Measuring Up

It's sad when credit companies haven't a clue about credit

Peppercom has always used American Express for our small business needs. The company has always given us the benefit we need. That's why it's sad that we were forced to TRY and change credit card companies recently.

You see, my business partner and I (and a lot of our other senior executives) fly a lot on Continental Airlines. AMEX had a great points partnership with Continental and we used those points to purchase free tickets or upgrade. But, to our dismay, that relationship is ending in September.

We recently switched over to a Chase Small Business Card because that's Continental's big partner now. What's sadder, and equally as frustrating, is that Chase has no idea how to service the small business market and doesn't know very much about its target customer either. That became apparent yesterday in an appalling call I had with a Chase Small Business representative.

The call only happened because Chase gave us a paltry $17 thousand limit on our cards. With upwards of 15 executives using these cards to travel for clients, we knew that at a minimum, we needed a limit of 250k. That's what we have with AMEX. The credit professionals there understand our needs, how we use it and they see how we easily pay the balance each month.

Chase told us they needed two years of our audited Peppercom financials to approve this level of credit. We told them no problem. We're profitable, pay our credit debt on time and have plenty of revenue to qualify for this amount.

Yesterday, a Chase Small Business analyst left me a voice mail telling me that our credit request was declined and we are stuck with the original $17 thousand limit. That made no sense at all. So, I called him to discuss the matter. Here was our basic conversation (paraphrased):

Ed: "Hi, you denied us the amount we are asking for. Can I ask why? AMEX has no problem approving this amount or even more."

Chase Rep: "This card is really only meant for one person. While we appreciate your business, we're not sure how you could need that much credit."

Ed: "This is a small business corporate card, right?"

Chase Rep: "Yes."

Ed: "Well then if it is, you'd understand that it isn't for one person's personal use, but instead will be used for travel, hotels, client campaign purchases, office needs, etc., by many senior Peppercom employees. Thus, we could be spending 100 or 200 thousand per month and just want to have a safe limit in case. Again, we've had a 16 year relationship with AMEX that we are now looking to transfer to you. But, you need to understand our needs."

Chase Rep: "Thank you. We do understand your needs. But, that limit is just much too high for one person doing business, sir."

Ed: "Do you understand that this is for my company’s business, not one person? Why did you ask for two years of financial records from Peppercom if you only care about my card? I am not asking for a personal credit card. This is for all Peppercom's needs."

Chase Rep: "I understand and appreciate that. It just seems that our credit analysts feel that 17 thousand, your current limit, should suffice to fill those needs."

Ed: "That's ludicrous. Do your credit people see any issues with our financials? Ok, what about if I lower the limit to maybe... 200 thousand?"

Chase rep: "Nothing on my documents shows any issues with your financial statements, Mr. Moed. That's not a problem. But, 17 thousand is all that we can approve."

Ed: "Ok. I'm getting nowhere. How long have you worked in the small business area for...because you clearly don't comprehend the difference between consumer and business needs."

Chase Rep: "This is my third week, Mr. Moed,"

Ed: "Good-bye."

Based on my experience, Chase should not be in the small business credit card market business. The company wasted my time and that of Peppercom's financial managers as well. Any bank or credit vehicle that understands small business credit would enthusiastically want Peppercom as a customer for that amount of credit.

The moral of this post is for companies to stick to the knitting they know versus trying to expand into areas where a lack of experience will only damage their reputation. I'm done with Chase and every time I see one of its ridiculous small business commercials it will remind me to tell this story again and again and again...

You’re the agency to beat

There’s very little Joy in Mudville when a client tells you that his/her account will be going up for review. That’s because in almost every circumstance, the agency is stuck in a no-win situation.

The simple fact is that once an account goes into review, it’s extremely rare for the incumbent agency to keep the business. Yet, what often transpires is that the agency receives very positive communications from the client about how it should definitely stay in the game and pitch the business because the odds are quite good that it will win. So, never wanting to lose a good piece of business, the agency spends countless hours and $$$ trying to show the client(s) just how well the team understands their business, the great results that have been achieved and a host of other positive factors that it believes should position it well above the bright eyed competition.

While I’m sure this isn’t the only reason why incumbents lose, the key reason why the agency is actually the underdog from the beginning of the pitch process (contrary to what the client says) is because everyone likes shiny, new objects in life. And, when the pitch review starts, those shiny new objects (as in the other competing agencies) represent a fresh look at the world. That, in itself, is very appealing to any client… even though he/she will never tell the incumbent that.

We recently found ourselves in just such a position. We’ve had this client for 9 years. It’s a pretty dysfunctional company. That might sound like sour grapes, but it isn’t. If you asked our client contacts there this question, they would agree. The company has had a revolving door of CEOs (probably 7-8 over the last nine years). And, as much as they wanted us to provide them with strategic communications, they never had the ability to let us do anything beyond tactical media relations… up until the last 9 months, that is.

Ironically at that time, a new CEO came into town to shake everything up. At first, we viewed this as a very scary new reality. He beat us up pretty badly (I still have the bruises to show for it), as well as our clients. He wanted to know why there hadn’t been more strategic work executed on the brand to set the company apart from the serious competition that exists in the marketplace. Those were anxiety ridden discussions because as much as we tried to push through new campaigns that could have delivered the type of results he screamed about not seeing, nothing ever happened due to the internal inertia that exists within this giant company. So, we assumed that our agency and some of the clients would be summarily terminated.

Instead, because we pushed so hard (for one more try) this CEO gave us a reprieve. For the first time, he provided the tools we needed (and senior level approval) to offer a strategic assessment of where the brand should be and then we implemented a nine month campaign to generate results. I tip my hat to our team because those results are simply phenomenal… and they keep on coming. Our client(s) gave us uber praise and this hard-nosed, tough CEO actually handed out a number of compliments as well.

Still, that wasn’t enough. This CEO decided that his marketing people needed to conduct an account review just to see what other firms are out there. According to the CEO, he wanted to make sure that his company had the right firm for the long run. We talked it over and decided not to enter this review. We felt that our work should speak for itself and understood that incumbents rarely every win. But, one of our clients told us that because of the great results achieved, we had a very good chance of keeping the account and it really was “ours to lose.”

So, we decided to compromise. We didn’t officially pitch the business, but still left our hat in the ring to potentially keep it. Of course, that never really mattered and we pretty much understood that from the beginning. Ironically, I think we won the CEO over. In our last meeting a few weeks ago, he said to me, “You are the agency to beat because you know us and have generated some really good results. We’ll make a decision very quickly.” Those words were his last to me, though. Last week he was ceremoniously let go. And yesterday, those marketing people decided to choose a shiny, new agency to take our place. The parting words we received were, “We just need to make a change.” Nothing more was said.

So, what’s the moral of this post? I’d say that there are actually a few:
    1)  Incumbents rarely win – regardless of what the client says. Keep your head about you and know that you     have very little chance of maintaining the business for all the reasons I explained above.
    2)  If your client organization is completely dysfunctional, know that it often takes more than a very strong     willed CEO to actually change the culture or your ability to really make a dent.
    3)  Don’t get upset or angry about being terminated. Use your experience as an advantage. We will – we’re     excited to leverage our knowledge of the industry to help a different competitor in the not so distant future.

“A true friend is with you on the way down as well as the way up”

I read this quote on a small Captiva monitor as I rode up the elevator to Peppercom’s offices the other day. It is quite strange, mainly because this is copy for a Chivas scotch advertisement. Since I was a captive audience in that elevator, I read the copy again and scratched my head trying to understand why Chivas would possibly use this line based on the product that it produces and distributes. 

Are you thinking the same thing? My most immediate reaction is that Chivas is making a connection to people who are crashing in life (that they need friends). And I’m thinking that it’s because they drink way too much. But, why in the world would a spirits maker want to tie its brand to such an awful concept? Especially considering how careful the entire industry needs to be about responsible drinking behavior.

So being the curious fellow that I am, I decided to check into this further: http://www.chivasbrotherhood.com.  The Chivas Brotherhood is a testosterone-driven, male bonding site. It aims to connect the Chivas brand with sophisticated and affluent men who clearly like the finer things in life, including relaxing in cigar smoke filled billiards rooms, sipping scotch and eating a tasty steak, all while telling chummy stories with their buddies.  The opening manifesto says it all:
     “There’s a certain bond that can only be attained by a group of men…These men belong to the brotherhood”

There’s a special concierge which offers specials, contests and giveaways to its members and an “Agenda” section that highlights upcoming events that its members could be interested in attending. And, the library is a real treat because the quotes and stories are made up of such macho content that just by reading them, members are sure to grow more hair on their chest as well.

Ok, I get it. I’m a marketer. This is Chivas’ cute approach to building a deeper relationship with target men drinkers. It’s also a smart means to generate lots of email addresses to enhance the beverage maker’s growing database. All of that makes total sense. But, the ad still doesn’t. I only went to this site because the advertisement was so bizarre and was curious. I also wondered if I did my homework, would I have new blog material. Clearly, that’s now a reality.

There’s no doubt that a good ad can and should lead the target audience to do something. But in this case, I just continued to connect Chivas with “on the way down.”  There is nothing enticing or remotely positive about that.