If you haven’t read Michael Lewis’ The Big Short, about the financial crisis, you’re missing out. The way he breaks down the events that led to the crisis we’re still digging our way out of today is amazing, and easy to understand.
And I also pulled out a lesson in marketing that may be another one of the reasons that the public doesn’t trust us sometimes: marketing sometimes involves making something so complicated that no one can understand it, because if they knew what they were buying, they wouldn’t.
The goal of marketing should be to draw attention to a product, highlight its value, and get people to see that that value outweighs the cost so they buy it. More often than not, we’re marketing something that we truly believe will make the person’s life better. But sometimes that’s not the case.
Sometimes we market something because if people buy it, it will make our life better. That was the name of the game in the financial industry in the years leading up to the crisis. Without getting into too much detail, banks were selling people bad mortgages, then they were taking those mortgages and creating financial instruments that were so complicated that even they didn’t know what they were worth. But they successfully marketed them to ratings agencies and consumers as “safe”, even when some people were warning that what they were doing could not last.
And what happened? It didn’t last. And the whole country paid for the greed of one industry.
That’s marketing at its worst.