The Art Of The Cross-Sell

This article appears in the February 13, 2012 issue of FORBES magazine.

Every financial services company tries to master “cross-selling,” offering pre-existing customers multiple products. Wells Fargo, which averages 5.9 products per customer in its retail banking business, does it better than anyone. The average household has roughly 16 products—mortgages, checking accounts, credit cards, 401(k)s, IRAs, various insurance policies and the like—across various financial institutions. Wells and its rivals compete fiercely to own as much of your wallet as possible.

“When I first became CEO, I got a call from another big bank CEO who said, ‘I’m coming through town. You guys are big in this cross-sell. I’ll buy you lunch. Tell me how you do it,’” recalls Wells Chief John Stumpf. “I told him, ‘I can’t eat that long and I can’t eat that much because it would take hours—days—weeks to talk about it.’” Stumpf was being polite: He’d as soon reveal his methods as Coke would the ingredients of its syrup.

The more services you sell to individuals, the more profitable those ­customers are (even with discount bundles for multiple services)—and the harder it is for them to break away. “We expect to sell at least one more product to every customer every year,” intones the company handbook. Competing divisions within the bank have a healthy incentive to cooperate with one another: Brokers need to make nice with retail bankers, say, because those folks’ clients are an easy target for mutual funds and retirement accounts.

On the institutional side the payoff is customers like Public Storage, a self-storage company with the $1.65 billion in sales, which has been banking with Wells Fargo since 1984, when it had $12 million in revenue. Today it uses the bank for primary lending, depository and trea­sury services, retirement plan administration and overnight investments; Wells also serves as a joint book runner and underwriter for Public’s preferred-share issuances. In the last 12 months Wells has helped provide financing totaling $2.3 billion.

“When things are good everyone wants to be your banker and lend you money,” says Public Storage Chief Executive Ronald Havner Jr. “It’s when things are bad you find out if you have a bank or not.” Wells has stuck by him because a known customer is a lot less risky than a new one.

If you’d like to learn much more about how cross-selling can benefit your business, you’ll want to attend the next Business Owner’s Club – “How to Cross Sell Services and Products to Boost Your Business”. For more information and to register, please visit

Leave a Reply