Charles Schwab & Co. saw declining profits and market share in the early 2000s. An investigation found its branding had become unclear and it was seen as less of a low-cost provider. It also found its client base was not well-segmented. Schwab launched the "Talk to Chuck" campaign in 2005 to test repositioning itself as more approachable and emphasize its ability to provide affordable advice. The campaign was a success in early test markets, reducing attrition by 5% and increasing revenues and profits.

1. Integrated Marketing Communication
Charles Schwab & Co. Inc:
The ‘Talk to Chuck’ Advertising Campaign
Group 3
Shweta
Zacharia
Kern
Rachita
Swarooparani

2. Problem Statement
To reconnect with Self-directed and Unsure investors by demonstrating that we understood
their unique issues and concerns, and again position Charles Schwab as an approachable
and understanding place where investors can get the respect they deserve.
What went wrong at Charles Schwab & Co.?
In 2003-04, the Board noticed:
A deepening rift between the company and its retail customers, which was causing a
decline in profitability and market share.
The company’s relative prices had increased- it was no longer perceived as the low-
cost industry provider and a provider of good value.
Investigation by the company revealed:
Skewed client base- Schwab used different approaches to segment its customers and
accordingly suggested appropriate marketing initiatives as per the profile. However,
it was discovered that on the ‘investment attitude’ parameter, Schwab’s client base
was underweighted in the high-touch segment and over-weighted in the self-assured
segment.
9% of clients wanted lower commissions and fees- One of the most important
reasons cited by clients for moving assets out of Schwab was that they wanted lower
commissions and fees. Assets withdrawn by clients were migrating to its
competitors.
Unfavourable Brand Asset Value- Schwab’s perceived differentiation had declined
considerably. It looked less like a leading-edge discount broker and more like a full-
service broker.
Pain Points- The pain points included excessive broker commission on stock trades,
overwhelming mutual fund selection options, and stock recommendations based on
opinion rather than fact. There was client satisfaction gap with both individual
brokers and the industry as a whole.
Why did this happen?
Faulty brand advertising- The Company’s brand advertising had been haphazard. The
emphasis had been on creating direct-mail and e-mail for specific products and
services. At one point, it had six major marketing campaigns running simultaneously.
Multiple advertising agencies- It was using multiple advertising agencies that were
tripping over each other.
Improper handling of data- It was collecting enormous amount of data, but wasn’t
using it strategically.
High prices- It had priced its brokerage services too high vis-à-vis its low-cost
competitors.
Erroneous approach to customer education- The Company had erred by restricting
customer access to research and information according to a customer’s transaction
volume.

3. What needed to be done?
Brand-building initiatives would have to play a role in driving future growth and
brand revitalization. Thus, there was an urgent need to reinvest in a central brand-
building campaign.
The advertising goal was to position Schwab as a company from which ‘mass-
affluent’ investors could comfortably seek reasonably priced advice that could be the
basis for a long-term relationship.
They wanted to emphasize “approachability” as brand equity to differentiate Schwab
from competing brands.
How was it done?
An advertising agency- Euro RSCG, decided to try to leverage Chuck the man by
casting that informality more broadly to Chuck the company. It proposed a new
tagline- ‘Talk to Chuck’ which contrasted with the formality of traditional Wall Street
advertising.
The corporate brand marketing budget was $16 million. The company decided to
spend almost the entire budget on test marketing. This was needed to justify a
higher level of funding.
Chicago, Denver and Houston were selected as test markets. The test ran from April
2005 through September 2005.
Chuck himself got involved in the test.
What were the results?
On most measures, consumers rated Schwab more favourably in the test markets as
the campaign progressed.
The company had a 5% reduction in attrition in six months between April and
September.
Both call-centre customer contacts and field-sales activities increased.
There was a 6% increase in revenue from year-end 2004 to 2005 and 153% increase
in net-income for the same period. Net new assets increased by 10% over the
previous month.
Should the company maintain a steady level of spending or increase
the investment for the campaign?
The company should increase the investment for the campaign.