Invisible Brand

When it comes to developing new products, financial services could learn a lot from car designers, says CCHM:Ping joint MD, Paul Gordon

When I used to work on car advertising, back in the days of the Model T Ford, the serious engineers in the car companies concentrated on the bits you couldn’t see. They spent whole careers working on modest improvements to the Panhard rod and the MacPherson Strut and the inlet valve geometry.

To them, it was a source of mystification and fury that consumers paid absolutely no attention to the results of their labours in their decision-making processes. Instead, consumers were far more interested in trivialities like the visual appearance of the car, the design of the interior and – worst of all, for goodness sake – the colour.

The car companies’ bosses did their best to smooth their boffins’ ruffled feathers. They knew that in the long run, the quality of the engineering did matter – brands that stood for excellent engineering, (like Mercedes and BMW) would be ranked far more highly than brands that stood for shoddiness and tat (like, at the time, Fiat and Talbot). And the price you had to pay to maintain this engineering excellence was a payroll packed with arsey boffins pratting about endlessly with MacPherson Strut design and sneering at stupid consumers making choices on the basis of seat coverings and cupholders.

But the car companies’ bosses also knew that the seat coverings, the cupholders, the new range of metallic paint finishes, the rather clever retractable aerial and a whole host of other cosmetic features mattered at least as much, if not more so. And despite the harrumphings of the suspension designers, the companies’ payrolls were fairly packed with cosmetic features specialists too.

Boring old specifications
This seems to me to be a realisation which very few financial services providers have yet made. When it comes to product development, the boffins in the jackets with the leather elbow patches are still firmly in the driving seat, so to speak. There are still few, if any, specialists in paintwork or cupholders. And in their absence, the boffins routinely decide that olive green and mud brown are perfectly satisfactory colours, and that there’s no point in wasting money on cupholders when the inlet valve geometry still hasn’t been optimised.

As a result – with few exceptions – financial products have fantastically boring and limited specifications. They may be strong on the features that stimulate boffins, but they’re pitifully weak
on features that titillate consumers. And because no-one’s judging the product design except boffins, their limitations are scarcely even noticed.

Take boring old investment funds. What could the seat cover and cupholder brigade do with them?

Well, for a start, there’s the whole enormous area of needs-based investment which, despite the odd pioneer like our own investment plan for children and grand-children, Jump, based on the Witan Investment Trust, still remains as unexplored as the Antarctic. There are plenty of other big needs which could provide the basis for packaged fund propositions. As far as I know, for example, there isn’t a single fund designed and promoted for the purpose of self-insurance in healthcare, coming packaged for example with an annual health screening, a care management service for when problems arise and perhaps some level of built-in life and critical illness insurance.

Speaking as someone who has just spent a truly startling amount of money on what’s laughingly described as a ‘routine’ service for my car, I wonder whether there could be a fund which I could use as the cornerstone of my car running costs. I make a lump sum investment, and I use the money to pay my servicing, my insurance, my road tax, even my AA membership. If I’m very lucky I can meet these costs from the growth on the investment, but that’s not my expectation. I expect that the money will gradually erode – but assuming I get some income and even some capital growth, I’m still spending less than on pure pay-as-you-go. And to sweeten the pill still further, maybe the provider could do some deals with Kwik-Fit and the AA.

Great expectations
But this all sounds a bit complicated. What about something a bit more enjoyable? How about a range of geographically-focused funds where you get a flight to the investment region in question once every year, or couple of years, to check up on the investment climate? How about – here’s an idea to frighten the boffins – a fund with style, maybe even using a brand like Armani, Madonna or Wallpaper (the magazine, not the product)?

That’s enough about funds. What about pensions? We pitched to a big High Street bancassurer a few years ago for the launch of their new personal pension. Our main thrust, if you’ll forgive the expression, was that saving in a personal pension is a lonely business and one of the very, very few things you can do in life where you don’t really have any sense of how what you’re doing compares to what everyone else is doing. As a result, we proposed that the bank should continuously collect data and information from everyone who bought the product, and report back once or twice a year with interesting and involving communications – maybe a booklet, maybe a CD, maybe a website – painting a picture of what your fellow-investors are doing. Are they saving more, or less than you? Are they saving in the same funds? What else are they doing to plan for retirement? What do they look like? How do they sound? 

I’d have thought that even if the bank didn’t really understand the emotional engagement that you could build in this way, it would understand the cross-sell opportunities (“Did you realise you’re investing under half the average contribution for a man of your age?”). But in fact they stared at us with a look of blank incomprehension and gave the business to an agency which did an idea about tailor-made solutions.

And then, finally, financial advice – well, where do you start? I have never in all my life received an interesting or involving communication from a financial adviser with whom I have a relationship. (I have once received an interesting and involving communication from a financial adviser with whom I don’t have a relationship, but that’s another story.) 

Dodgy advice
A few years ago I was very pleased to receive a very simple, user-friendly CD through the post allowing me to generate a personalised calculation to find out whether it was still tax-efficient for me to have a company car. Excellent. Just the sort of relevant, timely, value-adding initiative I would expect from a good financial adviser.

Except that it wasn’t from a financial adviser. It was from a car company. BMW, in fact.

Which takes us neatly full circle. BMW do appreciate, more than most, the real importance
of serious engineering. They employ thousands of pointy-headed people with very scary engineering qualifications. But they also appreciate that all too often, it’s the extras which the engineers think of as gimmickry and flim-flam that makes the difference to the customers.

The next time you slip your grande skinny latte into that carefully-positioned cupholder, remember that.