The Bank and Life Insurance

The Bank and Life InsuranceWachovia Bank and Trust Company N.A., headquartered in Winston-Salem, North Carolina, is a member company of First Wachovia Corporation. At year-end 1987, Wachovia Bank had assets of $11.7 billion and deposits of $9.1 billion. Among U.S. banks, it ranked 30th by assets and 27th by deposits. It has 214 full-service banking offices in 92 North Carolina cities.

Wachovia traces its origins to 1866 when the First National Bank of Salem was organized. By 1911, the original bank had merged with Wachovia Loan and Trust Company to form Wachovia Bank and Trust Company.

Wachovia Bank and Trust is a full-service financial institution of nearly 8,000 employees and offers personal, corporate, personal trust and institutional banking services. Its mission has been to serve in a fair, balanced and exemplary manner the interests of shareholders, customers, employees and the public through adherence to high standards of financial soundness, customer ser­vice, employee professionalism, business ethics, corporate citizen­ship and profitability.

Wachovia’s parent is an interstate bank-holding company with headquarters in both Winston-Salem and Atlanta, Georgia, and assets as of December 31, 1987, of $19.3 billion.

Once you know what you need to say to your target audiences, your next step is selecting the appropriate media for com­munication. The right media choice depends on two key factors — first, the audience you would like to reach with your message; and second, the type of service you wish to present. Budget restrictions may constitute a third factor in your selection. However, try to resist the temptation to let short-term costs rule the day.

As with the other aspects of a financial marketing strategy, the selection of how you promote your firm and its products should not be left to internal biases and preconceptions. Again, let your customers tell you how they would like to hear about your com­pany. Some people, for example, don’t put a high premium on personal contact. In fact, they prefer doing everything over a telephone, a fact that built DirecTrust from scratch to $82 million in just over a year.

“Once you know who in the media may be interested in your
company, you have to approach them cold; you can’t take half a
bath, you have to get into the tub completely.”
Thomas Keating, Product/Marketing Public Relations, John Hancock Mutual Life Insurance Company.

As well, some products lend themselves to different media selections. This is because certain objectives can be effectively achieved only through specific media. For example, mass media advertising is ideal for creating an image or awareness of a finan­cial company or service; whereas, if you are asking your cus­tomers to take immediate action — call for an appointments or mail in a coupon — direct marketing is probably the best.

Most financial firms tend to concentrate their promotional efforts in one media; this is particularly common if the choice is newspaper advertising. However, combining two or more media elements can impact positively on bottom-line results. For exam­ple, David Bradley, president of the Council on Financial Competition, a nonprofit organization that studies the U.S. finan­cial industry, suggests dovetailing your direct mail efforts with a telemarketing program: “Direct mail combined with telemarket­ing builds response by 300% to 400%.'”

“You need to be constantly advertising, because people are only interested in aspirin advertising when they have a headache.”Cathleen Stewart, executive vice president, Shearson Lehman Mutton Inc.The following stories illustrate the employment of varying media types for different financial audiences and products.

Using a combination of national television and consumer print media to communicate the “Real life, real answers” cam­paign, John Hancock Mutual Life Insurance Company aimed for broad coverage of its target customer group (age 25 to 54; $20,000 to $75,000 household income including dual wage-earn­ing families).

The U.S. football playoff series beginning in late December and culminating in the hoopla of the Super Bowl game at the end of January provided the best way to reach these people. Thus, the company concentrated its national television advertis­ing here. A subsequent six-week spot television series in Hancock’s top 19 markets leveraged off the campaign’s initial launch.

Print coverage of the Real life, real answers series began with eight-page inserts in Time and Newsweek the first week in January, followed by two-page spreads in other consumer and financial newspapers and magazines, including People, Sports Illustrated, Money and U.S. News.

The campaign’s $7-million tab spent in just under three months left little ad money for the rest of 1987. There were no regrets on this from the company; the con­centration of advertising dollars into such a short time frame was a calculated move by Hancock’s advertising staff, a decision vin­dicated by the significant breakthrough in consumer awareness achieved by the campaign.

Royal Trustee Limited opted for print over electronic media for the introduction of its “Guaranteed Market Index Investment” product. Product ads appeared only in key financial newspapers and magazines, such as Your Money, Macleans, The Globe and Mail, Canadian Business, The Financial Times and The Financial Post.

Then vice president Paul Bates explains this strategy. “Electronic product advertising seems to work best for high-im­pulse purchases — financial services do not fall into this category. Further, with print, you can target very specifically and can explain the complexities of a new product.”

Research on the firm’s branch demographics lent further fuel to this argument. “We found that 80% of our clients live or work within three miles of our branches,” says Bates. Based on this information, Royal Trust no longer does any television advertising.

San Antonio Savings Association came to a similar conclusion about the effectiveness of mass media. This U.S. firm’s 1987 loan-by-phone program was first introduced to the Texas public through a combination of newspaper ads and direct mail. Although the campaign generated over 1,500 phone calls per month, it was not a success. Executive vice president of Market­ing, Russell Cobler, explains why, “We had every flake who had been turned down elsewhere calling us up for a loan. Our decline rate was over 70%!”

The company tried another tactic — direct mail, no newspaper. Phone calls dropped to 700 a month but the loan approval rate rose to 80%. An added bonus — the-direct-mail-only campaign cost just 40 cents per name, nearly $20,000 less in total than the cost of newspaper and direct mail combined.

DirecTrust’s selection of print over television advertising came about after a post-launch re-evaluation of the strengths of these different media forms. In a bid for company growth, this Toronto-based firm ventured into the arena of financial product telemarketing in late 1985.

Concentrating on the city of Toronto and its 3.5 million residents, the company’s first promotional shot included both provincial television and local newspaper advertis­ing. In this initial ad campaign, DirecTrust had two objectives: to generate calls and to create awareness of itself and its services.

Feedback from the TV campaign was disappointing. Recalls George Hopkinson, vice president and general manager, “We just didn’t feel we were getting the response to the television that we should have.” After some soul searching, Hopkinson and his team decided against continuing the TV option. “We realized that television is probably not a good direct-response media.”

Now, the firm limits its promotional efforts to ad placement in Toronto’s largest newspaper, The Toronto Star. The ad’s message is simple: Note our good interest rate offer. Note the convenience of our hours of operation. Call us now for more information. DirecTrust is also testing radio and direct mail options; early returns continue to favor newspaper as the best media for their purposes.

Special limited-time promotions have also proven successful for DirecTrust. Hopkinson provides an example. “We ran an ad announcing Canada’s highest rate for a limited time only, and got 2,500 calls in one week.” He concludes with a revealing com­ment, “Rate may be an important issue for many of these people the first time round, but the knowledge and service provided by our staff comes into play for second-time purchases.”

The message and choice of media for your communications combine to form the image of your company as seen by your customers. Below, we see how two financial institutions have implemented successful image campaigns.

A financial company’s image need not be completely rooted in fact, as discovered several years ago by Goldome’s. Company research had shown that Goldome’s customers and potential cus­tomers were sensitive to the lure of high interest rates. The com­pany knew, however, that consistently offering the best rates in town was beyond its resources. The launch of a three-year certifi­cate of deposit in 1985 taught Goldome a critical lesson – it is not reality that matters, but the customer’s perception of reality.

The new product was dubbed the “Think 12 CD” by virtue of its 12% rate the first year, followed by 11 % and 10% the next two years. As market rates went down, Goldome’s “Think 12” deposit became “Think 10.”

By having the highest rate available on this product and doing comparative advertising in local newspapers against its com­petitors, Goldome was able to create an overall impression of being a high-rate institution. This image not only translated into a $650-million inflow in one year but has stood the firm in good stead since. Customers consistently offer rate as a key benefit provided by Goldome.

MeraBank has also learned the importance of image. Two years ago, the firm wanted to reconstruct its identity through a change in name. What’s in a name, you may ask? Plenty, according to MeraBank’s research. Consumers surveyed by tele­phone and by mail expressed a clear preference for dealing with a bank versus any other financial institution. A bank was con­sidered to offer a fuller range of services and to be more reliable.

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