The manoeuvering of free choice

Nudge, a book by Thaler and Sunstein was a hit when first published in 2008, despite some criticism from people who described it as dull. Its theme is that people can be nudged into making the right decision when attempts at persuasion, compulsion or other forms of pressure might fail.

David Cameron was converted to this notion and created a “NUDGE “ team of strategists charged with changing public behaviour without them noticing.

Their latest finding is that legacy income attracted by charities could double if people were reminded of making a charitable bequest when drawing up a will. Most charities actually do so anyway, and the reason legacy income has fallen may have more to do with concerns about future income, drop in savings rates, fear about the cost of long term care and the need to provide help to children and grandchildren onto their first steps up the housing ladder.

Nudge is not a new concept.  Edward De Bono called his theory: Lateral thinking. Indeed its origins go much further back. Kemal Ataturk, the founder of modern Turkey wanted his country to look westwards. He believed that the covering up of women’s faces by the traditional veil was wrong, so tried initially to ban its use. The clergy objected. Ataturk then decreed that all women of ill repute would be compelled by law to cover up their faces. Overnight respectable women abandoned the veil.

Back to charities. The ones that continue to attract donations and legacies are the ones that have a high level of spontaneous awareness, are known for the essential role they play and the public’s belief that this charity makes a difference. Cancer research and the British Heart foundation do well with legacy bequests because everyone knows someone who has died from one of these dread diseases. They also have a large base of supporters. According to the Target Group Index, Cancer research has 15 million supporters.

It follows that this generates a large mailing list, so they have plenty of opportunities to ask donors to remember them when it comes to making a will. Charities spend 65% of their advertising budget on direct mail.

But what can the smaller, less well-known charities do?

The answer is to get known, for the cause and your contribution to alleviating the situation. Advertising investment by charities in 2012 was nearly £ 400 million. Find some rich trustee to provide the money. Raid your reserves. Hold events. Ask advertising experts to help. Develop a clear objective that can be evaluated. If it is to raise money, ask yourself if this is compatible with building positive awareness and creating a larger donor base.

Two charities that attract legacies are The RNLI and the Guide Dogs for the Blind. Research I have seen suggests that potential donors are giving money for the brave life boat men rather than the hapless sailors in trouble and for the beautiful dogs rather than the blind person. It is important to understand what the emotional triggers are.

More than that, find someone to advise you. Someone who cares.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Getting it right for Charities

"When markets are in decline, the only way for a Company or Brand to maintain sales is to steal market share from its competitors."

This applies to Charities as well. They too have to operate on business principles even though their purpose is altruistic. And charities have been badly affected by our economic doldrums.

Some organisations have seen their income fall by 20%. This is true from both the individual private donor and Government sources.

The general public has concerns on the impact of the stagnant economy on their future finances. The elderly now feel the impact of inflation on the returns on their savings and on their pensions. Many now feel the need to help children and grand-children onto the housing ladder. Some may also be fearful about the rising cost of care. Many feel "compassion fatigue ".

When they do give, a re-prioritisation of causes takes place. The repertoire of charities that used to be supported are reduced. Most health charities will continue to feature in the list, with the possible exception of mental health causes and aid charities. Third world charities may move off the burner and service aid organisations could find their support dwindling as returning troops and fewer headlines reinforce the view that this is a job for the Government. 

And Government cuts will not just affect those charities who used to benefit from their largesse. These organisations will seek to make up their losses from private donors and their problems have already been listed.

Advertising investment is now even more important. In 2012, £371 million was spent in the UK promoting charities. Two-thirds of this sum was defensively spent on direct mail with the emphasis on appeals to existing supporters.

According to the Charities Aid Foundation, the causes  that continue to attract donors, other than disaster relief, do so because they have a good reputation, are believed to be likely to have an impact in this area and enjoy high levels of positive awareness.

The lessons are: Think clearly about your objectives and distinguish between business and communication objectives. Understand how best to integrate the need for building positive awareness and attracting regular donors. Invest in good creative work. Drayton Bird  quotes Sr Silva, the current President of Brazil: "The pocket is the most sensitive part of the human body, so we must touch the heart and the mind first."

Macmillan nurses manage their advertising investment better than any other charity. Other institutions could learn from them.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Travel trends in and from the UK in 2012

Last year was an atypical year in the United Kingdom. Concerns about the economy, the crisis in Europe and the violence that started with the jasmine revolution in Arab countries were put aside by the celebrations for the Queens diamond jubilee in June and the hosting of the Olympic games between July and September.

It should have heralded a boom in tourist visitors to Great Britain.

Visitors from abroad did rise, but only by 0.9% in 2012. And rather surprisingly actually fell in the third quarter when the games were held, by 4.2%. All the expectation of a huge influx of tourists was proved optimistic. The crowds in the streets and in the tube never materialised to the chagrin of hotel managers and greedy games ticket sales people.

Visits abroad by UK residents were  down by a marginal 0.5%, so tourist visits abroad at 56.5 million are still depressed from the heady days of 2008 when 69.0 million visits were recorded. A decline of 18% is very serious but relatively speaking, not as bad as visits to North America, which dived by nearly 27%.

Countries heavily dependent on tourism revenue are handicapped by their Governments austerity measures but still need to do something.

The Irish republic lost 28% of UK visitors since 2008. For 2013 its advertising campaign invites people of Irish descent to attend ‘the year of the gathering’. A tactic that could be adopted by India where 28 % of UK resident visitors already have Indian passports. Many million British passport holders are of Indian descent. Jamaica has a similar opportunity. 39% of visitors from the UK in 2012 were visiting friends and relations.

Some countries benefit from historical ties with Great Britain, and distance by encouraging visitors to stay longer in culturally familiar surroundings. Average length of stay in Australia and New Zealand is 36 nights.

And then there is advertising.

Tunisia, which showed an actual increase in visitors from 353,000 in 2008 to 388,000 in 2012 talks loudly with an increased advertising spend of  ‘There’s more to celebrate’.

Countries where tourists still feel unsafe include Egypt with a fall of 39% since 2008, appear dazed.

For concerned tourist boards, make sure tourist have easier access to your country, exploit your cultural and geographic assets, create stronger ties with tour operators and tell prospects why this year is the time to enjoy the unique advantages of your dream destination.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Coping with congestion at London’s airports.

Travel chaos is to be expected in a British winter and particularly so at airports.

Heathrow however managed a modest growth of 0.3% in passengers during January and estimate that would have been bettered to 1.7% had it not been for the disruption caused by snow. Still a total of 5.2 million travelers is good and on line to meet its target of 71 million for the year. Gatwick despite wheeling out their new snowploughs suffered a passenger drop of 0.8% in January but will easily reach a yearly total of 35 million. Stansted copes with half of Gatwick’s passenger, so together with the two other airports that serves London, Luton and London city, these airports serve about 132 million passengers a year.

The view is that there is a pressing need for more capacity.

Mayor Boris Johnson favours the building of a new modern airport on the Thames estuary at a cost of billions. The alternatives are to build a third runway at Heathrow, expand the facilities at Stansted and Luton and progress the expansion of Southend airport.   

But there are alternatives to building what might become huge and costly white elephants.  

The trend towards the use of larger aircraft will increase. Better airline promotion has filled more seats, but a 70% sold seat capacity suggests that they can do much better. See how well Emirates promote their services.  

Our Government appears to under rate the importance of tourism to our economy except as a taxation cow. The industry has created nearly two million jobs and contributes 4% of GDP. Britain is still very popular as a tourism destination.

We can all do much better.

Contact me at: daz@bbvs.co.uk 
(Your name will not be passed on to anyone)

Reviving the tourism market

There is evidence that the dramatic drop in tourism since 2008 has plateaued. We are still however bumping along at the bottom.

The long recession hasn’t helped of course, but people can get tired of feeling poor, particularly when they haven’t felt any real hardship themselves. Asset rich folks can be persuaded that the meagre returns on their savings justify spending on indulgences.

One element holding back the long haul tourism business is the much-hated Airline passenger duty.

Now the four leading airlines in the British Isles have published a report by Price Waterhouse, which calls for scrapping this ‘green’ tax. Using a model favoured by the World bank it examines the impact of one such element can impact on other sectors of the economy.

PWC claim that scrapping APD will stimulate the economy, create up to 60,000 extra jobs, encourage in-bound tourism and reduce business costs. Moreover the income lost will be made up by extra revenue from income tax and Vat. 

This APD tax has not been as lucrative as the Chancellor had hoped. The ‘Laffer’ effect works here as well. However George Osborne may take comfort in the fact that the fewer Brits who go abroad aids the tourism deficit. We earn less from in- bound tourism than we spend abroad.

And our new Visa rules make it more difficult to attract the new middle classes from China and India. We couldn’t even persuade more tourists to visit during the Olympics, though this may have been a marketing blunder.

We must create conditions to kick-start our tourism business. This means greater capacity at our airports and a better understanding of the benefits tourism deliver to the economy.

Would you defer this holiday?

People often make irrational decisions about spending money. They are however more careful when deciding on their major holiday.

This can be the most expensive purchase made in the year, so prospects decide on the type of holiday, draw up a list, and choose a destination that is highly desirable within their price range and distance. Provided it is accessible and safe.

The destination that offers unique qualities such as stunning landscapes and wildlife, will be preferred to countries that are ubiquitous. France or Italy rather than Greece if you are interested in fine dining and culture.

However there is a third dimension in this decision taking.

You’ve cut the orange, first on the basis of desirability and then again on uniqueness. The quarter you are left with includes destinations that meet your criteria.

The third factor is deferability.

Canada and New Zealand are wonderful countries for British tourists. However their political stability and friendliness of locals is not going to change in the short term. This makes it less of an urgent decision, unlike the possibility of a holiday in Cuba. Will it retain its old world faded charm after Castro, particularly if the USA decides to re-engage?

What can you do if you wish to generate an artificial sense of urgency?

Create events and festivals as Germany does. The Oktoberfest in Munich is just one of the many incentives to visit.     

The power of word of mouth

Bobby Ghosh writing in a recent issue of Time described a country so:

“This is the last authentic place on earth. Authenticity is a rare and valuable commodity and people will travel far to find it”. Mr Ghosh uses the word to mean real and genuine in a positive sense. He goes on to say “It’s the closest thing to Shangri-La I’ve ever seen”. For readers unfamiliar with James Hilton’s classic novel, Shangri-La was a beautiful land in the Himalayas where good gentle people lived long happy lives untouched by so called civilization.

He is describing Bhutan, a country sandwiched between China and India with a population of 700,000 with their own version of Buddhism and a democracy with two distinct differences in their belief in what constitutes progress in the 21st century.

Bhutan has an alternative to the western gauge of the Gross Domestic Product. Their version is the Gross National Happiness index based on what they describe as “The four pillars”. These are sustainable economic development, conservation of the environment, preservation of culture and good governance. 

The nine components of happiness are psychological well-being, health, work-life balance, education, good governance, cultural diversity and resilience, community vitality, ecological diversity and resilience, and finally living standards.  

Unlike many western democracies, Bhutan’s government will not abandon everything in pursuit of growth and know that wealth alone does not guarantee happiness.

The Government has also decided what sort of tourist they would welcome. Not the hippies on the trail of cheap marijuana that damaged Goa and Nepal. Bhutan wants the rich visitor interested in the beauty of the preserved countryside, it’s culture and religion. Birdwatchers, and adventure seekers are also welcome. These folk pay a daily tariff to limit the number of tourists and help with the maintenance of authentic Shangri-La.

Go before they change their mind.