At the start of my marketing career, I used to work for MBNA (as a contractor helping set up their insurance services business unit in the UK). I found out whilst I was there that they used to mail every household in the UK on average once every six weeks, (admittedly the company had a deserved reputation for its aggressive direct marketing strategies, so this level of direct mail carpet bombing may not be typical).
MBNA pioneered securitising credit card debts and that helped their business expand, the founder Charles Cawley was a bit of a genius; especially when you think about the timing of the business sale to Bank of America.
Move forward to the current market conditions where the securitisation of consumer debt has taken down the banking system of the western world, yet as my colleague David Ingle pointed out; the stream of credit card and loan offers through our letter boxes hasn’t slowed.
Do these companies have a magic money tree to make these loans from? Probably not, it is obvious that marketing is out of step with the business.
You could argue that it is about getting the brand out there, but at current volumes being sent to an audience at the wrong point in their buying cycle it is likely to cause brand aversion due annoyance or educate the consumer to become ‘blind’ their brand as direct mail goes straight into the recycle bin.
This isn’t only the case with direct mail, the Halifax has continued its television advertising campaigns through the crunch.
Another classic example of this is where online advertising doesn’t reflect the reputation challenge that a business is going through.
Here is a picture of the search results page for EOS Air, a business class-only airline that I took when a competitor airline Silverjet went bust last year, yet you can see Silverjet adverts still advertising their services next to the search results (click on the picture to make it larger).
PROs need to co-opt marketing channels when reputation issues like this spring up so that marketing does not fan the flames in a crisis, (and is not out of step with the overall business goals.)
For further information on the workings of the credit card industry I can recommend this Frontline programme made by PBS in the US.