Charles Schwab Talk to Chuck

By: Abhishek Sood Ashish Dadoo Georgy Kanishk Puri Thomas

OUTLINE
S Case Objective
S Industry background: Charles Schwab & Company S Marketing in Schwab S Customer Segmentation

S Measuring Loyalty
S The Talk to Chuck Advertising Campaign

S TTC Test and review

S Conclusion

Case Objective

S To effectively evaluate the advertising campaign of Talk

to Chuck for Charles Schwab Corporation

S To discuss case objectives and message strategy by

providing marketing recommendations

The Charles Schwab Corp.

S Established in 1971 by Charles R. Chuck Schwab as a

traditional, brick and mortar brokerage firm and investment newsletter publisher.
S May 1, 1975 the company became the first discount self-service

brokerage firm to allow investors to manage their assets and make transactions without the help of traditional brokerages.
S In 1983 , Bank of America acquired Schwab for $57 million, but

Schwab corporation was able to buy back the same at 280 Million and thereafter went public
S 2004 offered a range of services in three sector Schwab

Investor,Instutional,and US trust.

Marketing in Schwab

S Chuck planned to cut costs

S Brand marketing budget reduced

S Saeger brought from Visa to Schwab S Schwabs brand identity being damaged S Believed that Schwab brand needs revitalization

S Schwab was charging high prices for its services

S Used direct marketing traditionally

S Direct marketing campaign to be used again S Schwab decided to bring back the old image of the

company of being approachable

Customer Segmentation

S Segmentation of consumer behavior S Had 4 kinds of segmentation: investment attitudes, life stage,

investment styles, hidden assets

S Investment attitudes further segmented to know about

interaction with broker

S Budget allocated depending on segmentation
S Direct marketing used by sending specialized packages for

each customer.

Measuring Loyalty

S Net new assets= new assets- assets withdrawn S Market share was declining S Most frequently reason for moving assets out of Schwab Need money for major purchase 21%

Wanted to invest less in stocks

Change in personal situation

12%
11%

Wanted lower commissions & fees 9%

Wanted more investment advise

8%

Brand asset valuator(BAV)

Talk to Chuck

S Video 1

Talk to Chuck Campaign

S Advertising account was a stiff competition between 4

agencies but was finally given to Euro RSCG

S Euro RSCG was fifth largest global advertising agency

including clients like VOLVO and Nestle

S Euro RSCGs Objective was to target mass affluent:35-

54 years old investors with $50k to $2 million investable assets and to build a long term relationship with customers

Pitch Meeting
S The company was very formal so the creative team at

Euro RSCG decided to try and leverage CHUCK the man by casting that informality to Chuck the company
S Ethics and Attitude along with his core values

TTC Marketing

S Traditional media

local television
Newspapers print ads billboards radio

S Innovative media

coffee sleeves
office building elevators interior customized sponsorships

Campaign Print Ads

S A special technique called rotoscoping helped to

improve the quality of TV advertisement

S Key point- Its approachability S Employees represent Chuck and interact with clients with

Chucks integrity in mind

TTC

S Video 2

TTC Test
S S S S S S

TEST MARKETING Goal to measure campaign success by tracking net new assets and number of new households investing with Schwab Reform: the need to reach their growth objective by prioritizing on new customers Target sales to be almost 250 times the campaign expenditure in new assets to break even 3 Test Markets:Chicago, Denver and Houston(accounted for 6% of Schwabs invested asset) Chucks Work ethics: Visited Test Site to speak to Schwab field representative to make sure they were comfortable with the campaign

S Video 3

TEST REVIEW

S S

Consumer Attitudes about Schwab and its competitors Consumer rated Schwab more favorably Additional Tracking Consumer who recalled vs. Nonrecallers(+6 points)

Unique Alternative(+5 points)

Gaining Ground(+7 points)

Ranking of financial services companies in 2005(Q4)

S Customer attrition

5% attrition reduction in 6 months

S Customer service touch points like call centers customer

contacts and fields sales activities, both had increased

S Talk like Chuck
S I am Chuck Contest

Should Charles Schwab maintain steady level of spending or increase the investment???

INCREASE!!!!

Planning for 2006

S The decision of increasing the marketing budget for extending

TTC nationwide was critical for Schwab

S Financial statement showed that 6% increase in revenues for

the year 2005 over 2004 (third quarter)

S 153%increase in net income($285 million-$725 million)in third

quarter
S Financial statement showed that 11%increase in fourth quarter S 253% increase in net income in fourth quarter

Conclusion and Recommendations

S Focus on customer and create more value

S Maintain brand image and core values of the company

S Invest in advertising and increase marketing budget S Be innovative-seize opportunities S Be in constant touch with the customer

Communication Strategy Characteristics

S Target is new and existing customers who can invest

$50k to $2 million
S Affective component: Changing current investor attitude

towards financial service firms

S Behavioral component: Call and talk to a Schwab

representative
S Essentially a PULL strategy

THANK YOU FOR YOUR ATTENTION