Archive for August, 2012

How long will Virgin’s PR window remain open on the West Coast?

Kudos to Richard Branson. His crusade to repeal the decision to award the West Coast Main Line to someone else shows no signs of slowing down. However, are the tables starting to turn? The FT reported yesterday on the large financial incentive for Branson to keep the rail contract in the Virgin stable – the line generates far higher revenues and margins than other lines in Britain, in part because of geography (it goes through the North West) but also because Virgin benefitted from the huge upgrade it got during the noughties.

To date Branson has based his campaign just like any other using the Virgin brand and its values – it’s the slightly alternative, anti-establishment brand run by that eternally young blonde haired guy who occasionally jumps off buildings – he’s the best of British and he tries to offer you a great experience on Virgin. People love the brand, even if the trains themselves are average at best in the eyes of some (for my sins I have a strange attraction to Virgin planes over others so the ‘brand thing’ clearly does work).

The problem is, the West Coast dispute is now in its third week. Initial sympathy and that feeling of “oh but Virgin are always good, we should keep them” from consumers will begin to peter out, especially as other events capture their attention again. The deeper look at the financial value of the line won’t help either – the more this becomes about bottom line and the less it’s about the Virgin brand, the better it looks for First Group.

If that wasn’t enough of a problem, the final blow for Branson would be if his pursuit of this issue starts to affect the quality of the service itself. Any perceived detorioration in the service, either now or as Virgin winds up its tenure later this year will likely be the final nail in the coffin. Consumers will tolerate a protest from Virgin, but not at the expense of a comfortable, on-time train ride.

So Branson continues to stay in the fight for now. But the longer it goes on, the lower his chances of success via public sympathy.

Do you remember your first car?

A question that has sparked quite the conversation amongst the team as we shared stories about our old, but much loved, bangers from the days of our youth.

We’ve had a couple of Renault Clios that are not without their battery and engine ailments, a rundown Morris Minor and a clapped out Rover 200 – no brakes, a dodgy handbrake but a great stereo.

What prompted our nostalgia? This handy infographic from Aviva (cl) on top ten first cars of all time and accompanying story on the changing face of your typical first car owner. It looks like we weren’t the only ones inspired by the story as the Daily Mail, Sun, Telegraph, Daily Star and Evening Standard all took their own spin on it (no pun intended).

Car infographic

What was your first car?

Great expectations and the role of central banks in managing them

 

When the economy stalls we turn to central banks for stimulus measures. Throw in significant sovereign debt issues and central bankers here in Europe and in the US have plenty to contend with. 

Debate and speculation around interest rates and quantitative easing programmes is widespread. Financial markets are looking for any sign of a shift in attitude from central bankers as to their views on what may be needed to turn the situation around. That is why here in Britain, the release of the monthly Monetary Policy Committee meeting minutes has become something of a media event in its own right.

We noted with interest recent analysis on the Zerohedge blog of the US Federal Reserve’s Maturity Extension Program or “twist.” The policy was introduced to combat perceived weakening of the US economy. The post demonstrates the way in which those following these announcements analyse the wording on the economic outlook:

The description of the outlook suggested Fed officials now see slower growth and have a more pessimistic view on the labor market. Committee members expect growth to pick up “very gradually” (adding “very” to the previous language) and think the unemployment rate will decline “only slowly” (as opposed to “gradually”).

 It all goes to show how carefully central banks must word their outlooks with so many interested parties looking for a guide to what is in store.

The future of Libor – 2 key points from a comms perspective

On Friday I attended Martin Wheatley’s unveiling of the Government-commissioned review of Libor at Bloomberg’s offices. Wheatley, who will head the new Financial Conduct Authority, gave an hour long speech setting out the consultation. He’s set himself an ambitious task – the deadline for responses is only four weeks away and Wheatley will publish his final recommendations by the end of September.

The speech itself contained a mixture of detail and vision for the future of Libor or its replacement. From a Comms/PR point of view, there were two particularly interesting points:

1. Who Runs Libor or its replacement? At the moment, Libor is run by the British Bankers Association, the trade group and voice for the industry. Some people are concerned that Read the rest of this entry »