Chase Manhattan Corp., seeking to drum up interest in its new no-load mutual funds, will target 300,000 of its own credit card customers with a direct mail campaign this fall.
The 10 new Chase Funds were launched nationwide last week. Sarah E. Jones, president of Chase Mutual Funds Corp., said the banking company hopes to spark broader interest in the funds by first promoting them to its retail base.
"The opportunity is really with our 27 million customers," she said at a press conference last week.
In addition, the company has bought advertising on network television and in national newspapers to build brand recognition for the Chase Funds. The spots began running this month, Ms. Jones said.
Cross-marketing products to consumers has been a major focus at Chase and other banks that want to spark revenue growth in their retail operations.
Consultants said targeted marketing to credit card customers is a classic first step. "You know them, and they know you," said Les Dinkin, a retail banking consultant at Oliver Wyman & Co. in New York. "That reduces the cost of acquiring that customer."
Of the bank's 27 million retail customers nationwide, 20 million are credit card holders, but most of those customers have only that one credit account with the bank. Mr. Dinkin said the challenge for Chase and other banks would be to select the customers most likely to want to invest in no- load funds.
"Those customers were attracted to the credit card offer," he said. "They won't necessarily be interested in other offers, and it doesn't necessarily mean they are good prospects." Ms. Jones said, however, that the bank used "sophisticated" data base technology to select customers "who will want the Chase Funds."
The Chase Funds were created in the 1980s as investment trust funds for customers of Chase Bank of Texas, a Houston affiliate. They now have $700 million of assets. In total, Chase manages $42 billion of assets in 72 U.S. and offshore funds. Its long-established Vista Funds are sold with a fee through 1,500 brokerage offices nationwide.
Ms. Jones said the company hopes to attract the growing number of people who prefer to choose their own investments, adding that 38% of total mutual fund assets in the United States are held in no-load funds. Many of those customers do not buy the funds through the brokerage outlets where Chase distributes its Vista Funds, she said.