Charles Schwab faced declining profits and market share in the early 2000s as competitors cut fees. Its marketing had lost focus on clients' needs. The "Talk to Chuck" campaign repositioned Schwab as approachable and understanding of clients' financial issues. It featured average Americans' problems and the message to "Talk to Chuck". Testing showed increased accounts, assets, and reduced attrition. The nationwide rollout increased assets by $6 billion. The executive supports allocating $55 million of a $200 million 2006 budget to continue the successful campaign.

1. Case Study – Charles Schwab& Co.: The “Talk to Chuck” Campaign
Circumstances and Motivations of the “Talk to Chuck” (TTC) Development Campaign
1) Company Background :
In 1975, Charles Schwab revolutionized the brokerage industry and acted as an advocate for
investors with a differentbusiness philosophy - allowing individual investors to manage their
assets and making transactions free from high costsand conflicts of traditional brokerage
firms. The company enjoyed significantly growth over the years in terms of number of
accounts and assets under management. In 1996, the company launched an online trading
platform, and cut equity tradeprice to an industry low of $29.95 per trade. The brokerage
company soon became the “King of Online Brokers” and had2.2 million investors transacted
through the website in 2-years' span.
2) Industry Environment and Competitors :
Charles Schwab was able to lead the investment wave of 90s by sticking to the customer
centric principle and by adaptingto new technology. However, in the late 90s, deregulation
allowed insurance companies, commercial and investment banksto enter into one another's
businesses, which generated intensive price competition and commoditized basic
brokerageservices. Charles Schwab's brand was caught in fierce threats from full service
brokerage firms and deep discount internetbrokers like Ameritrade, E*Trade and TD
Waterhouse, which took over Charles Schwab's industry challenger roles andoffered lower
equity trade prices than Charles Schwab.In addition, technology advancement during the 90s
enabled customers to be more technology savvy and independent inresearching and investing
securities online, while became less dependent on brokers. In response to this client
sentiment,Charles Schwab started offering broad range of financial services.
3) Problems facing Charles Schwab:
By 2004, the company suffered from a trend of lower profitability because competitions cut
into the online brokerage marketshare and transactions fees – the company's main source of
income. Charles Schwab was not providing good value toclients, which is a derail from the
company's core value. This heavy rift between company and its retail customers, put
inCharles Schwab's terms, was that “the company lost connection with clients and the
marketplace”, and the company failedto differentiate itself from other brokers.The company
cut its marketing budget due to profitability pressure, but soon realized that investing in brand
marketing topropose brand differentiation is imperative. Therefore, Charles Schwab invested
in market segmentation studies and concluded that the company client base was underweight
in the high-touch segment and overweighed in the self-assuredsegment. Also, clients had
been leaving for lower commissions and withdrawing assets. A brand asset valuator (BAV)
studywas also conducted, which showed that Schwab's perceived differentiation declined
considerably.

2. Company Strategy behind the TTC Campaign
1) Change of Conventional Marketing Strategy: Traditionally, Charles Schwab focused
on direct marketing campaigns that run simultaneously without a central theme.
Themarketing efforts, like what other firms were using, emphasized on showing
visual clichés of wealth building but lackedpersonal touch that really addresses
imminent clients’ concerns and needs. Also, with the company’s differentiation
indecline, the brand had lost the sense of momentum it once had with the mass
affluent investors.Euro RSCG, Charles Schwab’s marketing campaign consultant,
suggested that the once great brand needed to bereinvigorated with a renewed
perspective and purpose to reclaim the historical role as advocate for investors.
Reconnectingwith investors can be done by demonstrating that the company
understands clients’ unique issues and concerns, andpositioning Charles Schwab as an
approachable place where investors can get the respect they deserve.2)The “Talk To
Chuck” (TTC) Campaign: Charles Schwab himself, a figure who investors are
familiar with from the company’s previous campaigns, was chosen tobe the central
theme of the campaign. The main reason behind this was that his values and personal
sense of responsibilitytoward clients influence employees and the company, and
probably inspired many clients throughout the years. Employeesalways talk about
Chuck and it is not uncommon to hear “Chuck always says..”, “Chuck would never..”
in conversations.With this corporate culture, employees represent Chuck and interact
with clients with Chuck’s integrity in mind even theywere not trained to “be like
Chuck”. Clients will feel as if they are simply “talking to Chuck”.The marketing
campaign used animated characters that are portrayed as average Americans, and the
characters voicedtheir issues and concerns in their financial planning strategies and
preparation for life events. In terms of visualcommunication, ads simply provided an
answer “Talk to Chuck” for clients to get problems resolved. The campaign put
realinvestor issues front and center, and use real “pain points” for a personal touch.
The answer “Talk To Chuck” served asstrong call of action and an invitation for a
candid conversation with someone who really understands their needs. Thiscampaign
positioned Charles Schwab as a place very approachable where clients can have a
comfortable communication,and Charles Schwab is the “go-to” source or “Mr. Fix-It”
in terms of financial needs.The marketing team carefully selected 3 test markets
(Chicago, Denver and Houston) to test marketing campaign from April2005 through
September 2005. The team took sales seasonality, sales force size and geographical
dispersion into accountfor consideration, and used 3 control cities as comparison
(Washing, D.C., Phoenix and Dallas). The marketing campaign adopted a blended
mix of media, including traditional media (e.g., local television, newspapers and print
ads, billboards,and radio) and also innovative media (coffee sleeves, office building
elevators interior, customized sponsorships, etc.).These are unexpected places that are
rituals of target clients’ lifestyles, and this promoted the idea that investing is
anessential part of everyday life. The marketing campaign test cost $15 million, which
is equivalent to a $100 millionnationwide campaign.

3. Results of the TTC Campaign
The TTC campaign turned out to be a huge hit with popular market reaction.Market studies
were conducted after the TTC test Campaign ended. On most of the measures, consumers
rated CharlesSchwab more favorably in the test markets in terms of company awareness,
good value for money, unique alternative,account opening consideration, etc. Call-center
customer contacts and field sales activities were both increased, whileattrition was reduced
by 5%.With the TTC campaign, new accounts had an on average 111% lift in test markets
among new and existing households(new households with 125% lift and existing households
with 98% lift); while net new assets, which is new assets minuswithdrawn assets increased
205% on average among existing and new households (new households 137% lift and
existinghouseholds 273% life). The success of TTC campaign was demonstrated through
these two encouraging crucial metrics of the business, and they were strong enough that the
TTC campaign was extended to a nationwide footprint in September 2005.
Budget Request for 2006
I would strongly support the $200 million marketing budget for 2006. Since the TTC
campaign became a nationwide effort,net new assets increased by $6 billion (10%) over
August 2009, and net new assets for the 3Q 2009 were 80% higher than3Q 2004. By
December 2009, revenues increased 6% and net income increased 153% over the same period
in 2004 (from$286 million to $725 million). I would say the $200 million marketing
expenditure ($55 million will be allocated to the TTCcampaign) seem to be safely offset by
the additional net income that comes to Charles Schwab, and the campaign canoffer great
income opportunities that make the increased marketing expenditure justified.In addition, the
proposed advertising will be concentrated during non-slow seasons, when client investment
activity and newaccount openings have been strong historically. As management already
approved the increased 2005 marketing spendingfrom $160 million to $195 million, I am
confident that net new assets and net income in 2006 will be sufficient enough toallow the
budget to expand to $200 million, if not even further With putting clients’ needs and concerns
front and center through a personal touch, Charles Schwab once again gainedground against
its key competitors in almost all of its success measures, and the brand was reignited as “The
brokeragefirm” to go to that offers core brand equity differentiation indicators of
“Approachability and Value”.