonymous)]

There was a Captain Britain character for a while (I think) in the UK version of "Marvel Monthly" or whatever it was called. I presume he died a rapid death at the news-stands. I am amazed Captain America lasted as long as he did. If memory serves he was a WWII* character who later became a Cold War warrior and who then should, by rights, have become unfeasibly unfashionable in the sixties.

The short-lived but excellent UK comic, Warrior, gave us "Big Ben", a uniquely British superhero with a bowler hat and umbrella, but he was far and away the crappiest character in the comic (the best being the masked anarchist in "V for Vendetta"). It's possible he was an ironic creation but at the age of (thinks ...) 25? at the time my sense of irony was not so well developed.

The Halifax account you mention is scandalous. If you have to put £1,000 a month into it, surely you will soon be beyond the £2,500 precipice, or have they forgotten to include the usual penalties for withdrawal?


John H.


* Pre-WWII from a US viewpoint, I imagine, as he was created in 1941, according to Wikipedia.

Re: Big Ben

[peterbirks.livejournal.com]

Well, the Marvel Monthly "captain Britain" was surely a misudgement on the part of Marvel Comics. And I still refuse to believe that anyone could have taken it seriously.

However, I admit that my knowledge of this was zero, which just goes to show that I stopped reading comics long before most of you lot did.

PJ

Re: Big Ben

[the-maenad.livejournal.com]

Actually Captain America was revived in the '60s after being in limbo (or rather, frozen in a block of ice) through the '50s. Remember that the '60s were the era of Vietnam as well as flower power.

[badblood44.livejournal.com]

http://en.wikipedia.org/wiki/Captain_Britain

[jellymillion.livejournal.com]

I thought HSBC were probably first with the sneaky marketing of this new style of account a few months ago. I was waiting for a cash point and reading a poster in the window: 5% on current accounts. Interesting, thought I. Then the small print: only paid on the first £2500 in the account, 0.1% thereafter. And a £120 annual fee. So it's basically an account that pays you £5 for keeping a minimum £2500 balance. Which is 0.2% interest. Whoop-de-doo.

Bad Financials

[geoffchall.livejournal.com]

The list of financial products adverts that make me want to put a foot through the TV screen is a long one. My bitterest hatred are the ads for the likes of Ocean Finance and their ilk selling the wonderful option of consolidation loans at anything from 8% upwards when there are so much cheaper alternatives along with 'stop spending so much money you un-self-controlled idiots'.

Why do people think that having Phil Tufnell or Carol Vorderman sell you a financial product is any recommendation. I'd take advice from Phil Tufnell on finance the same way I'd take advice from Eddy George on spin bowling.

The latest to have cushions thrown at it is ING who, when new and in need of new customers, offered interest rates that were very good and on a range of products. Now that they have fallen well behind as they attempt to retrench their customer base. So the advertising says absolutely nothing about rates and goes on about a bank that is simple and straightforward in its approach. Sticking the money under the mattress is simple and straightforward mate, but the interest rate is about the same as yours.

The only financial advertising I have any tome for is Nationwide's fat bank manager being up-front about some of the tricks of the trade. The first couple of these were directed by Armando I by the way and they do point up the deficiencies of some banking practice. The one drawback is that Nationwide (while being mainly good) isn't above some trick practices too. But at least the adverts carry truth.

Re: Bad Financials

[peterbirks.livejournal.com]

Yes, the Mark Benton ads. I didn't realize that Armando directed a couple of these, but it makes sense.

My problem with Nationwide is slightly different from yours. I think that, in the main, they are straighforward. But that's because they run a mile from any kind of customer who isn't straightforward (like, er, me). This is nothing to do with credit rating and the like. It's just that Nationwide can only cope with uncomplicated financial stuff. Well, hell, I can cope with uncomplicated financial stuff. In other words, the only mortgage, loan, or account that I would be likely to be able to get from Nationwide is one that I wouldn't need. Try walking into a branch and asking for a dollar-based account, for example. Or a less-than-absolutely-straightforward mortgage.

Oh, and I walked into the Nationwide once to see someone, and waited 10 minutes behind another couple who seemed to have been waiting much longer. No-one appeared. I walked out again.

This leads me to suspect that Nationwide is not dissimilar to most banks. As soon as it starts to rain, it will take back its umbrella.

PJ
PJ

Re: Nationwide

[geoffchall.livejournal.com]

Yep - Nationwide are very much a vanilla kind of bank, sorry, building society. But they do good stuff such as a credit card which doesn't charge fees on overseas transactions. They keep trying to go over to a regime whereby you get a decent rate as either new or existing punter, but it's hard swimming against the tide of offers for short-term 2 year discounted rates. And they continue to be the big force that stops the Flex system charging for ATM withdrawals.

They aren't saints and yes they are a bank, but something of that ethos as a mutual organisation is still in the machine. And I say all this without a single financial relationship with them (although I will be getting a credit card from them for overseas travel soon).

Halifax

[gayparee.livejournal.com]

But doesn't the Halifax's account just require the "caveat emptor" view that you mention elsewhere in connection with AIM listings?

The account is great for me - I pay in my salary, which is around that amount, each month. It dwindles down to nothing over the course of the month but in the meantime I get 6%. Great - previously I had a current account with the Halifax anyway, but it paid 2.5% on all balances. If people put money in the account without checking the conditions, more fool them. (In fairness to the Halifax, when I switched my current account over from my previous one, the woman made it very clear about the rate change over £2,500.)

I do get very wound up reading the Money section in any weekend paper, which is full of people complaining about banks and insurance companies doing things that the terms & conditions on accounts allow them to do. If you don't like it, go elsewhere.

Nick

Re: Halifax

[peterbirks.livejournal.com]

Hi Nick:

Yes, this is a fair enough point. I have no objection to banks making money off other people. If someone is stupid enough to lump 20K into this kind of account, then more fool him or her.

But the Halifax advert is certainly not aimed at the likes of you, who has a Halifax account anyway, and exploits the 6.17% interest to the max.

And kudos to the Halifax for pointing out the restrictions on the rate when you switched accounts.

But what is irritating is the deceptiveness of the advert and, I am sure, the fact that if all the customers were like you, the special rate would disappear fairly sharpish.

Like you say, I should be grateful. In the past it has been the syupidity of most bank users that has given me free banking and free credit cards. As they get smarter (or, more accurately, more protected) so it becomes more likely that the banks, forced to look elsewhere to boost their bottom line, will start charging me.

PJ