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Charles Schwab“Talk to Chuck”

By:Abhishek SoodAshish Dadoo

GeorgyKanishk Puri

Thomas

OUTLINE

Case Objective

Industry background: Charles Schwab & Company

Marketing in Schwab

Customer Segmentation

Measuring Loyalty

The “Talk to Chuck” Advertising Campaign

TTC Test and review

Conclusion

Case Objective

To effectively evaluate the advertising campaign of “Talk to Chuck” for Charles Schwab Corporation

To discuss case objectives and message strategy by providing marketing recommendations

The Charles Schwab Corp.

Established in 1971 by Charles R. “Chuck” Schwab as a traditional, brick and mortar brokerage firm and investment newsletter publisher.

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.

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

2004 offered a range of services in three sector Schwab Investor,Instutional,and US trust.

Marketing in Schwab

Chuck planned to cut costs

Brand marketing budget reduced

Saeger brought from Visa to Schwab

Schwab’s brand identity being damaged

Believed that Schwab brand needs revitalization

Schwab was charging high prices for its services

Used direct marketing traditionally

Direct marketing campaign to be used again

Schwab decided to bring back the old image of the company of ‘being approachable’

Customer Segmentation

Segmentation of consumer behavior

Had 4 kinds of segmentation: investment attitudes, life stage, investment styles, hidden assets

Investment attitudes further segmented to know about interaction with broker

Budget allocated depending on segmentation

Direct marketing used by sending specialized packages for each customer.

Measuring Loyalty

Net new assets= new assets- assets withdrawn

Market share was declining

Most frequently reason for moving assets out of Schwab

Need money for major purchase 21%

Wanted to invest less in stocks 12%

Change in personal situation 11%

Wanted lower commissions & fees 9%

Wanted more investment advise 8%

Brand asset valuator(BAV)

“Talk to Chuck”

Video 1

“Talk to Chuck Campaign”

Advertising account was a stiff competition between 4 agencies but was finally given to Euro RSCG

Euro RSCG was fifth largest global advertising agency including clients like VOLVO and Nestle

Euro RSCG’s 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

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

Ethics and Attitude along with his core values

TTC Marketing

Traditional media

local television

Newspapers

print ads

billboards

radio

Innovative media

coffee sleeves

office building elevators interior

customized sponsorships

Campaign Print Ads

A special technique called “rotoscoping” helped to improve the quality of TV advertisement

Key point- Its approachability

Employees represent Chuck and interact with clients with Chuck’s integrity in mind

TTC

Video 2

TTC Test

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 Schwab’s invested asset)

Chucks Work ethics: Visited Test Site to speak to Schwab field representative to make sure they were comfortable with the campaign

Video 3

TEST REVIEW

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)

Customer attrition

5% attrition reduction in 6 months

Customer service touch points like call centers customer contacts and fields sales activities, both had increased

“Talk like Chuck”

“I am Chuck” Contest

Should Charles Schwab maintain steady level of spending or increase

the investment???

INCREASE!!!!

Planning for 2006

The decision of increasing the marketing budget for extending TTC nationwide was critical for Schwab

Financial statement showed that 6% increase in revenues for the year 2005 over 2004 (third quarter)

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

Financial statement showed that 11%increase in fourth quarter

253% increase in net income in fourth quarter

Conclusion and Recommendations

Focus on customer and create more value

Maintain brand image and core values of the company

Invest in advertising and increase marketing budget

Be innovative-seize opportunities

Be in constant touch with the customer

Communication Strategy Characteristics

Target is new and existing customers who can invest $50k to $2 million

Affective component: Changing current investor attitude towards financial service firms

Behavioral component: Call and talk to a Schwab representative

Essentially a PULL strategy

THANK YOU FOR YOUR ATTENTION