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05.28.08 Advertising With Short-term Benefits And Long-term Consequences  By Mike Moran Banking heavyweight Chase has been blanketing the airwaves with a commercial that must be effective for them, because it's something they've used over and over for months. A shopper uses his phone right there in the store to get his credit balance, so he can decide how much to spend for a new TV. My question is whether this kind of advertising is a winning strategy over the long haul, or whether it is a campaign designed for short-term benefits with dire long-term consequences. The commercial begins with a woman telling her husband, "You're right, we need a new TV" as the man goes slack-jawed in amazement. Cue the Queen background for "I want it all and I want it now" as the man looks over dozens of televisions. Here, watch it for yourself-it's very effective. 
I noticed that the voiceover is very careful to say "Text Chase for your credit balance and decide what to spend in seconds." It doesn't say to "credit limit," and I don't know whether their service provides the credit limit. But I think this commercial is clearly trying to turn big purchases into impulse items. If we can just shoehorn it into our credit card balance, then we can buy it. I clearly understand why this text messaging service is so effective a come-on. It's a little embarrassing to have to call someone to ask your credit balance-you're kind of admitting you have no idea what you can spend in front of another human being. In fact, I suspect that most people avoid the phone call and just take a shot at the register and hope the card clears, which has to be stressful. This way, you can text your balance with your phone, taking the human being out of the equation. You can really let your hair down and be that wild spender you want to be. No one needs to know. Given the credit-crazed society that America has become, where our collective net savings rate is zero, I can see how this commercial can be an effective way for Chase to market its credit card. I am sure that there's a segment of the population that wants the Chase credit card for this feature, which allows them to indulge their impulses a bit more easily. And my suspicion is that this segment is insanely profitable for banks. While you might think that targeting a segment of people that are spending impulsively on credit cards might result in the banks losing their shirts on unpaid loans, I can't believe they are irrational. Banks have consistently targeted these borrowers over a very long period of time, probably because the interest and late fees paid by most more than make up for the defaults of a few. So, I could see how the impulsive spender could be highly profitable. I just wonder whether being this wanton about courting this segment is a good idea for the Chase brand image. Continue reading this article. About the Author: Copyright Mike Moran Mike Moran is an IBM Distinguished Engineer, expert on Internet marketing, and the author of Search Engine Marketing, Inc., the best-selling book on search marketing. Mike also writes the popular Biznology newsletter and blog. |
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