A CARD IN EVERY WALLET The bottom line is that "get our current customers to sign up for 7 more products" approach will run its course and they will need to shift focus. WFC could actually attain this goal, say in 10 years (I have my doubts). Or, the run-off of customers will make Dick K. tweak his approach. There's nothing wrong with gaining new customers Dick -- some of those could end up being preferred, high balance customers. The "go for gr8" strategy can be hampered by customer atrition because of hard-selling? The sales culture could sour the intended result when reps dish out desperate attemps to book a sale. Customers are not fools (at least part of the time).
FEE STRUCTURE It's meant to be a deterrent for people who can't reach the balance hurdle(s). The feeling I get is that fees (at least some) are not well disclosed and people who don't meet balance tiers (in general) want to leave when they find out or don't open new accounts at all. Is this ultimately wise?
DID MARK TWAIN SAY IT BEST? The fact is that cross-selling is not easy at all. Even when WFC succeeds at bringing in and nurturing high-balance customers, these people become too valuable to loose (a sort of concentration of assets). If WFC cannot ward off atrition, what will happen when too many of their customers become high status? Talk about putting all of your eggs in one basket (a Mark Twain reference from an annual report).
IT'S A DIFFERENT STRATEGY Dick Kovacevich (he seems like a nice enough guy) will be gone from Wells Fargo by the time anyone knows if the strategy can really be sustained and replicated at other financial service companies in the long term.
"Or, the run-off of customers will make Dick K. tweak his approach. "
This has already happned. Now customer retention is part of the bonus plan for every level of the retail bank, from the tellers on up. Not only does this give everyone a financial incentive to focus on retention, but having anything as part of the bonus goal causes team members to focus more on it (it becomes part of a competative score card, etc.)
". There's nothing wrong with gaining new customers Dick -- some of those could end up being preferred, high balance customers. The "go for gr8" strategy can be hampered by customer atrition because of hard-selling? "
Yes definately the go for gr8 strategy can be hampered by hard selling. The technique has to be right selling, finding out what the customer wants and needs and show the customer the value of doing that with wells fargo. Wells Fargo can grow almost tottaly by canabalizing the business of other financial services providers.
"The fact is that cross-selling is not easy at all."
Yes exactly. Thats why Well's is doing it, because its so hard to do its so hard to copy.
"Even when WFC succeeds at bringing in and nurturing high-balance customers, these people become too valuable to loose (a sort of concentration of assets)."
This is a weak point. First of all a customer with more products has a increasingly less chance of leaving, and you spend less selling that same customer your additional products then if you sold each product seperately to seperate people with its own stores, advertising campaigns, etc. Besides that, the customer buying a diversified product set from you stablizes your earnings through different economic cycles.
" There's nothing wrong with gaining new customers Dick -- some of those could end up being preferred, high balance customers."
Remember you make more money off a lower segment customer bringing you all their business then you do with a guy with just a checking account with a million dollars in it.
Thanks for the replies. I like what PRIMETONAL has to say. It is somewhat of a niche strategy, wouldn't you say? Somebody has to do it...and do it right. I would have to say that they are probably the best at it, so far. But the size of WFC compared to others...even if they do it better than anyone else, they're still smaller. Will WFC's success in cross-selling have a big enough impact for it to continue to stand alone?
Cross-selling isn't easy? It's got to be easier than making an original sale. I would think getting someone in the door would be more difficult than trying to sell another product to a person that is already a customer. I mean, if they say NO to a second product the first time, they still are going to be in contact with the bank for service on their original product. If they like the relationship enough, the customer will give you his/her business.
Back in the 70's I worked in a branch bank, we had great tellers and no ATMs... but one teller stood out. She was always being asked by new customers where to shop, who would be a good babysitter, and occasionally what should they do with this or that financial need. She would recommend our bank if we had the product... but, the key here is she was always positioned to be able to refer a potential customer. Selling is a full time job. That is true in every walk of life, we're all selling and those of you who are embarrassed about it, or concerned that customer service levels have fallen below your 1950's, 60's or 70's expectations should move your accounts and get out of the way.
Go WFC, great service (albeit 21st century), great employees and a great stock!