The shocking revelations from the Royal Commission continue to flow.
Last week it was NAB’s turn in the hot seat, and they did not fail to add to the building dismay and absolute disgust being felt.
The Governance Institute defines governance as:
Governance encompasses the system by which an organisation is controlled and operates, and the mechanisms by which it, and its people, are held to account. Ethics, risk management, compliance and administration are all elements of governance.
This seems to be an OK definition to me, with the obvious omission of any reference to the customer, the ones who put the money on the table in the first place. I had a quick look on the AICD site, and could not find any sort of definition, which seemed a bit odd. A google search for ‘marketing governance’ turned up a lot of self-serving fluff and cliché, but not much of value I could see in a quick scan.
Being simplistic, the revelations from the Royal Commission all seem to point to some very poor governance of the marketing function. Perhaps not surprising, as so few seem to have thought constructively about it. (myself included beyond the implications on strategy and resource allocation)
Besides the apparent breaches of the law, certainly breaches of ethical behaviour, and absolute failure of a culture to reflect in any way the promises made by the organisations to their customers, there is clearly no governance of marketing in the Financial Services industry.
If there was, we would not be paying commissions on sales, continuing to extract trailing fees, charging for services not delivered, lying, and even charging dead people for advice.
Effective marketing over the long term relies on ensuring that customers remain customers, that the lifetime value of a customer is not just respected, but revered.
The barriers to exit in Financial services are high, largely because of the low level of financial literacy and the sheer complication in this area. This is made worst by the blizzard of regulatory changes, industry jargon, sheer disinformation, and malevolence that abounds around a trough the size of the compulsory superannuation money pot.
It may be fine to put barriers to exit in place, customers hate them, but understand the reason, but then to screw customers behind the barriers to exit amidst the fog of disinformation and jargon, is a gross failure of marketing governance.
The responsibility of marketing lies with the representation of the customer inside the business. We talk about customer journeys, then stop at the first sales transaction. Has nobody in Financial Services thought of lifetime customer value, and acted as if they cared?
Here endith the rant!
Header credit: Once again, to Hugh McLeod at gapingvoid.com, who must have seen the Australian Royal Commission coming when he penned this cartoon years ago. This seemed like the perfect opportunity to use it!
