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Bye Bye, GMAC: Will ‘Ally Bank’ Work or Not?

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By Jodi Xu

If you are going to name a bank, it’s gotta be something big and strong like “Security First Trust and Federal Reserve.” And you have to name a bank that because nobody’s gonna put their money in “Fred’s Bank.” “Hi, I’m Fred, I have a bank. You got $1500? …ahhh, I’ll put here…in my white suit.” Steve Martin

At a time when banks have acted more like customers’ antagonists rather than allies, one bank is trying to prove otherwise, at least with its new name.

Today, GMAC Bank, owned by GMAC LLC, switched its name to Ally Bank.

It is a reasonable approach, given the word’s meaning–that of supporter, assistant or helper. And GMAC has been so mired in troubles that a name change makes sense. But will ‘Ally’ do the trick?

“The name itself is great. It simply said ‘I want to work with you and help you,’” said Rick Barrera, brand consultant and author of “Overpromise and Overdeliver: The Secrets of Unshakable Customer Loyalty.”

But years of experience with banks has made many customers wary, Barrera said. On a day-to-day level, customers have grown fed up with hidden checking-account fees and elaborate mortgage fine print. That doesn’t even begin to reflect anger over the huge bank bailout and financial crisis.

“It’s like walking down the dark alley with your arms up,” Barrera said.

“This is why we are building a better bank.” Ally’s freshly revamped Web site said this morning.

The name change had been mulled since June, as the company tried to appeal to a broader range of customers. “We want a real word that powerfully portrays who we want to be,” said Diane Morais, head of deposit and innovation of GMAC Financial Services, which will keep its name.

Its mission, according to the Web site: “A bank that values integrity as much as deposits. A bank that will always be open, accountable, and honest. Yes, honest. We won’t deal in half-truths, kindatruths, or truths only buried in fine print. That’s because we don’t have anything to hide. We’re always going to give it to you straight.”

The campaign raises the stakes for GMAC. “It’s a great promise, but the question is whether it can deliver,” Barrera said. “If they are able to live up to the promise, they will win huge market share very soon, especially in a down market when people are really watching their money.”

In order to build customer loyalty, Morais said, the bank has introduced round-the-clock customer service, a no-penalty certificate of deposit and new explanations of financial terms — such as compounded interest – in very simple language.

What happens if Ally falls short? “A brilliant marketing strategy with a great name like this will blow up in their face. People will be like ‘Is this what they claim of being an ally?’” Barrera said.

Link: http://blogs.wsj.com/deals/2009/05/15/bye-...nk-work-or-not/

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