On Account of Image : Wells Fargo Has New Ads Up Its Sleeve
Ever since its hostile takeover of First Interstate Bank last year, executives at Wells Fargo & Co. have watched grudgingly as rivals from Seattle to San Diego hammered away at the company’s public image. Led by Glendale Federal Bank, the ad blitzkrieg poked fun at Wells’ big size and merger difficulties, contributing to a runoff of deposits and a precipitous decline in earnings and stock price at the San Francisco banking giant.
Now Wells Fargo is fighting back. The nation’s ninth-largest banking company is preparing new ads for states outside of California where the company has had a serious erosion of customers. The monthly attrition rate reached 1.5% of Wells’ accounts in the second quarter, contributing to the company’s 37% decline in earnings for that period.
Chief Financial Officer Rodney Jacobs said in an interview Tuesday that the attrition has since slowed to 1%, but that still means Wells is losing 30,000 accounts a month. That doesn’t include California or Texas, where Wells says it has seen a net increase in accounts, thanks largely to the proliferation of its supermarket branches.
Wells declined to comment on its new ads’ message or cost, but they may be patterned after a campaign launched earlier this spring in California.
In those billboards and radio spots developed by DDB Needham in Los Angeles, Wells departs from its traditional Western theme, forgoing its oft-maligned stagecoach for a more lighthearted approach. The ads aim to promote the convenience offered by Wells’ 24-hour services, such as automated teller machines, and telephone and online banking.
Until then, Wells advertising had been minimal as it struggled to integrate First Interstate and fix the glitches in technology that so riled many customers.
But Wells got plenty of publicity from rivals. While Glendale Federal has been the most aggressive, competitors in other states have also taken their shots.
In the Pacific Northwest, Washington Mutual, which recently acquired Great Western Financial of Chatsworth, poked fun at Wells’ traditional Old West advertising image. In Nevada, small banks ran ads that talked about how the check guarantee card--a program First Interstate had offered to cover insufficient funds on checks--had ridden off into the sunset along with the stagecoach.
Leslie Altick, Wells’ executive vice president in charge of corporate marketing and advertising, doesn’t deny that those ads hurt Wells. But she said Wells’ latest ads aren’t meant to be a direct response to them.
“We’ve been planning an ad campaign for a long time that talks about the advantages of ‘banking anywhere, any time,’ ” she said.
Expanding Benefits
Wells Fargo Bank and Union Bank, the state’s second- and third-largest banks, respectively, will join Bank of America in offering health and dental benefits to gay and heterosexual partners of employees starting in January.
The move by the three San Francisco-based banks was prompted by that city’s ordinance penalizing city contractors who do not offer domestic-partner benefits. BofA, the nation’s third-largest banking firm and the state’s biggest, in March became the first major U.S. bank to announce such a program, extending benefits not only to domestic partners and their children, but also to adult siblings, parents and grandparents who are dependents.
Neither Union nor Wells went that far. Wells has yet to disclose eligibility standards for domestic partners, but Union defined a domestic partner as an adult of the same or opposite sex who has lived with the employee for at least six months and is exclusively committed to and financially interdependent with that person.
Both Union and Wells said they were taking the step to retain and attract talented workers. Most companies that provide the coverage have found that only 1% to 3% of employees sign up. The low participation is in part because the benefits are taxable.
Times staff writer Don Lee can be reached by e-mail at don.lee@latimes.com
