Phh Corp. Making Its Pitch

March 31, 1995|By Kim Clark | Kim Clark,Sun Staff Writer

PHH Corp. grew into a $2 billion service company by selling its vehicle management, employee relocation and mortgage services to corporations and never cared whether Joe or Jane Consumer even knew its name.

Until now.

For the first time in its 39-year history, the Hunt Valley-based company has started advertising to the general public.

In tests planned to run through May, PHH is airing radio ads in Baltimore for its new Driver's One auto club, and radio and newspaper ads in Indianapolis for its mortgages.

Russ Miller, who heads the Driver's One effort, said PHH has tried to broaden its market beyond its corporate base in the last few years by selling its services to "affinity groups," such as nurses' groups and retirees' associations.

But the ad campaigns are "really our first step" in the general consumer market, he said.

"We're moving very cautiously and slowly in that direction," he said. "We don't want to lose focus on our core business, which is serving the needs of Corporate America."

Analysts cheered the move.

"I think it is a fantastic idea," said Alex C. Hart, who follows the company's stock for Ferris, Baker Watts Inc. in Baltimore.

Mr. Hart said that the company needs to broaden its market base beyond the corporate world, and that the test marketing is a logical move.

He said the entry into the consumer market may not only help PHH sell more of its services, but also boost its $38 stock price, which PHH officials feel does not reflect the company's value.

"They are just sticking their foot in the water," Mr. Hart said. If the tests drum up business, he said the company might then launch a more aggressive, more polished campaign.

In fact, PHH is barely putting a toe in the marketing waters to start with.

Rather than hire an agency, PHH employees wrote and placed both sets of ads.

The trials, which started early this month and will run through May, will likely cost the company only a few thousand dollars, company officials said.

Mr. Miller said he chose to test the campaign for Driver's One first in Baltimore, where it airs during rush hours on WBAL radio, so he can monitor the ads.

While the program offers the usual auto club benefits of emergency towing, maps and discounts, it also includes telephone access to PHH mechanics who help diagnose mechanical problems and monitor repair shops.

Although PHH has sold a few memberships ($69 a year for a family) thanks to the ads, its too early to tell whether the test is a success, he said.

"We don't have any great expectations. We just want to see what it's like," he said.

In Indianapolis, PHH's US Mortgage Corp. division, which until now marketed its mortgages only through corporate relocation services, real estate brokers and other middle people, has started offering them to the public. And these, too, come with a twist.

The nation's 19th-biggest mortgage company promises to take applications over the phone and give customers a decision within 24 hours or pay them $50.

If the company somehow misses the customer's closing date, PHH promises to cut the interest rate by one-eighth of a percentage point.

The "Phone-in, Move-in" program also has started slowly, but that may be because home sales are usually slow in the winter, company officials said.

The mortgage division chose to test the consumer market in Indianapolis because surveys showed that city had a strong home sales market, said Kristine Blomkvest, director of marketing and communications for the division.

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