JP Morgan Chase 2006 Annual Report Download - page 10

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new branch-generated accounts versus those generated
across other channels, such as the Internet; determin-
ing what other business we should be doing with the
new card holder; and ensuring that our current card
holders have the right products and rewards programs.
We already have made good strides: Cards with
rewards programs are now 53% of our card outstand-
ings, up from 32% in 2003. And accounts generated
from direct-mail solicitations, which often come with
low introductory rates (and higher attrition rates), are
down to 32% from 55% in 2003. We have much
more work to do to continue this progress.
•Commercial Banking sales force management: Now
Commercial Banking rigorously tracks results
and profitability by banker and by client. We have
our bankers work with their clients to ensure that all
clients are profitable to the firm and that all clients
benefit from their relationship with the firm.
•New products in Commercial Banking: This past year
Commercial Banking continued to expand its product
offering. It added subordinated debt, mezzanine financ-
ing and even equity investing. We already had the clients.
They just were going elsewhere for these products.
•Private Bank: We’re making it easier for qualified indi-
viduals to do business with us, beginning with how
they open new Private Bank accounts. In the past, they
had to review at least six different documents and sign
multiple times just to start working with us. Now, a
new customer usually fills out only a one-page form
and signs it only once. Everyone’s happier, and we save
some trees.
Increasing marketing creativity and focus
Our company needs to become better at marketing.
And by marketing we don’t mean more television ads or
direct mail solicitations. We mean taking a sophisticated
approach to identifying a group of customers, figuring
out what they need and then delivering it to them better
than anyone else. The opportunities are significant. We
have multiple efforts under way, and we want to give
you a few examples of them.
Develop a better offering for affluent clients
We believe we do a very good job serving our ultra-
high-net-worth clients – those with more than $25
million of investable assets. But we can do a lot more
for the hundreds of thousands of affluent households
that fall below that ultra-high threshold.
Whether through our retail branches, our card business
or our Private Client Services unit, we interact with tens
of thousands of very wealthy individuals every day. But
in many cases, we haven’t identified them as affluent, or
we haven’t focused on providing them with the right set
of products that is tailored to meet their unique needs.
In 2007, we intend to do a comprehensive analysis of
this affluent market, and then develop and begin to exe-
cute a game plan. The likely result will be better identifi-
cation of affluent clients, solutions and rewards pro-
grams that cut across multiple products, more tailored
products, and specialized marketing and servicing.
Use customer knowledge to refine products, upgrade service
Our customers trust us and give us a lot of information
so we can know them better. While respecting a cus-
tomer’s privacy, we can use this information to make
better-informed decisions about what to offer customers
and how to evaluate them.
We’ve already mentioned how we can instantaneously
offer an approved credit card to customers while they are
opening a checking account. We can also underwrite the