Fear and Loathing in Professional & Financial Services

A little while back a former colleague of mine was invited to a job interview where they were asked to make a short presentation on “the barriers to innovation in Professional and Financial Services”.

 

As a prep for their interview, they asked for my opinion, and I – in turn – asked my own network in the professional and financial services sectors for their own views.

 

Whilst my contacts replied with number of expected factors – not least the stifling effect of Compliance and challenges in adapting legacy IT systems – there was a broader theme that came up time and again which I wasn’t quite expecting, and I found intriguing. It can be summed up in a single word:

 

Fear.

 

As one contact with long experience in the FS sector put it: “Fear of any risk, fear of the future, fear of breaking creaking legacy processes, systems and infrastructure, fear of the FCA, fear of learning from mistakes and continuous improvement, fear of simplicity, even…”

 

Fear of change seems to be widespread in these sectors. As one senior marketer at a leading London law firm told me: “There’s a general reluctance to relinquish processes which are deemed to be working ‘adequately’, despite the BD and Marketing team’s expertise and knowledge that the process could be greatly improved and benefit ROI.”

 

They went on: “There is (also) increasing paranoia regarding the security of data which has created inertia in entertaining any project where data is held in the cloud” – as if outdated on-premise servers are somehow immune to hacking.

 

Fear in these sectors seems to be a cultural issue more generally. As one contact from a law firm put it: “I worry that people will refrain from trying something new in case it goes wrong and they are criticised for it going wrong”.

 

Quite often a firm’s operating model will stifle innovation. In the words of a media consultant who works closely in the legal sector: “Some firms are too fixated on metrics that don’t reward or encourage innovation. If it’s all about chargeable time and reducing WIP then you probably won’t have the freedom and time to truly innovate.”

 

It may be, of course, that leaders in FS and PS don’t see the value in innovative thinking because they aren’t necessary creative, entrepreneurial thinkers themselves. As the CMO of one major law firm explained, “They’re often methodical, logical problem solvers, rather than completely lateral thinkers. They often tend to stick within their guide rails, rather than looking to rip the rails up.”

 

Certainly it doesn’t feel like innovation is a priority in a world of constantly changing priorities. As one senior banker asked: “What have FS companies been thinking about over the last 12 months? Innovation? Well maybe, but really it has been Consumer Duty”

 

Another major law firm CMO seemed to sum up what a lot of their peers are saying: “Genuine innovation is involves risk and lawyers are trained to be risk averse: This often presents a fundamental block on innovation.”

 

It’s not just law firms fearing risk either. A relative newcomer to the accountancy world told me: “Innovation requires creativity and breaking a current set procedure. Put it this way – creativity in tax usually leads to going to prison!”

 

It would seem innate cultural conservatism is often baked into a firm’s operating model. As an angel investor with a particular interest in FS told me: “In banks, no one got fired for saying ‘No’. Survival is the main path to financial reward.”

 

And of course as any marketer in the sector will tell you, the risk-averse culture of conservatism often extends to a firm’s marketing, especially in professional services. As I’ve written elsewhere, PS firms tend to favour caution over creativity when it comes to selling their wares.

 

So where does this culture of caution come from? A marketing services CEO with a myriad of legal sector clients thinks that “one big barrier to innovation is how important precedent is for lawyers. Law firms are not run by businesspeople – they are run by lawyers. Lawyers have a predisposition to look for an earlier occurrence of something similar when making a decision – they look for precedent. This culture builds very strong, resilient firms”.

 

And of course the argument for resilience can be a seductive one. A banking or accounting or legal firm that has been around for 300 years simply by dint of “sticking close to their desk and never going to sea” – as WS Gilbert once put it in a slightly different context – probably sees little reason to invest in innovation in the first place.

 

But I do wonder whether that is just a case of survivor syndrome? Down the years there must have been dozens of building societies, for example, that got swallowed up by a larger rival in the past simply because their undifferentiated operating models made it all the more easy for them to be assimilated into a bigger beast.

 

I’ve worked in FS on and off for 25 years myself, and for what it’s worth my own view is that larger traditional FS companies are more likely to see risk as a cost of business, than embrace it as a potential profit driver. Strategies tend to be “straight line” – in that firms choose to drop what isn’t working and continue to do what does. New processes do get adapted only until they start to fail, and then it’s “back to the old way”.

 

So – with the presumption that innovation can actually be a force for good in the FS and PS worlds – what is to be done?

 

Well it ought to be said for starters that the overall picture probably isn’t as bleak as maybe I’ve painted it. As one senior law firm marketer pointed out, “a number of UK-headquartered law firms in particular have established standalone ‘innovation hubs’ looking for tech opportunities in particular to drive change.”

 

Another law practice CMO added: “Where there are change and innovation teams / dedicated roles it helps, but they need to be embedded within the fee earning teams not a separate function.”

 

Perhaps it’s telling that this comment came from a CMO in a marketing services firm with deep experience of FS companies, rather than an FS company per se: “I would argue that if there are any barriers to innovation, it’s a lack of shared positive purpose. For example, if the financial services industry rallied around, say, increasing participation in sustainable investing, then industry innovation would quickly centre on fractionalisation of shares, and adoption of app enabled investing”.

 

Yet it should be obvious that this isn’t really happening, especially at the larger providers where the “innovation strategy” tends to be to wait and see what the disruptors do, and then buy them up if the disruption looks like working. In the meantime, we’ll let the VCs blow their money on the experimental stuff, and more fool them if they lose their shirts in the process.

 

So maybe that’s it: the key barrier to innovation is a fear of innovation itself?

 

A bit harsh?

 

Let me know in the comments. As ever, all feedback is a gift.

 

Image by: Public Domain Pictures at Pixabay

 

 

Why AI isn’t killing B2B research just yet

In a recent piece in Marketing Week, the The B2B Institute‘s Peter Weinberg and Jon Lombardo opined on how AI is going to positively impact B2B market research.

As the authors testify, it’s certainly true that there’s plenty of positive advances that AI can contribute to the research process: for example, augmenting questionnaire design by using ChatGPT to suggest answer sets to quantitative questions before they go into field.

Chat’s ability to assimilate a whole range of published data points into a coherent, logical narrative within a fraction of a second is indeed likely to make many a desk researcher question whether their entire career has just been gazumped.

And I’m sure there’s more to come.

Charting research data outputs for a deck is a largely manual process currently. But we’re probably only 6 months off being able to chuck our raw research data at something like ChatGPT and it will be able to chart the data in seconds.

Not only that, it may soon even be able to write the findings and conclusions based on the data you’ve fed it – but it’s at this point that the wheels start to come off.

Here’s why.

As I learned at a recent AI seminar hosted by the London Enterprise Tech Meetup, Large Language AI Models (LLMs) such as ChatGPT are only as robust as:

  • the data they are trained on, and
  • the algorithms used to process the data

The thing about ChatGPT is that its training data is everything that has ever been published on the internet (at least up to the end of 2021 for now, but I’m certain a bang-up-to-date version will be along very shortly). Superficially, the idea that ChatGPT has scanned every publicly-available resource to give you the information you require is an unbeatable proposition.

However the key word in the above paragraph sentence is “published”.

Other than desk research, the whole point of B2B research (be it quant or qual or a blend of the two) is that it seeks to understand what respondents are currently privately thinking – not what they have previously told the world in a tweet or blog or LinkedIn post.

An LLM like ChatGPT can instantly infer “what six things are keeping Chief Information Security Officers awake at night” based on what some of them might have committed to the internet at some point in the past.

But it can’t then allow a cybersec software marketer to segment those viewpoints by common research cohorts such as industry vertical, region, company size, job persona of respondent and the like, as they would be able to do with privately-commissioned research.

Nor can it allow a cybersec marketer to segment those viewpoints by which cybersec defence software they are currently using – and thereby derive which cybersec solutions give their CISOs the least comfort, and so present the biggest marketing opportunity to cybersecurity challenger brands hoping to steal market share from the major players where they are most vulnerable.

Nor can it tell you which one of the five competing propositions you are planning on taking to market is the most relevant, or distinctive or credible to your core audiences: you can only really find that out by asking them directly, in private.

An LLM might be able to infer the answer, but it can never actually know.

Furthermore, as Will Venters explained at the London Enterprise Tech Meetup, the fact that ChatGPT’s training data is the whole of the internet is its core weakness, as well as its core strength.

That’s because on the internet there is very rarely a single version of the truth. As Will suggested, take a look on Twitter and try and work out whether Brexit is a good thing – or bad.

Whether interest rates need to go up to counter inflation – or whether rising interest rates will themselves be inflationary.

ChatGPT can quickly tell you what the issues are, but its ability to give you a single version of the truth is severely hampered by the fact that it samples all “truths” without necessarily being able to determine which are credible and which aren’t.

 

Why AI isn’t ging to kill B2B research just yet

The key point of B2B market research is that the insights remain the private IP of the marketer that commissions it.

Publicly available LLMs can only work with publicly published data and will happily give its insights up to anyone who asks – including your competitors.

The most powerful B2B market research actually collects privately held data – most commonly directly from the minds of the subject matter experts with which the research engages.

B2B researchers can rest a little easier: LLMs will never be able to come close to matching this.

 

+++

 

If you’re a B2B marketer who’d like to commission private insights that haven’t previously been shared all over the internet, please get in touch.

Although based in the UK I work with clients globally.

I love what I do – I find it endlessly fascinating.

Please feel free to pick my brains. All feedback is a gift.

 

 

Image courtesy: Gerd Altmann via Pixabay

The 3 key mistakes CMOs make when commissioning research – and how to avoid them

Picture the scene: a CMO faced with a rapidly changing market needs to get to the heart of why too many target prospects are buying from their competitors, and needs to know how to finesse their own proposition so that more prospects entering the top of the funnel actually make their way to the point of purchase and beyond.

 

Rather than second guess the market, the CMO commissions a large-scale quantitative study to help understand how core personas in a variety of target segments take decisions at key stages of the buyer process.

 

It might be the only time in the annual planning cycle that the CMO gets the chance to take the pulse of market sentiment, and so is keen to maximise the value the company can get from the research.

 

Having agreed the research objectives, audience and methodology, the next step is to agree the questionnaire – and it’s here that for some unwitting CMOs that the wheels can start to fall off.

 

 

MISTAKE #1 – TELLING THE RESEARCHER WHAT QUESTIONS TO ASK

 

It’s surprising how many times clients approach researchers with a list of fully-fleshed questions they want to put to their market.

 

Quite often they do it out of a sincere wish to be helpful, or to save time – but it can often be counterproductive.

 

Think of it like this: writing your own questionnaire and then asking your researcher to critique it is like writing your own ad copy and then asking your comms agency what they think of what you’ve written.

 

A wee bit like buying a dog and asking it what it thinks of your barks.

 

 

How to avoid mistake #1

 

Provide the researcher with the business context in which you are commissioning the research.

 

Don’t pre-judge what questions you think you should be asking. Tell the researcher what it is you want to find out, from whom, why, and what you will do with the information when the results come in.

 

Be clear about what you need to find out, but leave the writing of the actual questions to the researcher.

 

A good researcher well-versed in your business context should be able to craft a succinct questionnaire that intelligently draws out the themes you wish to explore and give you the answers you need.

 

They will structure it logically, phrase questions in a way that maintains the respondent’s engagement. and avoid asking questions that lead to respondent bias.

 

In return you should get genuine insights that help to drive your business forward, rather than a set of numbers that simply confirm existing prejudices within your business.

 

 

MISTAKE #2 – ASKING TOO MANY QUESTIONS

 

As we’ve said, quite often, the research being commissioned will be the only opportunity the CMO gets to gain a window on their customer’s world. Especially in B2B, where research budgets can be much more restrictive than in the B2C world.

 

Which means that there can be a huge temptation to ask as many questions as possible in order to wring every last drop of value from the project.

 

Paradoxically, this can be quite counterproductive (though for some reason not all agencies seem to be keen for their clients to understand why.)

 

The reason is actually to do with the mechanics of Quantitative research.

 

Sad to say, but most respondents taking part in a Quantitative survey are far less interested in the outcome than the marketers that commission the research in the first place.

 

Which means – even if the respondents are incentivised – that their commitment to concentrating on every question and giving it the full consideration that the commissioning marketer expects can wane surprisingly quickly.

 

You only have to listen to a respondent being taken though a lengthy, directionless questionnaire to sense the increasing frustration at how long the process is taking. The disinterest in their voice rises as their concentration diminishes, and the thought they give to answering each question consequently declines with each passing minute.

 

It can get even worse with questionnaires that are completed online. Within a remarkably short time, respondents can get bored and start to click on random answers just to get to the end.

 

Researchers can generally spot the point at which this starts happening, as it results in response data getting flatter and flatter as the questionnaire progresses – but what they can’t do is filter out the respondents that were genuinely paying attention and the ones that got bored.

 

So the client is left with a number of questions where the results are inconsequential, or – worse still – unreliable or contradictory or misleading.

 

 

How to avoid mistake #2

 

In B2B research, a good researcher given a solid brief should be able to construct a meaningful quantitative survey that gets to the nub of the client’s core issues within around 15 questions.

 

It should really take a respondent no more than 15 minutes to complete.

 

(To be clear, a question that gives six statements and asks a respondent to review each in turn and indicate to what extent they agree or disagree with each is would count as a single question.)

 

Choosing your questions wisely and keeping your questions crisp has the added advantage of speeding the rate of data collection. That’s because the longer the questionnaire, the greater the drop off in completion rates. And so the more respondents the researcher has to approach to complete the questionnaire, the longer it takes to get a quorate number of responses.

 

(It’s for this reason that shorter questionnaires tend to cost less to put into field, by the way).

 

This is particularly important in B2B research if the personas you wish to survey are relatively niche. High respondent drop-off is less of an issue if you are researching UK households who buy mayonnaise, for example. If some respondents drop out, there’s probably another 20 million households you could go out to. But if you need to survey Procurement Directors in the UK telco infrastructure supply chain, for example, there may only be a respondent universe of a few hundred respondents qualified to answer your questions – and so you are going to need them to remain engaged throughout the process.

MISTAKE #3 – EXPECTING THE RESPONDENT TO DO ALL THE THINKING

 

When devising multi-answer questions it’s always tempting to add a catch all “Other (please write in)” response option.

 

The thinking is straightforward enough: “We may have missed something important – the respondents will tell us if this is the case”.

 

However most clients are disappointed in how few respondents actually tend to bother to complete the “Other” box.

 

As we’ve already explained, respondents’ commitment to completing the questionnaire can fall frustratingly short of the client’s commitment to uncovering the answers they need. So questions that ask respondents to think and type for themselves tend to be given less thought than questions where the answer range has already been thought through for the respondent to consider.

 

Not only that, having a question with an open answer field option creates a challenge in accurately interpreting the answers. That’s because this kind of question ends up blending prompted and unprompted answer sets in the same question. Which means that the chances are that had any relevant “please write in” answer been included in the original answer set, more respondents might have chosen that option as an answer.

 

How to avoid mistake #3

 

The best way to mitigate this is to do some Qualitative interviews with your core audience prior to constructing the Quantitative questionnaire. By asking for the views of a handful of subject matter experts beforehand, a skilled interviewer can tease out what the most likely answer set for a Quant questionnaire is likely to be.

 

The second-best way is to pilot the Questionnaire with a relatively small sample of respondents prior to rolling out the full survey. This is good practice in any case – it can help show up unanticipated flaws in the questionnaire logic, or help reveal where an unintentionally ambiguously-worded question is throwing up some bizarre answers.

 

By reviewing where pilot respondents have completed any “Please write in” answers, the client and researcher can decide whether these extra answers are sufficiently insightful to be included in the prompted answer set when the questionnaire is rolled out. (Though note that even in doing this it can distort the validity of the final data unless the pilot respondents’ answers are actually disregarded and then replaced with an equivalent cohort of additional respondents, so that all final respondents are all being prompted by the same answer set).

 

So there it is. In summary, if you are thinking of commissioning market research:

 

  • The best research briefs inform the researcher what the client needs to find out, not what questions need to be asked.

 

  • The best questionnaires are crisp and engaging. Over a certain boredom threshold the more questions asked, the less reliable the answers to the later questions, the more contradictory the data.

 

  • It’s always wise to do some Qual research prior to running the Quant – even if it’s only amongst 4 or 5 subject matter experts. It’ll tease out angles that neither the client nor the researcher have anticipated and ultimately lead to better insights.

 

 

 

Simon Hayhurst

February 2023

 

Uncovering where a small change can make the difference between losing a sale and landing it

“Better to have pitched and lost than never have pitched at all” might sound a little trite on the ear to your typical Sales Director, but for all the frustrations that losing a pitch can generate there is a pretty valuable consolation prize that surprisingly few companies grasp.

 

Fact is that if you have managed to progress a prospect all the way down your sales funnel from initial Awareness to the point of Evaluation – only to fail at the Purchase step – then your firm is actually doing a lot of things right.

 

Your communications are reaching at least some of the right people at the right time, in the right media.

 

And your proposition clearly has relevance to a section of the market, otherwise your prospect wouldn’t have got as far as enquiring and then shortlisting you.

 

What’s almost certainly going wrong in these cases – the thing that is holding you back – is that there’s a small but correctable mismatch between what the market really wants, and what you are currently offering.

 

And, yes, sometimes that mismatch might be vanishingly small.

 

After all – if there was an insurmountable gap between your offer and what the market wants, then you wouldn’t have made that shortlist in the first place.

 

All you need to do is find out what that mismatch is, and then you can correct it.

 

+++

 

I have a hypothesis for Sales Directors faced with rising targets in a tightening market with increasingly constrained resources:

 

“It is cheaper, easier and quicker to raise sales though doubling conversions at the point of purchase than it is to double the volume of leads entering the top of the existing funnel.”

 

The obvious question is “How?”

 

The simple answer is “Ask the ones that got away”.

 

By doing some fairly straightforward, speedy research you can understand:

 

  • What business challenge prompted a recent unconverted prospect to look for the solution you offer?

 

  • How they went about looking for their solution?

 

  • Who else’s solution they considered?

 

  • What their key criteria were in their ideal solution?

 

  • Who did they eventually choose to provide it?

 

And crucially:

 

  • Why didn’t they choose your solution, given they’d actively considered it?

 

And

 

  • What would your firm needed to have done or offered to be able to come top in that instance?

 

The beauty of this approach is that you don’t need to spend time and money looking for people to research: you already know who they are. You have their contact details, and if the failed conversion is recent they will probably have a lot to reveal about both where your proposition fell short and the relative merits of the propositions of your leading competitors.

 

Unfortunately the pitfall many otherwise switched-on companies fall into when trying to garner these insights is to make the Sales Manager who failed to convert the opportunity responsible for gathering the feedback.

 

This creates some significant challenges that ultimately defeat the objective:

 

  • The unconverted prospect is likely to view the Sales Manager’s request for a post-sale discussion as an attempt to resurrect the sale – and so not want to engage when the decision to place the business elsewhere has already been taken.

 

  • If the client’s feedback is that the Sales Manager themselves was the issue the sale fell through, this honest feedback isn’t going to be fed back to the Sales Director.

 

  • And in the same way that very few Market Researchers make top Sales Managers, very few Sales Managers make good, impartial Market Researchers.

 

  • Indeed, diverting a dispirited Sales Manager’s time into raking over the coals of a recent failure is surely less likely to be productive than setting them on a fresh sales quest and separately tasking a researcher with getting the insights you need to help the Sales Manager better at converting next time.

 

Independently garnered feedback can quickly tell you with disarming honesty where you are failing to convert, why, and where you need to finesse your proposition in order to win more business through improved sales conversion.

 

What this means for your business is that instead of spending more money trying to widen your sales funnel at the top and waiting for the leads to percolate downwards with the speed of molasses, you can grow sales through loosening the choke point in the funnel – at the point of sale itself.

 

This is especially vital in a stagnant market where the Sales Director’s plea to the CMO of “Give Me More Leads!” is simply met with a frustrated look from a CMO similarly challenged with trying to do more with less.

 

++++

 

Remember, the “nearly-boughts” came close to buying because there was plenty about your marketing approach that they did like.

 

You made the podium, but didn’t get the prize.

 

In business pitches, there’s usually nothing given for coming second.

 

But independent research can speedily uncover where you need to make those fractional gains that can convert those sorry Silvers into target-beating Golds.

 

And given you got the prospect so far down the funnel last time, it may well only be fractional changes that you need to make in order to close successfully next time.

 

If you are looking for an independent, specialist B2B market researcher who can help you do this – one whose insights are couched in the context of 25 years’ experience in B2B marketing both client and agency side – then please do get in touch.

 

Although based in the UK I work with clients globally.

 

I love what I do. I find it endlessly fascinating.

 

Feel free to pick my brains. Contact details below:

 

Simon Hayhurst

www.hayhurstconsultancy.co.uk

[email protected]

Simon Hayhurst | LinkedIn

 

Picture credit: rose_mcavoy | Pixabay

Sometimes the old advertising ideas are the best

When I first started working in advertising back in the early 1990s, I worked on the Lloyds Bank account at a division of famed ad agency Lowe Howard-Spink.

 

The part of the account I worked on wasn’t let anywhere near the TV stuff – we had to do the point of sale and direct mail grunt work. But the dozens of leaflets and posters and mailpacks we produced always had half an eye on referencing the essence of what the TV work was communicating: that Lloyds Bank was “The Thoroughbred Bank”.

 

For many years, even back then, Lloyds Bank TV ads had featured a galloping black horse and the Thoroughbred Bank endline. The agency had taken the black horse that had been a feature of the bank’s logo since as far back as 1884 and used it as a more dynamic branding device.

 

Three decades on, and the galloping black horse is again front and centre of the bank’s TV ads – as it has been on-and-off in the intervening years.

 

A friend of mine, knowing my own heritage with the bank’s ads recently asked me why on earth Lloyds Bank were still using black horses in their advertising: “Have they not got anything more interesting to say about themselves?” was the general gist.

 

I think the answer lies in the 21st century business context in which all the UK high street banks now have to operate.

 

Most of the big high street banks don’t see their share of new current accounts shift between them by more than a percentage point or two over time. They all seem to have been here since time immemorial, and their core current account propositions are all pretty similar.

 

Where they do face competition, however, isn’t with each other, but with new fintechs starting up without the legacy systems (and perhaps also without the legacy compliance culture) that prevent the big banks from doing anything especially dynamic in the personal banking market.

 

Companies like Revolut, Atom Bank and Monzo have been snapping at the heels of the big banks for a little while now, and there’s a certain cohort of consumers – I hesitate to call them Millennials – who are quite happy to trust their cash to these virtual start-ups rather than the more traditional banks with a high street presence.

 

The likes of Lloyds Bank (and HSBC, NatWest and the rest) don’t want to compete with the newer snappier brands on price because doing so would cannibalise their existing profitable business. Revolut, for example, are able to use their low-cost-base digital-only platform to offer wafer-thin exchange rates which the branch-cost-laden high street banks couldn’t hope to match profitably.

 

So the traditional banks have to pick another battlefield to fight on.

 

The point of difference Lloyds Bank have harnessed in their advertising is their longevity. I think they do this better than any other bank, and I think they’ve been very shrewd in doing so.

 

Sure, Barclays and NatWest and the rest of the big boys have been around for as long as most folk can remember too, but I’d defy anyone to recall a thematic creative thread that runs across their advertising that goes back several decades.

 

Lloyds Bank’s strategy seems to be based around the (not unrealistic) presumption that from time to time one of the new fintech start-ups will go bust – or at the very least burn all their VC funding and start to have to turn a reasonable profit and raise their customer charges and fees to pay for it.

 

And at that point a flight to quality will be triggered as folk who trusted a rogue start up with their life savings scramble to get their money back.

 

I believe the continued decades-long use of galloping black horses in their advertising deliberately leads consumers to infer that – unlike the start-ups – Lloyds Bank is not a here-today-gone-tomorrow outfit.

 

The whole point of the current suite of Lloyds Bank ads is not that the ads are fresh, but that they are familiar.

 

What Lloyds Bank (and current agency Adam & Eve DDB) seem to appreciate is that rather than breeding contempt, in financial services familiarity breed trust.

 

And if you ask most consumers what values they believe are most important in a financial company, “trust” generally comes very close to the top in most surveys.

 

So by playing on brand longevity, and continuing to invest in decades-old brand codes, Lloyds Bank seem to be successfully embedding their reputation as a financial institution that is a little more trustworthy than the Johnny-come-latelys.

 

Will today’s galloping black horse ad win any awards for creativity? I very much doubt it (sorry Adam & Eve DDB). That’s not really the point.

 

(In fact I’d be interested to know whether the continued use of the black horse imagery was proposed by the agency – *waves at Les Binet* – or a mandatory insisted upon by the bank.)

 

Will the Lloyds Bank brand still appear familiar to consumers in another 10 or 20 or 30 years’ time? If they carry on with the same thematic creative strategy, I’d expect so.

 

Could the same be said for Monzo or Atom Bank or any of the others fintech start ups?

 

Lloyds Bank’s creative gamble is that many of them won’t be around long enough to find out the answer.

 

 

Simon Hayhurst

January 2023

 

Picture credit: Adam & Eve DDB

Do your staff value your company values?

Many, many years ago I did some contract work for Churchill Insurance.

 

Upon entering their Bromley Head Office for the first time, I was presented with a massive sign that proudly set out Churchill’s company values.

 

Although we’re going back well over a decade, from memory, the first value was ‘Courage’.

 

The next was ‘Honesty’.

 

The next was ‘Urgency’.

 

The next might have been ‘Realism’.

 

Can’t remember the next one, but I’m certain it would have begun with a letter ‘C’.

 

Because the most memorable thing about the list of Churchill Company Values was that each of the initial letters spelled out the word: C.H.U.R.C.H.I.L.L.

 

So far, so contrived.

 

But in my short time at the company I learned something about how those values were embedded in the company culture that I have only very rarely seen anywhere else.

 

And that was this: when staff had their six-monthly appraisal, as a part of the review process they had to detail an example when they had behaved with ‘Courage’.

 

And also detail a different example of when they’d acted with ‘Honesty’.

 

And another of acting with…well, you get the gist.

 

Now having to evidence – what? – nine different instances when you’ve acted in compliance with nine different company values over a period of six months is quite an ask for any staff member.

 

I have no idea whether Churchill appraisals still work this way: maybe it all got a little too complicated?

 

But the concept of embedding the company values in the company appraisal process made a lot of sense to me.

 

To my mind, if a firm is going to proscribe that its staff align to a series of company values, then asking them to formally evidence they’re doing it is a not unreasonable way to get them to live those values.

 

Otherwise, why have the values in the first place?

 

These days I work for myself, but I am curious to know how other companies embed their values in their staff.

 

Does anyone embed their values in their appraisal process it like Churchill?

 

Do companies coach their staff in how to behave in line with the company values?

 

Does anyone do it really effectively?

 

Or are most company values – like most brand values – a well-meaning if anodyne wish list dreamt up by someone in an ivory tower, with absolutely no grounding in what goes on in the real world, or with any meaningful attempt to embed them?

 

Curious to know your stories.

 

All feedback is a gift.

 

 

Simon Hayhurst

January 2023

 

Picture credit: Photo by Diogo Nunes on Unsplash

 

What do you do if your sales targets are up, but your market is in decline?

If you’re in corporate sales, right now it may feel like you’re being asked to constantly push a stone uphill, but it needn’t be so.

 

The good news is that the thing about recessions is that they hit your competitors as hard as they hit you.

 

If your firm is struggling to hit its revenue targets because your clients are spending less, chances are your competitors are struggling too.

 

Typically what happens in a recession is that all firms in an industry react to short-term pressure by cutting costs – the theory being that “if we can’t grow revenue, at least by cutting cost we can try and protect our profit”.

 

That may well look fine from a CFO’s perspective for a quarter or so, but a previously well-run company won’t have inefficient staff or processes to cut.

 

Which means that where the red pen falls can create grit issues that customers start to notice:

 

Call centre wait times start to grow, and customers start to grow impatient.

 

Client service drops, as fewer account managers are retained.

 

Product development stalls, as NPD research is cut.

 

Product quality drops, as cheaper ingredients are sourced.

 

Product returns increase, because the company has cut its Quality Assurance investment.

 

And so on. By a thousand tiny cuts, chances are in a recession that your competitors’ customers are starting to get disgruntled.

 

And disgruntled customers can be shaken from their inertia by a timely call from a Sales Rep who knows which of their competitors are experiencing the lowest customer satisfaction levels, and why.

 

All of a sudden, a Rep armed not only with which competitors are failing their customers but exactly where they are failing – be it on product quality, or service delivery, or uncompetitive pricing – has an empathetic opening to a sales conversation that might otherwise have been a pure cold call.

 

And so rather than trying to grow a shrinking market, the Rep can focus their time and attention on converting clients of the competitors with the lowest satisfaction levels, and the highest propensity to defect.

 

***

 

So how does a Sales Director struggling to make new sales in a contracting market identify which of their competitors are failing, and where?

 

Well…one start point might be to engage the services of an independent, experienced market researcher who can:

 

– contact a number of your competitors’ clients

 

– ask them to give a mark out of 10 for how satisfied or dissatisfied they are with the service they are currently getting

 

– ask them a few pertinent questions about why they’ve awarded that mark: what the incumbent is doing well, and where they need to improve

 

– and whether their perception of the incumbent has risen or fallen in the last 6 months

 

A competent researcher can then aggregate the respondent data and give you an analysis of which of your competitors are doing well and improving (in which case your sales team might be best advised not to chase their tails on those leads).

 

And which of your competitors are doing badly and getting worse, and why.

 

In which case you can focus your sales teams’ attention on those types of businesses – the ones ripest for a timely sales call from a company that can directly evidence they have a better solution than the one the buyer is currently having to put up with.

 

***

 

Trying to grow your sales in a shrinking market might well be asking the impossible – but growing your sales through stealing your competitors’ unhappy clients is certainly possible if your sales team are armed with the right data.

 

If you sell to other businesses and want to uncover exactly which of your competitors are struggling and where, please get in touch.

 

I have 25 years’ B2B marketing experience, both client and agency side.

 

This means that I’m uniquely placed to see each B2B marketing challenge from 3 perspectives: the client’s, the comms agency’s and the end-user’s.

 

I’ve spent the last 5 years working in B2B market research, and since January 2021 have been running my own independent market research consultancy.

 

If you have a B2B marketing challenge where powerful market insights might give you an edge over your competition, please feel free to pick my brains.

 

I project manage the entire research process from initial brief to final report – clients deal with me directly, not an inexperienced junior.

 

I am accountable for the whole research process – I worked in B2B key account management for over a decade, and I am not in the business of letting clients down.

 

I can conduct quantitative or qualitative or desk research – whatever discipline the project requires.

 

I can source quantitative respondents in almost any country, in almost any vertical, in almost any language.

 

Same for qualitative research respondents (other than that I only conduct qualitative interviews in English).

 

Quantitative sample sizes usually start at 100. The max sample size is only limited by the size of the attainable research universe.

 

I don’t take on any brief without first confirming to the client that the personas they need to survey can be reached in the quantity required and the time allowed.

 

Finally: I love what I do. I find it endlessly fascinating.

 

You can contact me via [email protected]

 

More details here: www.hayhurstconsultancy.co.uk

 

Picture credit: Tumisu on Pixabay

Maybe “loyalty marketing” is a misnomer. Maybe we should all be inertia marketers.

Another day, another mailing from John Lewis Finance politely asking why I haven’t got around to applying for their new Partnership credit card.

 

But this isn’t a regular credit card recruitment mailing of the kind that MBNA and Capital One used to carpet-bomb the nation with at the end of the last century.

 

The thing is, I’m already a “loyal” John Lewis credit card holder (though I won’t be for much longer.)

 

We’ve actually had a JLP credit card for nearly 20 years, and never had an issue with it.

 

It’s not cost us anything to hold. They regularly send us vouchers to spend in John Lewis or Waitrose. Customer service has been (reasonably) frictionless.

 

So what’s going on? Why ask me to re-apply for something I already have?

 

***

 

Earlier in 2022 John Lewis announced it was ceasing its own-label credit card provider relationship with HSBC and switching its provider to a specialist company called New Day:

 

John Lewis relaunches Partnership reward credit card with New Day – Which? News

 

There will have been genuine business reasons for this – perhaps HSBC are reining back on providing own-label credit cards. Or perhaps New Day have offered JLP a much better commercial offer to switch provider.

 

Whatever the reason, John Lewis’ decision to switch credit card provider will have come with a consequent challenge, which seems to be this:

 

Existing cardholders’ credit agreements actually seem to be with a company called “John Lewis Financial Services” which – despite the name – seems to be wholly owned and run on John Lewis’ behalf by HSBC.

 

It may well be that the John Lewis Partnership can’t just migrate a credit agreement from HSBC to New Day without the cardholder’s express permission.

 

And doubtless New Day will have its own credit scoring thresholds that the migrating cardholders will have to pass.

 

And so in order for existing cardholders like me to remain a “loyal” JLP cardholder, we are being asked to complete an online application form to reapply for a credit card we already hold.

 

No matter how simple John Lewis or New Day make the re-application process, the need for the customer to do anything at all creates friction.

 

And creating customer friction breaks customer inertia.

 

Which brings me to the concept of “loyalty”.

 

***

 

I’m pretty certain that the data bods at John Lewis reviewing my spending history prior to the migration would have put me squarely in their “JLP Loyalist” pot:

 

Joint cardholder for nearly 20 years.

 

Spending patterns indicate it’s been used as a primary credit card.

 

Regular Waitrose shopper.

 

Never made a late payment.

 

Why wouldn’t I migrate to the new card?

 

The thing is, I’m not especially “loyal” to the JLP card. It’s more that I’m, well … inert.

 

I’ve never been given a reason not to use my John Lewis card, so I’ve just kept using it out of habit.

 

But JLP are now forcing me to break that habit and think about whether their card is actually the best card for me.

 

Doing nothing isn’t an option, because if I do nothing, my existing HSBC-provided card will simply stop working.

 

And so thus prompted, for the first time in nearly two decades I’ve had to have a quick look around at what other credit cards are on offer.

 

And of course there are plenty of introductory offers that are way better than the incentive John Lewis are offering up for me to migrate to their new card.

 

Faced with the unwanted task of having to reapply for my existing credit card, I’ve been nudged out of my inertia and applied for a different one with a much more enticing reason to sign up.

 

Which set me thinking.

 

When a business claims it has a “loyal base of x000 customers”, are these customers genuinely “loyal” – or do they simply continue to purchase out of habit?

 

Are they loyal, or simply inert?

 

***

 

Canny marketers looking to maintain revenues in a period of tightening demand may sense an opportunity here, albeit a defensive one.

 

If most customers aren’t loyal, but simply habitual, then maybe there’s something profitable to be said for re-examining your customer journey to try and eliminate any point that presents grit.

 

Maybe the question to ask isn’t “How can we reward loyalty?” but “How much easier can we make it for people to buy from us again?”

 

Example: a jacuzzi company has an IoT device embedded in its filtration system to monitor when the sanitizer is running low so that the sales rep can call the customer before they run out of sanitizer, and offer to send them a replacement. They don’t offer money off for re-ordering as a “loyalty bonus”: they just make timely re-ordering simpler for the customer.

 

Example: my local garage sends me a reminder email when my car MOT is due, with an API link to a selection of dates that I could book the car in for. I don’t even need to phone to book or ask what time is good for them, I just click the link on the date / time that’s convenient for me (and that their booking system tells me is available). Again, they don’t offer me money off for repeat bookings – they just make repeat booking as simple as they can.

 

Are there other examples of companies that engender inertia by making repeat purchase frictionless without having to promise money-off vouchers via a loyalty scheme?

 

If you know of one, please post it in the comments. (I’m especially interested in B2B examples).

 

 

Simon Hayhurst

December 2022

 

Picture credit: Photo by Sunder Muthukumaran on Unsplash

How to out-think the competition in a recession

Thought experiment.

 

A recession looms, and the business you work for decides to tighten its belt. All discretionary or uncommitted marketing spend is put on hold until the business feels it has seen off the worst.

 

All of your competitors, bar one, facing the same recession, do the same thing.

 

The odd one out takes a different tack and maintains their marketing activity.

 

What happens next?

 

Let’s assume the looming recession actually happens, and the overall market shrinks as macro demand in the economy contracts.

 

The companies that have reined in their spend will see their business contract broadly in line with the wider market contraction.

 

As a result, costs will be cut. NPD will be put on hold. Service levels will suffer as call wait times lengthen. Product quality will start to suffer as the firm pivots to cheaper suppliers.

 

Bit by bit, right across the market, the customers still in need of the products or services that they originally signed up to will get increasingly disaffected with what they are now getting.

 

But they won’t really be able to migrate to another provider, because all providers are cutting back.

 

All providers, bar one, that is.

 

You can guess the rest.

 

In the thought experiment, disaffected buyers migrate to the one provider continuing to invest in service, product and promotion. The most disaffected might even be prepared to pay an inflated price for the product / service that no one else seems willing to provide.

 

The company that manages to keep its head whilst all the others are quoting Kipling will actually prosper, whilst their rivals flounder.

 

Now of course this is only a thought experiment. Real life isn’t this simple or linear.

 

But there clearly is a recession on the way. Indeed it’s almost certainly already here.

 

So what now?

 

If the events in thought experiment hold true even tangentially, then the chances are that many of your competitors are already drawing in their horns.

 

Which means their product or service quality is already suffering, and their existing customers are already noticing.

 

Your rivals aren’t going to be marketing themselves out of this position – they’ve already decided that marketing is expendable.

 

This makes your rivals vulnerable – not just to the sea changes in the economy – but to challenge from any competitor that can identify and then exploit that vulnerability.

 

So maybe the shrewd strategic response isn’t to take a big red pen to the entire marketing spend, but to invest some of it in finding out which competitors are vulnerable to having their customers poached by you. And then focus your sales and marketing effort on winning disaffected business from the competitors who cut too soon.

 

If you’re in B2B marketing, I can help with the first part: I’m an independent B2B market researcher. I can arrange to contact a representative cohort of your biggest competitors’ clients and ask them how they are feeling right now; whether their current service experience is getting better or worse; and how likely they might be to switch suppliers if a better one came along.

 

I can then produce a ranked report of which of your rivals are the most vulnerable to attack, and identify the chief Achilles heel of each – price, service, product quality, responsiveness etc.

 

You can then arm your sales team with propositions tailored to exploit each competitor’s specific weakness.

 

In a recession, you don’t need to try and grow the market to stay alive – if you hold your nerve, you can poach your struggling competitors’ business.

 

All you need to do is identify which ones are hurting the most.

 

My contact details are below. Go get ‘em.

 

 

Simon Hayhurst

www.hayhurstconsultancy.co.uk

[email protected]

 

Picture credit: Ussama Azam www.ussamaazam.me   via Unsplash

How to fail quietly – and succeed in the process

Elon Musk’s Twitter takeover seems to be following the classic phases of the “Move Fast and Break Things” mantra.

 

That’s fine for Musk: right now he’s the richest being on the planet. If he breaks things and fails fast with Twitter – no matter how expensively or publicly – he knows he’ll still live to see another day.

 

And ultimately he’s only answerable to himself.

 

But…what about those CMOs out there who don’t have that luxury?

 

Whose employers don’t grant them the deep pockets to allow them to fail fast?

 

Who don’t have the bandwidth to chase every NPD rainbow before pulling the plug?

 

Or who certainly don’t want to be seen to fail publicly?

 

If you aren’t Elon Musk – and so failing noisily and expensively isn’t an option – how does “failing quietly” sound?

 

It probably sounds a little odd, but let me explain.

 

 

Why failing quietly is the better strategic option

 

According to Professor Mark Ritson, the essence of business strategy is as much about deciding what you are not going to do, as much as what you are going to do.

 

The challenge for a CMO charged with developing their company’s marketing strategy is finding an evidenced basis on which to take the decision not to invest in sub-optimal strategies, propositions, product launches, advertising campaigns and the like.

 

Yet there is rarely the time in a CMO’s increasingly short tenure to repair an ad campaign that is publicly tanking.

 

Or patch up a product that is publicly sinking.

 

Or turn around a pricing strategy that is publicly failing.

 

Indeed it can be very hard to turn around anything that is already out there in the public domain, once market sentiment has given it the thumbs down.

 

So what’s the solution?

 

 

Ask first, act later

 

So many times in the rush to get to market, one of the most basic tenets of marketing can get missed: “Understand Customer Need”.

 

Sure, you can do this by going Agile and rushing a beta version to market, and testing the product, pricing, promotion in the real-life laboratory of the market, updating iteratively as you go.

 

But even getting to a Minimal Viable Version (of a product, or an ad campaign or whatever) takes an investment of time, people and money.

 

The senior management time investment alone can be punishing. Even more so for B2B CMOs, who are rarely as well-resourced as their B2C counterparts.

 

And their time (and that of their limited teams) can quickly get spread all-too-thinly across a range of shotgun initiatives, many of which are all-too-destined to fail.

 

Taking a little time and investing a little budget to actually understand customer need – without taking a product or service all the way to market to test it – can save a firm thousands of dollars, as well as thousands of staff hours, and thousands of the fast-greying hairs on the CMO’s head.

 

But how does a CMO go about it?

 

 

A quiet word

 

There’s a very simple, proven framework that can help a CMO do this. It’s particularly applicable in the B2B field (which is my own speciality) but the general principles apply to Consumer world too.

 

You have a quiet word with four groups of people:

 

  • Your own current customers
  • Your former customers
  • People / businesses who enquired about your product or service, but never bought
  • People / businesses that buy near-equivalent products or services from your competitors

 

You ask them a handful of short questions on these topics:

  • What problem they were looking to solve when they bought your / didn’t buy your / bought a competitor’s product or service
  • The places they looked for a solution
  • The criteria they looked for in the solution
  • Which solution providers they considered
  • Who they chose
  • (If a business decision) which people in the business chose them
  • Why they chose them
  • And how happy are they now with the choice they made?

 

And whilst asking these questions you also can test your own market hypotheses with them without all the cost and palaver of taking your hypotheses to market.

 

To do this properly may take a couple of months (the hard bit, particularly in B2B, is getting hold of people who have chosen your competitors without ever indicating to you that they were in your market).

 

But once the data is in, you will know everything you need to about:

  • Who buys from you
  • Why they buy from you
  • Who buys from your competitors
  • Why they buy from them

 

Crucially, you will also know:

  • What media and proposition strategies your competitors are successfully using against you
  • But also where your competitors are weak
  • On what basis customers / clients of your competitors are ripe to be poached
  • What it is the market really wants, but your competitors are not providing

 

And more brutally:

  • Where your own customers / clients are ripe for poaching by a competitor who understands and can service their needs better than you do

 

In terms of marketing planning, ultimately you will give yourself the huge business advantage of knowing:

  • What value propositions to put in front of which audiences
  • At what time in the buying process
  • In what media
  • And potentially at what price point

 

So that you can get to the point where you can persuade prospects currently buying from your competitors to buy from you instead with much greater certainty.

 

Importantly, it also means that you can give yourself an evidence-based filter which you can use to abandon those superficially seductive strategic choices that would otherwise lead to a massive waste of your company’s resources, time and cash, and result in a very public failure.

 

 

Why this matters

 

The huge advantage that research confers on those that commission it – compared to those who rush to market with an unfocussed plethora of tactical options – is that your competitors do not know what you are planning.

 

You can test your product hypotheses in the market without actually taking them to market – and let them fail quietly before your competitors even know what you are up to.

 

As a result:

  • Strategic dead-ends no longer suck up time and resource.
  • Instead, that resource is re-focussed on strategies with the best chance of success.
  • Your teams are aligned to a strategy founded on insight rather than guesswork.
  • It is far easier to make a compelling business case for the resources you need for your strategy to work.
  • It is also far easier to get senior stakeholders in other directorates to back your strategy with their own resource.
  • And ultimately the Go To Market strategies you actively chose to pursue are far more likely to succeed.

 

In other words not only do you fail quietly, you succeed publicly.

 

And without all the other distractions of failure, you succeed far more quickly too.

 

 

Making the business case for research

 

Yes, business research does need an investment of time: probably 2-3 months in many cases. Sometimes longer, depending on your market.

 

But the financial investment required is almost certain to be a fraction of what you might otherwise end up investing in a poorly-designed product, or a badly-framed ad campaign, or a hopelessly misjudged price-point.

 

Especially in the B2B world – where a single sale can generate $000’s of revenue – you can recover the cost of the research off the back of achieving just one additional sale you wouldn’t otherwise have made.

 

Or retaining just one paying current client you might otherwise have lost to a rival.

 

So quiet failure does come at a cost – but it is a heck of less than the cost of public failure.

 

And it’s also a heck of a lot more rewarding from a career perspective when the result is public success.

 

 

Why ask me to help you with your business research?

 

As I said earlier, my specialism is business to business research. (If you’re a consumer marketer, sorry you may need to look elsewhere – I guess that’s my own strategic choice).

 

I’ve actually been working in B2B marketing for 25 years.

 

I spent 10 years in advertising agencies running significant B2B multi-media marketing campaigns on everything from TV downwards, for some very big B2B brands.

 

I then spent 10 years in senior client-side B2B2C marketing and account management roles.

 

And I’ve spent the last five years solely in B2B market research – with the last two years running my own successful independent B2B market research consultancy.

 

This means that unlike many B2B researchers, I have actually walked-the-walk in terms of applying many of the kinds of insights that my research will uncover.

 

Which means that my findings, recommendations and conclusions will always be grounded in the practical realities of the day to day challenges any CMO faces.

 

I love my job. Clients pay me to go away and find out interesting, valuable things about their market.

 

I find it endlessly fascinating.

 

My own research tells me that my clients think that comes across in the way I go about conducting their research, and the effort I put into giving them genuinely valuable insights they can use in their own businesses.

 

I’m UK-based, but work with clients globally.

 

If you’re a B2B marketer and would like me to help you fail quietly and succeed publicly, please do get in touch.

 

 

Simon Hayhurst

www.hayhurstconsultancy.co.uk

[email protected]

November 2022

 

Photo by Kenny Eliason on Unsplash