Wednesday, March 31, 2010

Delivering money to the people

I think I've noted before that communicating financial stuff in layman's terms is real tough - especially with the generous layering of compliance reviews and approvals that go with the territory. So obscure has the message become that I recently decided to put some gloss on the message to remove glaze from the eyeballs.

Yep. I went for celebrity, but credible celebrity. It's that old trick of making sure your high-profile person  aligns with the eyes that behold your message. I hired TV presenter and journalist, Kim Watkins, to front our new website channel, Outperform.TV.

Now before you equate Kim solely with her recent morning talk show gig, 9 a.m. with David and Kim on Network 10 (I use 'Network' because my dear American readers only equate 'Network' with 'national'). NBC is not a 'Channel', but a 'Network' if you get my drift. Don't say I don't appreciate the nuances of entertaining an international audience!

Back to the point though. Kim has finance journalism cred - especially at the popular TV level where I am trying to pitch the message. She was Paul Clitheroe's main sidekick on the high-rating Network 9 Money show in the 1990s and the thing that works for her is an ability to engage with straight-laced finance boffins at the popular level.

Will it work? Hey, it can't be any worse than sending out newsletters! The thing is that you have to try something and, after all, I've always fancied myself as a mini-Murdoch. If I eventually do a computer-generated Kim, I might even become a mini-George Lucas.

Take a look at our website and let me know if you think Kim works.

Wednesday, March 24, 2010

Celebrity signing for an unsung brand - will it work?

I've given up hope of ever engaging Australians in the subject of retirement funding - almost! Obviously, the younger you are, the less relevant it is - at least conceptually. It's even tougher when you're an unsung brand, unknown beyond your own customer base and unwilling and/or incapable of finding the big bucks necessary to turn a backwater brand into Niagara Falls.

Not that our brand has too many fundamental problems. The fund is generally well regarded by those who are engaged with, or aware of, it. It's just that we don't register on the wider consumer awareness meter.

But back to the subject. No one will ever be able to accuse me of not trying to improve engagement with our business. Along with the launch of a new website from 1 April (yes, it is April Fool's day, but the launch will happen!), I have decided to embed a 'TV' channel. That's not a channel for transvestites, but an online television 'experience' that includes interviews with various industry bods conducted for us by a reasonably high-profile Aussie TV presenter and journalist.

The best endorsement I have for the idea so far is a remark from one of the production crew that, having watched the inaugural interview series, he had learned a lot about superannuation. If that is a universal response we get from visitors to our website in the months ahead then - Eureka! - we may have hit a pot of gold. Hopefully, consumers will recall where they learned all that stuff and turn to us when they next decide to seek advice or invest their savings.

It's going to be an interesting experiment, supported by a bit of upfront PR about the involvement of our celebrity. I'll let you know in a few months how it all goes - initial response from the PR and any follow-up research outcomes. Let's hope Google Analytics is up to the task!

If you're web surfing any time after 1 April, take time to visit our website and let me know your thoughts.


Wednesday, March 17, 2010

Can you shift buying decisions for $8 a week?

I heard the results of a survey into home brand product prices versus those of well-known brands the other day. The upshot of it was that if you bought the home brand products, you could end up about $8 a week better off. Big deal!

If you're familiar and pleased by a certain company's product, are you seriously going to opt for the home brand item to save this much money? Ok, if times are tough and you're battling to save anywhere you can, you might have to but, generally speaking, my guess is you won't. It's not because home brand products are demonstrably inferior, it's just that some home brand products are equal to or better than the branded products, but not universally.

A 2007 survey by Aussie consumer organisation, Choice, examined this subject by reviewing the home brand products offered by three of the nation's supermarket chains, Woolworths, Coles and Aldi. The results showed that you would be unable to go to a single store and buy home brand products consistently comparable with the branded products.

The bottom line is that you can buy comparable quality home brand products, but could only consistently do so if you bought selected products from all three of the supermarket groups.

So it's obvious what I'm going to do. I'm your typical, time poor, middle class shopper who likes his favourite brands for their taste and consistency. I can save about $8 a week, essentially by shopping at three different supermarkets armed with my Choice survey which will tell me what products to buy where in order to match the quality of my favourites.

Sorry, it ain't going to happen. I'll shop under one roof and buy the brands I know I like. Quality, maybe even indulgence, for about $8 a week? You bet! And you know what, it would cost me at least $8 a week in fuel to drive to each of the three supermarkets required to buy home brand products to match my taste and quality expectations.

On the other hand, my wife would traverse the world to save a buck and regards me as something of a spendthrift. So there you go...

Tuesday, March 9, 2010

Australia's turbo-charged weather the true test for insurance brands

I survived a shellacking on Saturday. Stuck on Racecourse Road, Flemington, on Melbourne's fringe and just in time to catch the cutting edge of the worst storm in 40 years. To be absolutely correct, I didn't cop the hammering, my trustee VeeDub Passat did. Hail stones the size of golf balls thundered down like buck shot on the rear of my car.

While the heavens created a new-look, 'hammered' finish on the duco, you couldn't blame those whose cars clustered under a nearby railway bridge sheltering from the hail for holding the traffic up. However, they failed to count on the storm's second wave, which literally surged down the street and flooded the dip into which they had crammed. Was that a vengeful smirk on my face when I saw their exhaust pipes bubbling through the water as they made their escapes to higher ground and... into the hail? (How many 'Hail' Marys for that smirk?)

It showed there was literally nowhere to hide from that 20-minute attack and plenty of time to think about where you had filed the insurance policy against which you would surely claim in the days ahead.

I made my call today - to AAMI. Yes, that's right the company that realised a couple of years ago that the call centre 'Amy' had finally outlived public credulity by not ageing for a decade or more. Now we have a new Amy and today's task was to evaluate whether she'd still smile and 'keep our promises' when I lodged my claim.

I was pleased that, not only was the 'Amy' who answered very pleasant but, through lively and fresh engagement, gave the impression that I had been her first call for the day. Perhaps I caught the change of shift, but I think not. That would be an uncharacteristially ungenerous thought on my part...LOL.

The ultimate test for insurance companies is claims procedure and, as always after these major events, the tabloid TV current affairs shows will be looking for opportunities to feature rain-soaked, dispossessed families dudded by heartless insurance companies. It will be interesting to see how the insurance industry performs under the weight of an estimated $200 million (and rising) of claims.

I have no doubt most valid claims will be duly processed. I have even less doubt that the letters informing us of our premium increases next year will also be duly processed - aka the cost-recovery process. But let's not get ahead of ourselves here. Just get the cars and houses repaired, we'll argue about repaying the money to our insurers later.

Friday, March 5, 2010

The super advice argument - consistent but vulnerable

You have to hand it to the ideologically driven Industry Fund Services troops and their front man, David Whiteley. They've stayed 'on message' about superannuation fees and the value of financial advice. In fact, they've stayed on... and on... and on message!

There's no doubt the message has sunk in with the punters who have actually turned their attention to super. Industry fund membership has grown relative to the commercial funds.

Fees and charges have always been a top ten issue for superannuation fund members, but never Number 1 in their list of priorities. Advice has even been further down their list. The Numero Uno is always investment returns - and in the Australian disclosure environment, that means net returns after fees and tax are taken out. In other words, if retail funds and financial advisers can deliver what they call 'alpha', which means better returns than anyone else after fees and tax, no one gives a crap about the fees, unless they're completely blind to the link between effort and reward.

As a real estate client once said to me - It's not the turnover that counts, it's the left over. And personally, that's what concerns me as a consumer of investment services. I don't care what the fees or cost or advice are as long as the outcome for me is markedly better than elsewhere. That's why I pay fees, which is the point that seems to be missed by Whiteley and Co. When I get really pissed is when I pay top dollar and get something inferior. And this has been the crunch for commercial funds which, up until the last year or so, charged the highest fees and generally delivered the worst outcomes. That's why the IFS story has gained so much traction - not because of the sticker price.

The point from a brand perspective is that price is a notoriously poor value proposition. That's why I believe that the not-for-profit industry funds sector has left itself vulnerable with this message. How many companies that have positioned themselves on a 'lowest price guarantee' have gone out of business or become irrelevant in their sector? Already, commercial funds, many with the backing of the major banks that own them, are starting to offer no-frills, low-advice superannuation products. And every industry fund member most likely has a bank account, which means any switched-on banking group can do a hot job of promoting its wealth management business to individuals worth pursuing - generally the 'high net worth' types.

This is the danger for IFS if it sets up like a single-issue political party. It may attract a hard core of loyal followers, but battle for the hearts and minds of the majority, most of whom are totally disengaged from the story. And with the Government constantly shifting the goal posts in terms of retirement funding policy and the recent GFC making cash returns look almost as good as any over the past five years, the emerging issue is not fees but public confidence that the retirement outcomes forecast for them now will look anything like the outcomes they experience when they retire.

Don't get me wrong. I think for most people, the not-for-profit, low fees, set-and-forget model suits the vast majority of superannuation investors, particularly in an environment where contributing to superannuation is mandatory for any working person. I just think that the industry funds group needs to start redefining what it stands for as a 'brand' and promote the ways it adds value for fund members. Not everyone suffers 'big box' grocery shopping just to save money. For mine, I'd rather pay a bit more to engage with providers who find ways to add value to my relationship with them. And if they can do that, when others inevitably up the ante by offering lower prices, I'm unlikely to change stream.

The times they are a changin' and I can't wait to see how the battle of the brands unfolds...