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Banking is largely a commodity category these days.
Gone are the days when you knew your teller when you deposited your paycheck in person every other Friday.
So, all that are left are "virtual relationships." Given that, banks are searching for ways to forge relationships with customers.
Bank of America's Museums On Us promotion is a good example- it began with Fleet and BankBoston and was kept on as a goodwill gesture when the mergers happened. The bank gets to look like a good community citizen, consumers feel ever so slightly more attached to that bank, and maybe don't move their account when someone else around the corner offers .005% more interest.
They make more money, turn a profit, and just maybe, need less bailout money.
That's my guess.
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How about the $600 million GM has spent on advertising during NFL games? Senior management at these companies just don't get it. Let the companies go under and use the bailout money to help the employees that loose their jobs. I'd rather see the worker bees get the money than senior management who will probably just blow it while the ship sinks beneath them.
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God, if only WE ran the world.
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Do you understand contracts? The banks signed contracts for these things long ago. They are honoring the contracts they signed.
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Citi is raising CC rates by 4-5% across the board, even if you have good credit and an excellent payment history with them.
and yet, we are paying AGAIN on the govt/taxes side to bail them out. ludicrous!
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do you have any idea how big citigroup is?
small potatoes.
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Why? Let's say the skating lessons cost Citibank $50,000, which is a piddling amount for a huge bank but buys the bank an immense amount of goodwill. Remember that the only place in America that Citigroup does retail banking is New York.
Same thing with advertising on NFL broadcasts. I sincerely doubt that GM has spent $600 million on advertising so far during the NFL season but even if it has, the worst thing it can do is stop advertising.
When these businesses go out of business, they don't sink without a trace. They leave great tears in the fabric of the economy. They take other businesses down with them. You might not think it will affect you but it will. Everything is interwoven. We all have to be concerned with each other in this world.
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A company as large as Citi is segmented into all sorts of smaller groups, and the charitable gifts are not literally withdrawn from the operating expenses of their credit card division or their retail bank division or whatever. It would probably take a battery of lawyers to find a legal way to transfer the assets of the charitable arm into the credit card arm without breaking all sorts of laws and regulations, and in the end the money would dissolve in a sea of billions and be like a pebble in a pond.
Eliminating their advertising would not be nearly so tricky, but as pointed out they would have to default on contracts. And very well eliminate some jobs along the way.
