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Wednesday
Apr272011

Inertia Marketing....

Do you have an inherent trust in big brands? I tend to, and I suggest that this will also apply to a lot of my contemporary fuddy-duddies. We miss, and revere, the old General Post Office. The people who used to give us a daily postal service that worked. Did you know that the GPO was established in 1660 by the chap that was to go on to become Nell Gwynne’s boyfriend? No, I didn’t either. It functioned pretty well for 309 years, then in 1969 it was downgraded from a government department, with a Royal Charter and a Postmaster General, to something called a Statutory Corporation. Then, in 1981, the telephone side of the business was snapped off, like an overhanging branch, and British Telecommunications was born. In 1984, BT was privatised. An interesting word, ‘privatised’. What it means is that something we already owned was fattened up, rebranded and repackaged, and then sold back to, erm, us. Not even all of us, just those of us that were prepared to cough up hard cash to pay for the rather aptly named ‘shares’. It doesn’t end there of course. The rather effective Girobank, developed by the Post Office, was sold to Alliance & Leicester in 1990. In 2007, the government published The Dissolution of the Post Office Order where its status as a statutory corporation was abolished. Consequently, you can expect to see it appear on rightmove.co.uk, at a knockdown price, any day now. Well, any day now, as in when the government have managed to silence the outraged old fuddy-duddies, like me.

The reason that us fuddy-duddies are annoyed, is that we believe in two completely outmoded principles. Get ready to laugh. These principles can be labelled as ‘service’ and ‘loyalty’. Many years ago, when seeking goods and services, there were three factors to be considered. Price has always been important, but it was also considered in conjunction with quality, and trust in the expertise and of the vendor. You would be given, good, honest advice, that you could trust, and you would make your decision accordingly. You knew what you were getting, and in general, that is what you got. You became a ‘customer’ and there developed a relationship between you whereby the vendor offered a trusted service, and you rewarded this with your loyalty. You continued to buy goods and services from that vendor. This would eventually be called ‘inertia’ marketing, but unfortunately, in the integrity laden 21st century, the whole system has collapsed into a dash for cash. A ‘loyal’ customer is now a customer to be milked, and exploited.

Two years ago, I bought a (slightly) sporty car. Obviously, I understood that this low slung job would not be cheap to insure - despite my considerable (touch Sherwood Forest) no claims discount. I shopped around, and eventually agreed a price of around £600 for a fully comprehensive policy. At the end of the first year, the renewal came in at around £750. Clever, a 25% increase, but couched at a level where there was only a 50:50 chance of my bothering to find another insurer. Inertia Marketing. Like an idiot, I paid up. A year later, emboldened even further, the insurance company quoted a massive £970. Despite a further two years no claims, and the car being two years older. Ironic, that the insurance company was branded as ‘Virgin’. This went way beyond taking the p*ss, this was pure commercial rape. Inertia marketing at its very worst. An hour’s research on the internet managed to find another company prepared to restore the original £600 figure, but for a far better package. If I had been prepared to take a basic comprehensive package, I could have been insured for £470, a cool £500 less than ‘my’ insurer had quoted.

Because I am an old fuddy-duddy, I get caught all the time. I still, despite all evidence to the contrary, cling to the concept that I will get ‘service’ from my suppliers, in return for my ‘loyalty’. I took an expensive, two year contract out on a mobile phone. Did they advise me at the end of the two years? Did they recognise that I had fulfilled my side of the bargain? Did they offer me the new, no-obligation, tariff to which I was entitled? No, no, and no! They just carried on charging the same rate in the hopes that I wouldn’t notice. Inertia marketing, delivering the super-icing on top of an already rich cake.

A few years ago, I took out the GPO – sorry BT, all singing and dancing phone and broadband package. It costs me around £50 a month, and I get virtually no change every time the bill comes in. A quick search on the internet reveals that these slippery suppliers now do a similar deal for less than half that amount. Have they told me, their loyal customer, that I could have the same, or better, service for half the price? Of course they haven’t, they just take my money, and laugh. Inertia, or loyalty, marketing in the 21st century. Devious, and morally dishonest.

I daren’t even look at my house insurance. Or my gas or electric bills. Or my satellite tv costs. Or any of the other standing orders that seem to have crept onto my bank account. But that is not the point. After all, despite being an old fuddy-duddy, I still retain most of my faculties, and I am capable of abandoning my devalued principles of loyalty. Not so, importantly, for the infirm, or for those who have failed to keep up with the heady pace of the internet No matter how distasteful for me, I should, and will, play them all at their own game. I will spend hours a week on moneysavingexpert.com, and I will be continually chopping and changing my suppliers with every price fluctuation. The inertia marketeers have reaped what they sow and it is ironic that they now fund, via commissions, the plethora of price comparison websites on the internet.

But we should all recognise that the whole anarchic system that has evolved, with suppliers and consumers waving ‘V’ signs at each other, and muttering ‘f*ck-you’ under their breath, is deeply unhealthy. Is it no longer possible for a supplier to make sufficient profits on the basis of transparency, and trustworthiness? Would it cost us any more than we end up paying our current crop of underhand suppliers? Would anyone else like to have a world-class, rock-solid, postal system again? And banks? And utility suppliers? You can put me down for all of them.