LYNN, Mass. - Once booming as a port and a shoe-manufacturing town, this working-class city north of Boston has seen better days. Its downtown is dominated by dilapidated buildings, empty lots, and a central square seemingly unchanged from the 1950s.
A few blocks from the square, across from a vacant building on Market Street, stands the headquarters of Eastern Bank Corp., a mutual thrift that refuses to be left in the dust by its competitors and refuses to go unnoticed.
The $2 billion-asset company is spending nearly $1 million to advertise on Boston's three network television affiliates, an unusually risky venture for so small an institution, marketing experts say. Eastern is out to prove that the size of the balance sheet doesn't matter as much as the size of the ad budget.
Created in 1981 from the merger of two $250 million-asset mutuals, Salem Savings Bank and First East Savings Bank, Eastern has taken advantage of state law to build a strong commercial bank with a mutual thrift charter. State law blurs any differences in powers between state banks and thrifts.
"We are the local commercial bank, and that's what we strive to be," said president and chief executive Stanley Lukowski.
But officials at northeastern Massachusetts' largest independent institution have been frustrated by routinely spending "the first 20 minutes of a phone call explaining who Eastern is," Mr. Lukowski said.
That's because while Eastern is the descendant of two old institutions, its own name and reputation are relatively new. So officials have struggled to educate the public and the market about what the thrift offers.
Though it has grown steadily in asset size and branches, the company's locations outside Boston and its mutuality have kept it off the radar scope of Boston's media, financial analysts, and general population.
After more than a decade of quiet growth, officials are turning to television in an expensive but so far successful strategy to give Eastern a "brand name" and recognition.
Eastern's quest began soon after the 1981 merger, when officials decided that they needed to diversify to survive.
Beginning with its purchase of state-chartered Naumkeag Trust Co. in 1983, the company has quadrupled its asset size through five acquisitions, most recently when it bought Saugus Bank and Trust Co., a small commercial bank with three branches in the small business district on Route 1 just north of Boston.
Its 31 branches are concentrated in a 25-mile strip running north from Boston toward the New Hampshire border, through an ethnically diverse market of about one million people.
"Eastern is an interesting example of the evolution of what used to be a fairly typical small-scale community bank into one of the major players in its market area," said Robert Fichter, executive director of the Massachusetts Bankers Association.
With its initial growth period behind it, Eastern is ready for more people and businesses to look its way when they want to switch banks.
"We can provide any of the services that the large regionals can, but with a community bank focus," Mr. Lukowski said. "But people didn't know we could do that. The customers who don't know us think of us as a new bank. So the focus has been to try to get a brand identity out there so people know who we are."
Focus groups conducted in 1993 paved the way for the thrift's new image. Small-businessmen expressed frustration over being shifted from one loan officer to another at larger institutions and complained about their former banks being bought by distant giants.
"They didn't know who to call to talk about their loans," Mr. Lukowski said. "We don't know how many customers we've gotten from that."
Starting with two television ads running on Boston's network affiliates in the fall of 1993, Eastern launched a massive newspaper, television, and billboard advertising campaign to spread its name as the local, stable community bank serving the small communities north of Boston.
The first commercial shows a panoramic view of the North Shore suburbs of Boston, with Eastern portrayed as the neighborhood institution, contrasting itself with its larger competitors in nearby Boston.
The second commercial trumpets the slogan "Our paperwork moves. Our loan officers don't." It stresses the consistency of dealing with Eastern's loan officers, who have worked at Eastern for more than 10 years.
"They know we're going to be here next month, next year," Mr. Lukowski said. "A lot of independents have been purchased by the Shawmuts and Fleets."
Eastern's decision to advertise on television surprised some marketing experts, however. They described it as very expensive and unusual for small institutions in a major television market like Boston.
"Local institutions can beat the big houses any number of ways in a local market, but big media is generally not one of them," said David M. Partridge, a marketing specialist for Towers Perrin in San Francisco. "Someone's made some tradeoffs there, and they've come up with a very unusual answer."
On the other hand, Kevin B. Tynan, president of Tynan Marketing Inc. in Chicago, said that if a small institution can afford such a saturation campaign, it could be an effective way to develop a large corporate image.
"TV advertising offers some real benefits for small institutions," he said. "It puts them on the same level as their big competitors."
Since the ads started, Eastern has received more calls from potential customers, and officials no longer spend time explaining who they are. The thrift is holding another round of discussions to develop a third television commercial.
"We've seen some very positive results," Mr. Lukowski said. "Before we were a strange name, (but) our recognition and our image in the business community have been significantly enhanced. It has accomplished our objectives, and we will continue with the TV ads in the future."