September 26, 2008

And The Winner Is… JP Morgan

In the midst of the credit crisis, JP Morgan Chase has been quietly rolling up major assets in investmet banking and retail banking. They bought Bear Sterns with government financing. They just bought Washington Mutual and will overnight have a massive retail branch network in the West–something they've been trying to do for decades.

So what's the marketing lesson in all of this?

There are two:

1) You can't market crap… just ask the CEO of Washington Mutual. I was a customer (until I pulled all my money out about a week ago… so yes, I was part of the run on the bank) and I thought it was ironic that upon logging into my online banking account, there was a letter from the CEO saying my money was safe.

Like that message was believable. Apparently, I wasn't alone. In the past 10 days or so, WAMU customers withdrew approximately $16 billion in deposts.  Geez, talk about a run on the bank.

So if your product "stinks" (and in this case I'm referring to WAMU's balance sheet), no amount of marketing is going to help. Forget the marketing. Fix the freakin product.

2) In a tough economy, there are ALWAYS opportunities… Just ask the CEO of JP Morgan Chase.  When the dust settles (and it does settle), JP Morgan Chase will have roughly doubled its Investment Banking business in terms of revenues, size, reach, distribution… and have done the same in retail banking.  In other words, when things settle down, JP Morgan Chase will have twice as good a "product" as they did before the current credit crisis.

It's a whole lot easier to market a great product that a lousy one. 

 

So my lesson for today, is this: Marketing is not just about communicating to your market about the virtues of your product (like the Washington Mutual CEO's attempt to tell customer their money was secure). It's just as much about making the factual reality of your products better.

Spread the Word!

Filed under Case Studies by Victor Cheng

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