Cleveland's Third Federal Savings went to the Ross Perot School of Marketing for its latest advertising strategy: the infomercial.
The $4.5 billion-asset thrift ran its 30-minute program several times on local television last month, giving consumers advice on handling their finances and offering special deals on CDs, home loans, and home equity lines of credit.
"I think that's really an imaginative approach," said Kevin Tynan of Tynan Marketing Inc., Chicago.
Though banks and thrifts have not widely used the oft-maligned format, "infomercials have just skyrocketed since 1992," when Mr. Perot's chart- filled talks rode the airwaves, Mr. Tynan said. "One of the reasons people are going to infomercials is you can measure how successful it's been."
Jeffrey Thompson, a consultant in the Chicago office of Towers Perrin, noted: "It seems to be something that's new and different that they'd be able to distinguish themselves in a crowded market."
The shows, which aired last month on Cleveland's ABC, NBC, and Fox affiliates on weekend afternoons, were hosted by local radio and television personalities Larry Morrow and Kim Scott. Third Federal chairman and CEO Marc A. Stefanski and other executives also appeared.
Three 10-minute segments explained issues regarding certificates of deposit, home loans, and home equity lines of credit. Each segment was followed by a Third Federal offer of a special CD rate for viewers, a rate- lock certificate for a home loan, or an equity line of credit rate cap.
"We're always looking for new ways to get our message across," said Monica Martines, Third Federal's marketing manager.
Although she would disclose neither the cost of the infomercial nor specific results to date, Ms. Martines said response had been "considerably better than what we had anticipated."
Infomercials have several advertising benefits, consultants said. For one, users can pinpoint expenditures, Mr. Tynan said.
He added that infomercials are an effective way to market unfamiliar products, such as a CD with an unusual term. "Infomercials offer a great opportunity for a bank to offer an off-term CD," he said.
Also, although Third Federal wanted to reach a broad audience, institutions can target market segments based on the times they schedule their shows, Mr. Tynan said.
Such shows also can give an institution an aura of expertise and leave viewers feeling that the bank or thrift wants to help them by educating them, not just transacting business, Mr. Thompson said.
The strategy's drawbacks include infomercials' somewhat tarnished reputation. The format is more associated with the Psychic Friends Network than with financial services.
"You don't want to look sleazy," Mr. Tynan said. "Most people are familiar with infomercials as offering sleazy products. But that's surmountable. (Banks) can convey credibility, authority, and leadership. It can enhance an image."
The shows must also be well produced to keep people watching, he said. Third Federal worked with an outside firm to produce the show and with a telemarketing company to take calls to an '800' number, Ms. Martines said.
"I think it's an interesting strategy," said a Cleveland-area competitor who has seen the show. "I applaud them for their initiative in doing something different."
He said that, while local financial institutions are watching to see what Third Federal accomplishes, they won't all necessarily jump on the infomercial bandwagon. Institutions must ask themselves whether marketing dollars are best spent on consumer education, the banker said, and whether infomercials fulfill true customer needs.
Credit card banks already have used the infomercial approach successfully, Mr. Tynan said.
"Hopefully, we would see more of this" from commercial banks and thrifts, he said. Financial institutions typically are too conservative to adopt new ideas quickly, he said. "I give these people a lot of credit," he said of Third Federal.