Lessons in Marketing by Barney Frank

February 27, 2009

I really try hard not to throw around my opinions about the current economic problems.  There are already plenty of people, most of them much smarter than me, who do enough pontificating without adding my opinion to the mix.  David Brooks writes “I worry that we’re operating far beyond our economic knowledge. Every time the administration releases an initiative, I read 20 different economists with 20 different opinions.” How can I possibly even have an opinion if some of the most respected economist in the world can’t even agree on the correct course of action?

It turns out I do have a few opinions.  At first glance, I didn’t pay too much attention to the NY Times article about Barney Frank’s comments concerning Citi’s naming rights for the new Mets’ stadium.  I know Barney is somewhat controversial, and there are a lot of people who feel he should share the blame for our current problems. I don’t have a strong opinion about him one way or the other.  However, after I digested his quotes about the naming rights to the new stadium, I extrapolated some alarming implications.

Here are a few of Barney’s opinions about stadium naming rights:

“Marketing expenses should be for real marketing, not ego boosts, which is what I think naming rights are,”

“Important men, in particular, like to hang out and ingratiate themselves with sports figures, and after the fact try to figure out how to make sense of the sponsorships as marketing or economic development.”

“I don’t think anybody has ever opened a bank account or decided to buy a CD because a bank’s name is on the stadium,”

I don’t know if any of his assertions are right or wrong.  But then again, Barney himself does not know if any of his assertions are right or wrong.

It’s not his opinion that worries me, but the idea that his opinion could actually mean something. His opinion might actually influence marketing decisions at Citi, and in my opinion, that is definitely wrong.

Barney is not a marketing executive.  He has been a politician for the past 37 years.  There is nothing in his training that suggests he would know what type of marketing works and what doesn’t work.   By the way, government has never shown a great propensity for making terrific business decisions. Lest we forget, our government has been taking giant sized risks with our money for a long time now.   In fact, the government’s share of Citi, the same share that has empowered Barney’s opinion, is at least partially funded by a communist country’s willingness to purchase US bonds.  Seems pretty risky doesn’t it?

I don’t have a problem with government oversight and regulation.  What scares me is regulation that advances to a point where there is hardly a distinction between private enterprise and property of the state.


Delicious Money Mashup: iPhone in at BofA, Amazon Payments go Live…

February 6, 2009
  • IOU Central: P2P Lender
    IOU is a new p2p lender set to open in the spring of this year. Despite regulatory scrutiny from the SEC, it seems new p2p lenders are determined to open. It will be interesting to see how IOU differs from other p2p lenders already making loans.
  • Amazon Payments Account Management
    Amazon competes directly with PayPal with this p2p mobile offering. It allows you to send money to others using text messages. It links to your Amazon profile and will use your credit card to fund transfers to other consumers. You can send funds to email addresses, aliases, or mobile phone numbers. If you do not connect a bank account to your profile, then it will pull money from your credit card as a cash advance.
  • Hunkering Down: Strategies for the Financial Crisis
    What should your alternative channel strategy be in a year of financial turmoil? The author suggests puttig mobile on hold, conversing with customers via, email, blogs and podcasts, and adjusting your online marketing strategies. I am not sure I agree with the mobile on hold suggestion. If you are looking to expand your deposit base, there is evidence that a good mobile initiative will help.
  • Mobile Banking Stats: 40% of Bank of America’s 2 million Mobile Bankers Use iPhone or iPod Touch
    Bank of America believes that their iPhone offering may be driving new business. In other words, people are opening accounts at Bank of America just because they want to use the iPhone app.
  • High-Yield Reward Checking News – Growing Popularity
    Rates on high yield rewards checking accounts remain quite high; even higher than those of savings and accounts and CD’s. High rate checking accounts reward customers for using their account in ways that makes the financial institution money – via interchange – and saves them money – by subscribing to eStatements, using Internet Banking, and other electronically delivered services.
  • Fiserv, Jack Henry Upbeat About Core Client Spending
    Most of Fiserv’s and Jack Henry’s revenue comes from small and midsize banks and credit unions. Those midsize clients seem to be doing better than their larger counterparts, and may even raise their spending in some areas this year.

Tiger Woods the Economist?

January 23, 2009

I have always been skeptical of economist’s predictions. Sure, there were many who predicted our current problems (e.g. Peter Schiff).   However, they were the minority. Interestingly enough, according to a recent article by Jeff Stibel on the Harvard Business Publishing site, the most accurate predictor of macro economic conditions is Tiger Woods.  The Tiger Bears and Bulls index chart below shows the correlation between Tiger and the market.

Tiger vs. the Bulls and Bears

Tiger vs. the Bulls and Bears