Fallout: The Financial Crisis

What’s at root of LendingTree slogan

Bob Moon Jul 24, 2009
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Fallout: The Financial Crisis

What’s at root of LendingTree slogan

Bob Moon Jul 24, 2009
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TEXT OF STORY

Bob Moon: Let me bounce a familiar slogan off you, and have you decide if it has quite the same ring nowadays as a persuasive pitch for financial services: “When banks compete, you win.”

That’s what lending LendingTree.com has been telling us for years. But I probably don’t need to elaborate on why the words “banks” and “you win” don’t exactly fit together like peanut butter and jelly lately.

Which may explain why LendingTree’s taken a new tack. Their motto now? “You to the Rescue.”

LendingTree commercial: Well old chum, it appears dark days are upon us. Men of ill repute have created a downturn of diabolical proportions. It’s time to rise and take control of your own financial destiny.

Yes, that’s just an average Joe pictured in LendingTree’s new TV spots. But in the mirror, he’s got a spandex suit and a super hero mask and looks ready to throw off those Wall Street ne’er do wells and wield control over his own money.

LendingTree.com CEO Doug Lebda says “he” is “you.”

Doug Lebda: We think nobody has the same vested interest in your financial health than you do.

Moon: Are you tapping into some sort of groundswell that you’ve turned up in research? Is there truly a shift in consumer attitudes?

Lebda: I think so. I think in two particular areas: We’re seeing consumers, increasingly they don’t just want choice. They still want to be empowered, they still want to be at the center, but now they also want the right answer. It’s more importantly, we think now to actually help guide them to what is most appropriate for them.

The other thing I think we’re seeing, is a return to financial responsibility at the individual consumer level. We see it in the broader economy with savings rates increasing, we see it with people spending less money.

But should we really all be doing this ourselves? We advocate personal responsibility, but it can be pretty tough to navigate this stuff.

Southern California-based financial planner Robert Pagliarini is the author of several books on this subject.

Moon: Now to be up front, you’re a financial planner, so you have a vested interest in people not just using the free services at LendingTree.com. That said, what do you think about the message in their ads?

Robert Pagliarini: Firstly I would say, these ads are brilliant. Because there is just so much fear and skepticism and I would say, anger, about Wall Street, about the stock market crash. So this idea that you can rise up and take control of your financial future, that sounds great. We all want to be empowered and you can probably do it to about 80, 85 percent, where it’s pretty good. But if you really want to get that edge, the other 15 percent or so, you really need someone that lives it and breathes and keeps up with all of the latest news and regulations.

Moon: Robert what is the difference between a site like LendingTree and sitting down, in front of a financial planner? They say they’ve factored in all the different answers that you can give them and will come up with the right answer. What’s the difference?

Pagliarini: It’s really night and day and one is not better than the other. You can do both. Basically, with a site like LendingTree, it’s very specific as far as what they do. They’re focused on loans, credit cards, mortgages. And they’ll shop through their various sources and try to get you the best deal.

Now, with a financial advisor, they’re looking at everything. They’re looking at your cash flow and budgeting, looking at your state plan, insurance needs, the entire picture.

Moon: And you might ask a question that the do-it-yourselfer might not think to ask.

Pagliarini: Well exactly. And you know, so many people want the right answer, but truly, I think the real benefit of working with an advisor, is that they’ll ask you the right questions and questions that you just’ve probably never considered before.

Moon: How much do you think that there is an element of the financial institutions wanting to shift the onus away from their own advice to the individual person? Maybe put the liability on their shoulders, “Well, you made those decisions, that’s your fault”?

Pagliarini: Well, I think you really have two different business models right now. You have a lot of brokers and financial advisors. And certainly, their pitch is “You don’t want to do it alone. Come to us, we’ve got the experience, we can help you out.” And I think they’d be really hard pressed to then try to shift the liability to the investor, because their whole approach is that, you know, come to us, trust us, we’ve got the experience, we can help you through this. So I think it’d be really hard for them to shift some of the liability.

But then on the flip side, the other business model, is this do-it-yourself approach. And that right now is actually a brilliant approach, because again, so many people are just upset and they feel almost burned by Wall Street. Of course, for those companies, the liability really does rest on the individuals shoulders. They’re making the decisions. Ultimately, they decide what happens. And the company’s offering these tools. Again, it’s just information and that’s where I could see that some of the liability definitely would be shifted to the individual.

Moon: Robert Pagliarini is a southern California-based financial planner. Thank you very much for joining us.

Pagliarini: Thanks so much for having me, Bob.

Hey, by the way, did you notice who was doing the voice in Lending Tree’s new super hero ad? If the name Adam West doesn’t ring a bell…

Adam West as Batman: You filthy criminals. You abominable outlaws.

You might recognize him as Batman from the campy TV series.

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