And it has been the model of how to do this. We have begun the process of trying to think about our African American initiative from a similar place. We now have two branches-one in Prince George’s County (in Maryland) and one in Atlanta-that are really targeted toward the African American community.
But middle class and upscale African Americans tend to be all over. They’re not living in single communities. So [we] need to have African Americans populated in all of our branches. We have a multifaceted strategy. And part of that is to reach out to centers of influence in the African American community, organizations like One Hundred Black Men, One Hundred Black Women and the local Black Chamber of Commerce. [We] go to their membership and bring the investor workshops to them.
B.E.: You’ve been quoted as saying firms that master “clicks and mortar”-combining the best attributes of the Internet and the physical distribution world-will be the winners in the Internet sweepstakes. What are some specific examples of how Schwab has put this philosophy into practice?
POTTRUCK: I think it’s going to be very hard for companies to distinguish themselves purely on the basis of having a superior technology, because technology today is so easy to copy. So someone builds a new feature into a Website and then everyone else adds that feature. I’m a little skeptical about building a sustainable competitive long-term advantage based upon your Website being better. Building it based on a better price, well, that’s hard, too, because people want service, not just low prices.
The ability of a company to connect with its customers is going to be how it distinguishes itself from other companies.
People, local branches, phone centers, Touch-Tone services, the Website and e-mail [services from Schwab] all complete a mosaic that makes the process seamless and effortless for our customer. And companies that blend all of that together are going to have the spectacular service experience that’s going to be unique and are going to see the dividend of the Web.
One of the things that we’re seeing in our business is that all the stuff that happens over the Web saves us money. It’s cheaper than it used to be with people delivering all [those services]. You can then take all those savings and invest them in people delivering new levels of service in things that we didn’t do before. For example, we didn’t [provide] advice before, [but] we haven’t raised our cost structure to do advice. What we’ve done is we’ve saved money on telling people what their account balance is or giving them a quote. You can do that over the Web now, or on a Touch-Tone phone.
B.E.: As you know, Mark Barton, a day trader in Atlanta, killed several people in a shooting spree at two investment firms where he worked. His rampage has been linked to losses as high as $400,000 that he suffered while day trading. Some firms have responded by beefing up security at their offices as well