REV: JANUARY 11, 2008
JOHN A. QUELCH
Charles Schwab & Co., Inc.: The “Talk to Chuck”
It was January 2006, and Charles Schwab & Co., Inc.’s Chief Marketing Officer Becky Saeger and Charles Schwab (known to his employees as “Chuck”) were reviewing the nine-month results of the company’s new “Talk to Chuck” (TTC) corporate advertising campaign. Saeger and Chuck hoped the TTC campaign, which included a colorful series of television ads that used animated images of customers talking frankly about their investment needs, had revitalized the flagging financial services brand. Chuck had approved the campaign after coming out of retirement in July 2004 to reclaim his role as CEO of the $4.2 billion company he founded in 1971. Two decades of rapid growth as a provider of quality financial services at reasonable prices had placed Charles Schwab & Co., Inc. (Schwab) at the forefront of the brokerage industry. But as competition intensified through the early 2000s, Schwab had found it harder to straddle the divide between full-service competitors such as Merrill Lynch and discount brokers such as Ameritrade and E*Trade. By early 2004, revenues were flat, and net income had declined by 39% in just 12 months. Upon his return as CEO, Chuck cut both costs and prices to restore the brand’s perceived value among retail investors and hopefully improve market share. Though the corporate marketing budget was among the first to be cut, Saeger had argued that brand-building initiatives would have to play a role in driving future growth and brand revitalization. Six months into the TTC test market, she persuaded management to invest a further $30 million in the TTC campaign for the fourth quarter of 2005. She was confident that the campaign could take at least some credit for Schwab’s turnaround: a 6% increase in revenue from year-end 2004 to 2005 and a 153% increase in net income for the same period.1 As she reviewed the year-end results, Saeger believed the campaign was proving successful but wondered how much she could persuade the CEO and CFO to budget for the TTC campaign in 2006. Should she maintain a steady level of spending or increase the investment?
1 The Charles Schwab Corporation announced 2005 revenues of $4,464 million versus $4,202 million in 2004 and net income of $725 million in 2005 versus $286 million in 2004.
________________________________________________________________________________________________________________ Professor John A. Quelch and Senior Researcher Laura Winig, Global Research Group, prepared this case. HBS cases are developed solely as the basis for class discussion. Certain details have been disguised. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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This document is authorized for use only in Comunicaciones Integradas en Marketing CEE by Luis S?nchez Tapia at Universidad del Paciﬁco from September 2014 to November 2014.
Charles Schwab & Co., Inc.: The "Talk to Chuck" Advertising Campaign
In 2005, the U.S. financial services industry comprised three major sectors—banking, securities and commodities, and insurance – which together managed $49 trillion in client assets.2 Financial services firms provided individuals, corporations, and other institutions with access to and management of assets. With the evolution and mainstreaming of the...
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