THE PRICE OF THE PANDEMIC

Plenty of economists are concerned about the possibilities of inflation. Generation Y and Z won’t remember what it was like when we had 27% inflation back in 1978. I also remember 1992’s Black Wednesday when interest rates went from 10% to 15% on a single day as we crashed out of the ERM. That meant someone with a mortgage of a ‘can-we-afford-it-hmmm-only-by-skin-of-our-teeth £300,000’ was overnight facing annual increases in payments of around £15,000 or more. 

Inflation favours those brave in pricing their goods or have goods or services that are price insensitive like fuel, pharmaceuticals (or ironically taxes.) Inflation favours the wealthier elderly with savings growing in value as interest compounds. It also favours certain entrepreneurs who in crises like the pandemic or war always thrive. No surprise then that a record number of billionaires have been created in the past twelve months.

Another price to be paid for in the past year of restrictions and lockdowns is that our senses have become dulled. Like our sense of touch. No hugging or kissing – I hadn’t realised how sad that was going to be. And now we’ve forgotten how to or are too embarrassed to do it. 

Our sense of hearing. It’s Brighton Festival and we’ve been to a couple of performances – Paul Lewis, the fantastic classical pianist and the Chineke Ensemble, all brilliant,  instinctive musicians.  But wearing an ever-dampening, fogging-up mask dulls your appreciation of music.

A solution: drink two large brandies before the show and enjoy inhaling your own breath. It doesn’t help the music but it helps keep you jolly.

Being jolly? Our sense of fun has withered. Yes. I confess. I used to be flippant and even occasionally amusing. The price of the past year has been to make me feel dull and cautious. And as I look around I see people desperately trying to revive lost lives thinking “let’s party.”  How? The party I’m afraid is over for most of us now. But maybe that’s OK – after all who really needs a party?

Who needs to work? The whole furlough business, Zoom and working from home has created a new, odd attitude to work. People have been paid to do nothing or work from home performing only to a TV screen. The price we’ll pay for that isn’t clear but corralling people back into offices as many companies want will be resisted strongly by a lot of people.

Yet there is a brighter side. In the Sunday Times Alyson Rudd describes the 2020-21 football season as “weird but strangely wonderful”. That captures the story of the whole Covid event. Somehow people have managed to be astonishingly tolerant, patient and obedient whilst in Holland and Italy there have been examples of civil unrest and violence.

The upside of the pandemic is that it has thoroughly shaken things up and forced us to appraise what we really want from our lives. We’re seldom forced like this to reflect on priorities. How important is a holiday in the sun? Do we get real fulfilment from our work ? Are we stuck in a loveless relationship? How many friends do we have? Are we still  learning?

The price of this shake-up’s good news. Because most of us will end up happier in our work, relationships and lives. If a job or marriage can survive and thrive in  2020 and 2021 it must be OK. 

Weird? No. Strangely wonderful and strong.

Footnote: read Solzhenitsyn’s  “A Day in the Life of Ivan Denisovich”. If you think the lockdown’s bad see how to stay cheerful in much worse. 

CH-CH-CH-CHANGES, TURN AND FACE THE STRANGE

Throughout my career I met people who said they loved change, simply thrived on it. They were, they claimed, a manic gleam in their eyes, change-agents. They were only interested in the future. “History is bunk” they said quoting Henry Ford. And I humoured them because a change, here and there, is the essence of progress. As it says in my recently published book on marketing - “Brilliant Marketing - 3rd Edition” - it’s “new and improved” - in other words changed.

But this year change seems too small a word. I’ve been arguing for some time that we’re living through a quiet revolution. After the US election and Brexit it’s not so quiet. And just wait as suppliers and retailers in the UK grapple with forthcoming inflation and a sales slowdown. More revolution’s imminent.

I say “forthcoming” but who can tell?  Our radar systems have all gone down. Research has become discredited. A senior fmcg executive recently said “we’ve more than halved our research budget. It wasn’t telling us anything we had any faith in”.

(Until November 9th  - David!)

This is the age of the contrarian, the thinker of the impossible. When the Saatchi brothers said in a Lewis Carroll moment “anything is possible” they were, at the time, guilty of hyperbole but, considered today, they were merely ahead of their time. In this uncertain world those apostles of change I described should be feeling delighted. But I bet they aren’t. We know that the most stressful moments of our lives - moving house, changing jobs and divorce - all involve real change, reappraisal and the need for difficult decisions.

Increasingly it feels as though we’re living with Alice in Wonderland where “If you don't know where you are going any road can take you there.”  Certainly that seems to describe our Prime Minister whose pose of confidence doesn’t conceal that she must be missing the Home Office where she was mistress of all she surveyed with no ghastly surprises coming at her from every direction.

Post-Truth has been named word (sic) of the year by the Oxford English Dictionary. It will, I think, be overtaken by “Post-Strategic” because arguably strategy has been replaced by tactical nimbleness, by the ability to change direction and avoid the unexpected. Diplomacy has been replaced by deal-making and poker (at least that’s how some Minsters describe the negotiations with the EU (“keeping our cards face down and close to our chest.”)

Perhaps the biggest surprises will be for two people discovering that running a turbulent country is neither the same as running a business empire nor heading a government department.

So it’s time to turn and face the strange…and the totally unexpected.

You’d better be ready. So here’s some advice….

Medical research (if you believe it) shows that snoozing before an exam is more efficacious than last minute cramming. So I recommend a lot more snoozing for all of us. We need to be prepared… for anything.

CALL THIS SPRING MATE?

There really doesn’t seem much to be cheerful about.

We’ve got a broken economy - stagnation, inflation, deflation. Our best politicians are emigrating. The bully EU has smashed the smallest kid in the playground - little Jimmy Cyprus. It’s never been harder to make a sale. Everyone‘s looking gloomy, grumpy or sad. And the weather is awful…the weather forecasters now even start their spiel each night with an apology.

This weather seems like a metaphor for global health - cold, bleak, depressing and unending.

But I wanted to wish you a very happy Easter and say it won’t be like this forever.

This picture shows you what you have to look forward to in April and May. The season when shafts of sunlight cut through just burgeoning leaves on the trees and all around there are amazingly vibrant colours.

But nothing quite beats the carpets of bluebells and their eye watering blue. And as I look at them I think of growth. Growth – remember that?

I hope you feel a bit better now.

Have a great, positive break.

Richard Hall                                                                                                                                                                      

THE HELICOPTER WORLD OF MONETISATION

The occasion: The London Business School Summit on Technology and Media 25/02/11
The speaker: Dr. Bobby Rao, ex Vodafone Marketing Director, now founding partner in Hermes Venture Partners.

We’ve all had that moment. One of sheer unbridled hatred of the cleverest boy in the school. Who gets all the prizes; who gets all the girls. That’s Bobby. The coolest and most suave presenter I’ve seen.

1. We are living in the midst of a game where we are all asking “where’s the ball?” Because there’s been a collision of three markets: the internet; media; consumer electronics - between them worth $3 trillion.  And the legs of each has been kicked away.
   
2. Historically media has thrived on scarcity – now through digitisation, high speed Broadband and the low price of storage, scarcity is over.
   
3. You can fight scarcity by focusing on live events. Or you can go for quality (iPad and iPhone). Or you can monetise the new usage occasions there are.
   
4. But recognise this is a new personal market meaning advertisers must really understand individual people. So who has got the best information? That’s why Facebook is valued at c. $70 billion.
   
5. Yes that’s what Bobby used to see what was going on in Egypt via live video in Tahrir Square as it happened. BBC didn’t have a chance against what they now call “pro-sumers” (producers and consumers.)
   
6. To monetise all this  we must charge people in the right way and the right amount. It’s not about how many eyeballs any more it’s about whose eyeballs and what’s going on behind those eyeballs.
   
7. Yet marketers - an “avoid-failure”, in-transit-between-jobs bunch - are conservative and lagging behind the changes that have happened already.
   
8. And of course we are living in the middle of a valuation bubble (what was later described by James Bromley CEO of Mail Online as descending from the “peak of inflated expectation” phase into the “trough of disillusionment”).
   
9. But be aware that this $3 billion game will not be played on the small market Euro stage (let alone the tiny market UK stage.) It’ll be played out between Asia and the USA.
   
10. It’s about customer knowledge, customer experience and a scale of population big enough to pay for the weaponry the big guys need. It’s a good time to be a customer and a spectator watching them - Apple, Amazon, Google, Microsoft, Samsung, Omnicom and WPP. But remember - no one knows where the ball is yet.

Thank you LBS.

I’m off to look for that ball.