Washington Mutual Banking on Folksy

Although it owns Great Western Bank and American Savings, Washington Mutual has kept a low profile with California consumers. But that is about to change.

The Seattle-based thrift is using a combination of special deals and folksy advertising to make a name for itself in California, as it begins to convert the hundreds of branches it owns in the state to the Washington Mutual name.

In doing so, Washington Mutual hopes to duplicate in California a strategy that worked for it in the Pacific Northwest, where it successfully tapped into bad feelings consumers have about banking.

But observers said that Washington Mutual, which is in the process of acquiring Home Savings as well, is taking a risk in discarding names familiar to generations of Californians.

“Because they call themselves Washington Mutual, they are going to be seen as strangers and not local,” said Michael J. Kamins, a marketing professor at USC.

Washington Mutual, which on billboards around California depicts itself as a friendly new neighbor, said its research shows that service means more to consumers than a name.

“What we discovered is that at the end of the day it doesn’t matter to consumers what name is on the door, as long as they receive service,” said Brad Davis, Washington Mutual’s senior vice president for marketing.

Beyond that, Washington Mutual learned through 26 focus groups in California and Florida, where Great Western also has branches, that consumers were familiar with Great Western, but did not have a strong emotional attachment to it.

Washington Mutual’s television ads, which will begin airing next week, strive to give the thrift a friendly, approachable image. In the quirky campaign, which will also run in the Northwest, fictitious customers display an evangelical zeal for the bank.

The second piece of Washington Mutual’s strategy is free checking, which it used successfully to build deposits in its home state. Davis said free checking is more effective than CDs--another lure used by thrifts--in attracting customers who use other bank services.

A free checking account offer by Great Western and American has attracted 175,000 new accounts during the first five months of 1998, Davis said, helping to offset lost CD accounts. Deposits in California and Florida declined to $39 billion in March from $39.1 billion in December 1997.

The Washington Mutual ads, from McCann-Erickson in Seattle, invite consumers to “let us make a fan out of you.” In one TV ad, enthusiastic customers wearing cheerleading uniforms perform clumsy routines outside a Washington Mutual branch.

Outdoor ads attempt to familiarize consumers with Washington Mutual’s logo while inviting consumers to “join the club.”

“If you show you care, people will come over to you in droves,” said Tom Hollerbach, chief executive of BBDO in Los Angeles, which created ads for Glendale Federal attacking impersonal service at bigger banks.

But UCLA marketing professor Margaret Campbell said Washington Mutual’s “join the club” message could be misinterpreted. “A club can be a nice thing, but it can also be exclusive,” she said.

To reinforce the neighborly image presented in its TV ads, Washington Mutual said it has trained branch employees extensively. Davis said compensation for branch employees is based partly on the results of quarterly inspections by undercover “mystery shoppers,” who check to see that service is up to snuff.