He starts with a quick summary of company stats:
NYSE traded with a market cap of 9.4 billion
Their model is business to business
$2.9B in revenue in 05
Market opportunity is now in cash and check displacement not so much their traditional credit card business. Lots of jargon here – I think he mean that consumers are using a card as a substitute for cash so that the payment category is what’s new and growing.
Now to the story…
In 96, their org was siloed, unaligned strategies, competition was ahead and bad ads coming out of the marketing department (gasp!). Your typical “we’re up a creek” type scenario.
They set a new course.
Started with new leadership – hired a new CEO, focused on the brand and rebuilt the sales organization.
How did marketing help out? First example he shows (from 97) is what he calls the priceless campaign. I know it well and you probably do too – “there are some things money can’t buy, for the rest, there’s ….you guessed it, MC”. That campaign is still running nearly 10 years later and as you can imagine, has won a slew of awards. It’s the largest single ad campaign – EVER. Pretty impressive given most companies cycle through campaigns with each New Years resolution.
Paypass technology – it’s the first in the category and is part of their differentiation strategy. He seems very excited by it but hasn’t really described what it is so I’ll take his word for now. They are also coming out with a product to compete with the AMEX platinum card.
MC is also focused on penetrating the Chinese market and understanding the middle class educated segment. These users want to travel internationally and do things that their parents couldn’t do. To illustrate, he runs a commercial of a young Chinese couple visiting many of the European companies using their MC. An interesting factoid – Europeans use debit cards more than credit cards. Guess they don’t embrace debt the way we Americans do but MC’s got products for all types.
Next he claims their use of sponsorships is inventive. They invested quite a bit in the World Cup this past year such as getting a card imprinted with a photo of your favorite player.
For 2006, he lists their key priorities as: defining the brand (he says they’ve never had an actual positioning statement so it’s a bit of back to basics), launching a corporate campaign internally and addressing industry reputational issues.
Reputational issues include consumer confusion about who sets interest rates – I learned that it’s not MC’s fault, it’s actually the issuing bank that sets the rate. A question from the audience asks what MC role can be in helping with consumer debt – a popular media topic. He argues that most consumer debt does not come from credit cards. MC does their part to educate the public on how to manage their finances prudently. Also, the industry as a whole is shifting to developing products and marketing to the more affluent segment rather than trying to get people who can’t afford it, to go into even more debt. That’s a start.
His experience is that in financial services as a marketer, he has to justify much more in terms of metrics than he ever had to in his career in packaged goods (he worked for P&G). One of his first insights at MasterCard was to “give em the numbers so they’ll leave you alone”. The evil “they” I assume is the finance dept.
MC uses their transactional data to understand consumer buying behavior as any good marketer would. The most interesting info he’s shared about this is how they cluster users into different segments. According to MasterCard, you either think of your card as “a tool”, using it 171 times per year, “a toss up” with 42 transactions per year or like me you consider your card “a temptation” and use it a mere 16 times per year. He mentioned a client in this category they spoke to that actually kept their card in a glass of water in the freezer to keep from using. I wonder if that worked for the guy.
His parting thought – a commercial that he says gets to the heart of the character of the company. A bit with 4 guys fishing that end up throwing their fish back in to the lake after looking sheepishly at each other – awwwwww. Not sure I buy that about MasterCard but it’s an emotionally effective ad.
Admonish your friends privately, but praise them openly.
Posted by: cheap air yeezy | November 11, 2010 at 03:16 AM