Wells Fargo was in an enviable position in early 2011. It had weathered the financial crisis better than most big banks; following its bargain-bin purchase of Wachovia, Wells was the nation's second-largest bank by market value.
In his annual shareholder letter that year, CEO John Stumpf boasted that the firm was coming off its second straight year of record profits.
He also heralded the bank’s success in boosting its fabled cross-sell ratio, a measure of its sales to existing customers. Households that banked at Wells Fargo now had an average of 5.7 products with the company, up from 5.47 a year earlier. Stumpf argued that the firm’s ability to cross-sell effectively represented a key edge over other banks.[…]‘Going for Gr-eight’
Kovacevich had two main audiences for his cross-selling mantra — investors and employees — and he understood how to speak to both groups.
First, he needed to convince investors that Wells Fargo was better than the rest of the banking industry at cross-selling, so that they would be willing to pay a premium for the company’s stock.
Wall Street was initially skeptical. After all, the banking industry had never been known for its sales prowess. Inside of banks, different business lines were often run in separate siloes. Many old-school bankers did not see themselves as salespeople.
“I never heard of a retailer who didn’t want customers coming to their store,” Kovacevich told the New York Times in 1993. “Yet you often hear bankers complain about people who waste their time, ask too many questions and get the carpet dirty.”
But by the mid-1990s, the industry was starting to change. Cross-selling was the new buzzword, and Kovacevich was its loudest champion. “He was thought of as a leader,” said Darryl Demos, an executive vice president at Novantas.
Over time Kovacevich’s message — we’re different from other banks – gained traction on Wall Street.
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