Andrew Ferrier’s Blog

The political arguments around government and business are well understood. At one extreme are people who despise profit-making businesses, considering them a necessary evil at best, and who’d prefer to see governments take more action to protect their and society’s interests. At the other are those who’d prefer to see governments scaled down significantly and businesses given more freedom.

People with my political opinions often make arguments for the latter based on either practical or moral arguments. Richard and I had a online discussion about this recently. But maybe there’s another, more silly, question that’s missing: which is sexier: business or government? A quick look at the primary US government portal compared to Wal-Mart’s homepage leaves me in no doubt who hired the better web designer, at any rate (and Wal-Mart is hardly an example of glamour). Which corporate body makes you want to interact with them? Anybody who’s spent any time at a UK local council, with their cuppa-and-rich-tea-biscuit image, will know what I mean (that’s an example of non-sexiness, if it’s not clear: not that I have anything against rich tea).

I’m semi-serious, actually - this does matter - it’s an issue of marketing. Clearly a company cannot actually be sexy - only people can be that. But the Virgin family of companies gets pretty close - and not just because of the suggestive naming. It’s an image that has been carefully cultivated by the folk at Virgin. Virgin is a company that you want to like (well, I do, anyway), irrespective of the fact that their trains don’t run on time.

I think the reasoning behind this is simple. Companies have to be sexy - or at least, they have to project an image which is aligned with values their customers want them to have. Sometimes this is sexiness - and Virgin is a prime example of a brand that’s attacked several markets with that technique and won some new custom. Sometimes, to be fair, there’s another image to be conveyed (UPS brown vans and brown uniforms are not alluring; but they do project an image of reliability). Conversely, government has no such motivation to project an image of anything - or at least the vast majority of unelected officials don’t. There’s no requirement to improve, no motivation to act like a marketer, because there’s no competition. Thus, government will always continue to project an image of dull and incompetent, whether that be the case or not. As Seth says, ‘[people] lose their jobs because of boring marketing’ - except in government they don’t, because they rarely lose them at all.

It’s probably not the most pressing problem the world faces right now, but wouldn’t it be nice to stop worrying about global warming for five minutes and think about how to make the institutions we deal with on a daily basis more appealing?

I’ve written many times before about the poor quality customer service I’ve received from LOVEFiLM, the UK’s largest DVD rental service, and those posts have solicited a lot of complaints from other people too. I’ve finally bitten the bullet and cancelled my account: a combination of frustration with poor delivery times, them never sending me the titles high on my list, and that they won’t allow me to freely suspend my account for a reasonable amount of time. It’s sad, as they used to provide excellent customer service when I first used them a few years ago (when they were small), but acquisitions and growth seem to have made them fat and lazy, and they no longer treat customers with respect - written examples are all over their website, including the veiled threats of continued charges in the cancellation process itself.

At some point, probably once I return from San Jose, I plan to sign-up with Amazon instead, who now seem to be their largest competitor, and stock 2/3 of the titles that LOVEFiLM do, so might still stand a chance of fulfilling my sometimes unusual taste. Amazon have generally provided excellent service in the past, and it’ll be interesting to see if their foray into DVD rental hurts or helps their brand.

Faffing with the contents of my wallet today in the supermarket, I began wondering about reward cards - are they still worth the plastic they’re printed on? They’ve been around in the UK for over a decade, and two major supermarkets - Tesco and Sainsbury’s - still use them. I have one of each. However, I sometimes wonder why I don’t throw them away - cash rewards of approximately 1% (presumably all that the supermarkets can afford) hardly seem worth the bother of carrying them.

Safeway (now Morrisons) scrapped their loyalty scheme in 2000, citing that it wasn’t worth the money to run it. They may have been right. Nevertheless, Tesco, now the UK’s biggest grocery retailer, still retains their scheme, and as the Economist states, the information goldmine (the only reason the supermarkets run loyalty schemes) is lucrative - although they don’t say exactly how lucrative. Safeway’s decision indicates the margins can be thin. Despite the low return on hassle I mentioned above, though, there are still plenty of takers - empirical evidence would suggest that more shoppers have loyalty cards than don’t.

There have been other issues; for example, loyalty cards came under fire from David Blunkett in 2004 in a fairly obvious attempt to draw away attention away from the problems surrounding the ID card debate:

Mr Blunkett said the cards produced key details about people’s shopping habits but were accepted because they were run by private firms. People should not distrust ID cards because they are a state idea, he said.

…

Holding up a Nectar card, he said people voluntarily signed up to allow such details to be collected through such loyalty cards by private firms. “There is a real issue about how that should be overseen and supervised,” said Mr Blunkett.

Mr. Blunkett presumably ignored the fact that voluntarily signing up to handing over data about tomato-buying preferences was a more respectable practice than being forced to hand over more medical information to travel. Fortunately, his illiberal idea didn’t seem to gain much traction. In all fairness, though, it’s quite likely than many folks don’t know that their data is used in this way; for that, The Guardian deserves some praise for educating the public.

Maybe reward cards will die out eventually. It’s hard to back that up with public data, although I’m sure Tesco have a hard time quantifying the exact benefit they get from theirs (how do you measure repeat custom accurately - with and without the card?). If I’m right, though, I hope they die because they don’t make business sense - not because the government regulates a harmless practice out of existence. Interestingly, Wikipedia alleges that this has already happened in California.

It’ll be interesting to see where the reward industry is in five years time.

I travelled just enough last year (although mostly not on business) to start analysing air travel, as some of my colleagues have done for a while.

And so I’m afraid this post is another whinge about airports. Why o why do they ever put interesting stuff (i.e., shops) before security control? OK, sure, some relatives come to see people off, so a coffee shop or two might not go amiss in larger terminals. But apart from that, why bother? Doesn’t every rational person proceed through security control as soon as they’ve checked in - and don’t they check in as soon as they’ve entered the airport?

I’m sure my mind is missing an airport use case.

This year has clearly been the year of YouTube, Google Video and other pretenders to the throne. And as I’ve discussed before, I think Flash-based video is really cool.

However, not everything it’s used for involves cats falling off trees as per You’ve Been Framed, or actors fooling people. One of the best uses has been the huge amount of compelling video that’s been released free from conferences this year. I’ve absorbed tens of hours of it this year, on subjects as diverse as life coaching from legend Tony Robbins (Alexander Kjerulf has been to one of his seminars, and I want to go too), the marketing of spaghetti sauce, and curing aging. ‘Catch-all’ conferences such as Gel, TED, and LIFT have all got in on the act. This, of course, is an alternative to physically travelling, and will surely produce more super-star conferences that attract bigger names, bigger audiences, and grow in stature.

I’d love this video-based content to be one more nail in the coffin of the box in the corner. TV still seems to hold an now-unworthy position, primarily because of the culture of FUD around copyright that scares studios away from the network and causes them to avoid doing anything more adventurous than releasing restriction-encumbered shiny discs. I don’t think this can last, though; despite the nonsense that’s spoken about the ‘ethics’ of ‘owning’ content by those think they’ve bought more than a license, as Cory Doctorow rightly points out, DRM is fundamentally a broken business model. Whichever way the details of the market go, I’m sure we’ll eventually be able to chalk up another win for the long tail. I certainly hope so.

I’ve written several times before about LOVEFiLM and their deteriorating customer service. They’ve just got worse - sometime during or after the merger with Screenselect, it seems that they sneaked in a change - you can now only ‘go on holiday’ (pause the service) for a maximum of 4 weeks a year, and only 2 weeks at a time (with a holiday size measured in units of 1 week). No doubt this is within the T&Cs, but this clearly isn’t going to suit lots of people (myself included), and is just another ill-considered attempt to shave costs (maintaining your account details is essentially zero cost). The only thing that’s keeping me clinging on to LOVEFiLM is their range (the delivery times aren’t getting any better), so I suspect I’ll be ditching them soon. Unless of course they feel like improving? Guys? Hello?

PlusNet, who also failed on the customer service front a while ago when they failed to fix my broadband for almost two weeks, have just published some fairly detailed statistics on their claimed improvement in problem turnaround time. Whether they are true is difficult to say, but it’s certainly interesting to see them being so open for once.

Update 2006-12-23: Some people still don’t like PlusNet much though.

Correction 2007-01-05: You can suspend your account for longer than two weeks, but LOVEFiLM charge £1/week for this - plain cheek, since the cost to them is obviously next to nothing.

Some of the marketing efforts I’m most impressed by are the little, obvious things. I recently ordered some replacement ink cartridges from The Ink Factory (excellent service, by the way - next day delivery and cheap prices, as well as good quality non-OEM cartridges). I’ve ordered from them twice now - this time round I had to dig out their name from my email archives - searching Google for printer ink uk brings up a lot of sites. They’ve now sent me some tiny stickers, with their website and phone number printed on them, one of which has now gone on the inside of my printer hood. Next time, I won’t have to do that hunt. So obvious, so simple, so clever.

Of course, I barely use my printer these days, but that’s another story.

Update 2006-11-30: It appears Epson is trying to pursue some manufacturers and importers of cheap ink cartridges via the US legal system, alleging patent violation. It’s well known that printer manufacturers make a large portion of their profit from cartridges, so this shouldn’t be too surprising. I’m not sure I have a clear opinion on this issue.

A sign in the Winchester branch states that WHSmith have joined the list of retailers who have stopped accepting cheques - Shell made headlines when they announced they were to do the same back in September last year. Apparently WHSmith are concerned about fraud, and this news story implies that it’s only an experiment, but it wouldn’t surprise me if part of the decision is also related to the cost of processing and handling, and that this will become permanent - after all, it’s rare that you see a cheque being used in a shop now, and with good reason - they are tedious, awkward, and slow to process.

To my mind, WHSmith have a bigger problem, though - they are getting boring and desperate. My stationery purchase was accompanied by two exhortations to buy other, totally unrelated, products. As Seth Godin has explained at length, this kind of marketing out of context just doesn’t cut it any more - and it annoyed me. I’m not really clear any more what it is that WHSmith sell, but I rarely go there - certainly high street branches - to buy anything, and this kind of behaviour doesn’t endear me to them. As their product set begins to die out (CDs are dying, DVDs will, papers and magazines will, books will, stationery will), it becomes hard to see what areas that can invest in.

Do WHSmith have a strategy for the future?

Google have created a powerful brand based on creating simplicity from complexity (what all good IT is about). Their tools aren’t perfect, but they’ve made life easier for billions, and so I think they still deserve some free feedback from time-to-time. So, a few thoughts:

• Mr. Google, please develop a podcast search engine. So much interesting content is now being released as podcasts (quick plug for my favourite: EconTalk), that it would be useful to be able to search them. All you have to do is invent a speech-to-text interpreter that actually works reliably. Simple. [Note: as I sometimes do, I wrote this post in advance of it being published. I've since discovered that such a tool already exists. However, I thought I'd leave the original prose here: Google, if you get one out soon, you could still corner the market]
• Mr. Google, please stop developing so many interfaces - and plug them all together. If I want to do an exhaustive search for something, I now have to search Google Web, Google Images, Google Groups, Google News, Google Video, Google Blog Search, Google Book Search, Google Scholar, and possibly others. This is not a good thing - you’re straying from the simple search you started with. Some of those searches do show up in the main search results, but you could do a better job of tying them together to show what I’m actually looking for. This could be a real competitive edge, especially since the basic searches that MSN and others provide are now actually quite reasonable.

Google still have an edge in providing what people want - for a company so technically-focused, they either have talented marketers or are just lucky. Please, Google, keep it up.

On a trip to London the other week, I was wearing a nice pinstripe suit. With my neatly ironed shirt, conservative tie, and smart cufflinks, I thought I looked very presentable. But as I’ve already admitted, I also bought some pomegranate juice. What was I thinking? Sure, it was OK, but what a yuppie.

So here’s a question: does how you’re dressed and what you’re doing affect what you buy? Do you feel compelled to buy more expensive stuff because you look like you should be able to afford it? Do you allow yourself to buy budget baked beans when you’re sloping down to the shops in a scruffy t-shirt on Sunday morning? Or are you unaffected by such self-imposed peer pressure?

(Spot the deliberate oxymoron).