White Paper: JPMorgan Chase’s $175 Million Mistake
Download our white paper on how JPMorgan Chase invested $175 million in a company that had fabricated the vast majority of its contacts.
JPMorgan Chase, a financial giant known for its meticulous due diligence, made a colossal $175 million mistake. The story begins with the acquisition of Frank, an online platform simplifying the Free Application for Federal Student Aid (FAFSA) process for college students. Frank's founder, Charlie Javice, achieved rapid success, landing on Forbes' prestigious 30 Under 30 list. This success led to JPMorgan Chase's acquisition in 2021.
However, there was a hidden danger lurking within Frank's operations — 4 million out of 4.25 million contacts in their customer relationship management (CRM) system were completely fabricated.
JPMorgan Chase only realized the problem when a marketing email sent to Frank's list performed abysmally. Civil suits were filed, and Javice faced criminal charges. This shocking incident raises essential questions: How did this happen, and how can others avoid such a costly mistake?
In our white paper, "The $175 Million Mistake," we dissect the three critical steps that led to this nine-figure blunder:
Neglecting Authenticity in Due Diligence: JPMorgan Chase focused on data completeness rather than the authenticity of Frank's contacts, missing critical red flags.
Settling for User IDs: Instead of verifying the list's authenticity, JPMorgan Chase accepted user IDs as a substitute for real customer information.
Discovering the Fraud Too Late: Suspicion arose one year post-acquisition due to poor email marketing performance, exposing the fabricated contacts.
But that's not all. The white paper also offers practical guidance on how to avoid costly mistakes like this one, including:
Analyzing Conversion Rates
Requesting Email Marketing Performance Data
Reviewing Marketing Spend
Verifying Contact Authenticity
Additionally, we provide three crucial questions to ask during due diligence to safeguard your investments:
What are your marketing funnel metrics?
What percentage of the total available market (TAM) do you serve?
Have all metrics been validated?
Don't let your organization fall victim to avoidable mistakes. Learn from JPMorgan Chase's unfortunate misstep and discover how to protect your investments. Download the white paper now for a deeper dive into this cautionary tale and invaluable insights.
Get the full story by downloading the white paper now.
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