Imagine McDonald's Corp. getting extensive media coverage for trumpeting that it was "ready, willing, and able" to make three billion hamburgers over the next few years.
Bank of Boston Corp. effectively did just that this month by announcing it was willing to make $3 billion in commercial loans to help jump-start the New England economy.
The result: An avalanche of favorable publicity, with virtually every media outlet in New England giving prominent coverage to the announcement.
Where's the Beef?
It was a classic example of how to play the media like a fiddle. While $3 billion in new credit admittedly had a nice ring to it, Bank of Boston did not make any firm lending commitments or announce any major initiatives to meet the target.
"It was a great piece of P.R.," conceded a senior executive at one of Bank of Boston's competitors. But he added: "Those inside our bank are viewing it with a certain amount of cynicism." Bank of Boston officials touted the announcement as a dramatic gesture for a region racked by recession, but even they acknowledged privately that it was more hype than substance.
The public relations coup was the brainchild of Robert Mahoney, who oversees Bank of Boston's corporate lending in New England.
The 43-year-old executive said he got the idea while attending a March economic forum for business customers in Springfield, Mass.
Against the Grain
Mr. Mahoney said the message from those attending was clear: Most doubted that New England banks were prepared to extend credit. "So we thought, What if we told them we were?"
After focus groups reacted favorably to the idea, Bank of Boston concluded it could get a lot of mileage by reaffirming its determination to make loans.
To get the maximum bang, the company set up press conferences in Boston, Hartford, and Providence and persuaded prominent business and political leaders in each city to attend.
Among them: Massachusetts Gov. William F. Weld, Boston Mayor Raymond L. Flynn, Connecticut Gov. Lowell P. Weicker Jr., and John Gould, president of Associated Industries of Massachusetts, an influential trade group representing state business executives.
In meeting with reporters, chairman and chief executive Ira Stepanian deftly pushed all the right media buttons.
In the blaze of television lights and popping flashguns, he predicted the $3 billion loan target would stimulate New England's battered economy and lead to the creation of as many as 50,000 jobs.
Pounding the Pavement
He said the company was committed to make 25,000 calls on business during the next seven months, and 2,500 on inner-city companies.
"The perception in the marketplace has been that banks have not been out lending," Mr. Stepanian said. "We want to change that perception."
The strategy worked. Newspapers and television stations jumped on the story, clearly tantalized by the $3 billion figure and the possible creation of as many as 50,000 jobs. It had been years since the region had heard such bullish economic news. Even The New York Times put the story on page 1.
"The credit crunch has been real in this region, and it was the first time in recent memory that a lender made a public effort to attract small-business borrowers," said William Castle, business editor of the Boston Herald. The Herald carried two stories on the announcement, one of which appeared on page 1.
Peter Phipps, business editor of the Providence Journal Bulletin, said: "There was some news value in pointing out that the bank was going to start lending again."
Lending Hadn't Ceased
But, if the truth be told, Bank of Boston had never stopped lending. Last year, for example, the company made $800 million in new loans.
What's more, most economists expected the New England economy to start rebounding this year, so it was hardly surprising that Bank of Boston's loan demand also would pick up.
The projected $3 billion in new loans will not be offered on better terms than are already available, nor will the company have to take special steps to raise the funds to make them.
Risk of a Backlash
Admittedly, Bank of Boston might have taken a political risk in announcing the $3 billion lending target. If it rejects a substantial number of applicants as uncreditworthy, the company faces a serious backlash.
"We'll have to watch this situation as it develops," said Rep. Joseph P. Kennedy 3d, who attended the company's press conference in Boston.
"We'll be looking forward to hearing from businesses ... about their new access to credit."
But Bank of Boston insists that won't be a problem. The company said a toll-free line it has established has already yielded about 1,700 inquiries. In fact, based on the strong response, the company said it might actually exceed its $3 billion target.
However, Bank of Boston can expect some tough competition for the business. Its main rivals - Shawmut National Corp. and Fleet Financial Group - are also in high gear scouting out new customers.
But Shawmut's and Fleet's efforts are not as widely known.
After all, they didn't call press conferences.