COLUMBIA, S.C. - Gerry Baker is a big guy. He rides a big Harley Davidson through the Carolina hills on weekends. And he spends the rest of the week running a big mortgage company.
But Mr. Baker isn't hung up on size. He doesn't just want to make Fleet Mortgage Group, of which he has been chief executive since November, even bigger. He has already served an apprenticeship at Countrywide Credit Industries, the nation's largest home lender.
He wants instead to make Fleet the most profitable mortgage bank in the country.
And he believes he has the right credentials to get the job done. He wants to sell Fleet Mortgage's current customers as many different products as possible and his background in marketing financial services should help him get the job done. A major challenge, he says, will be to get Fleet's technology up to speed so it can support the cross-selling effort.
As he sat in his spacious office recently - next to a photograph of himself with his wife and his "hog" - Mr. Baker said: "What we need to do is find better ways to understand what the customer needs, serve that customer, and sell them other products. Everyone says they want to cross- sell, but no one has ever been really successful at doing this."
Mr. Baker emphasized that technology is the main ingredient in effective cross-selling.
A lender needs technology to manipulate its customer lists and profiles to sell customers exactly what they need, he said. This kind of profiling increases the chances the customer will buy either a home equity line, an auto loan, or insurance, for example.
But Fleet is about a beat behind other lenders in the technology race.
So Mr. Baker has surrounded himself with technologically savvy people. And he subscribes to Byte magazine, which he proudly displayed on a table in his office. He did admit, though, that he doesn't always understand what he reads in it.
Mr. Baker's background is in marketing, not technology. He was hired for his current position last November after spending five years at Countrywide as managing director in charge of production and marketing.
Before that, he was vice president and director of marketing at Bank of America from 1983 to 1989. Earlier, he was president and partner at a marketing, advertising, and public relations firm. This background accounts for his big plans for marketing products to Fleet's customers.
Another important component of an effective cross-selling program, Mr. Baker said, is a strong bank parent that offers a diverse menu of services and products that can be marketed to customers. He says a mortgage company needs a parent behind it that offers other products.
Certainly being large hasn't hurt Fleet. It bought $15 billion in servicing rights from Household International Inc. in May. In March, it bought Plaza Home Mortgage. The two acquisitions brought Fleet's servicing portfolio to $105 billion, the third-largest in the country. Mr. Baker said Fleet is finished with acquisitions for 1995. Unless, of course, a good opportunity comes along. Then, he said, the company will find a way to pull it off.
Is Mr. Baker equal to the task? Mr. Baker's former boss, Angelo Mozilo, vice chairman and co-founder of Countrywide, said he taught Mr. Baker everything Mr. Baker knows about the industry.
Told this, Mr. Baker chuckled. "Well I taught him everything he knows about marketing," he retorted. "He certainly gave me an opportunity to learn everything about the business," he said of his mentor.
Now the former colleagues are competitors, both running mortgage companies that are among the top three residential lenders in the country. Mr. Baker insisted, though, that his goals for Fleet are internal and he is not in direct competition with Countrywide.
"I do want to be in the top three to five companies, but I want us to be the most profitable. I think that will come from our continuing investment in technology, our marketing acumen, and our ability to realize the cross- sell revenue and profit potential we know exists. If we can do those things, I think we have a good shot at rising to the top in profitability."
One area he said he plans to explore more in 1996 is affinity lending. For a mortgage company to be profitable, it cannot be one-dimensional, he said, and should explore new options.
"When I say I think at some point in time our branches will do auto loans, that does cause people to pause. But I think we need to think in those multidimensional terms," he said.
Yet Fleet does not have a computer system for its front office operations. During the refinancing boom of 1992 and 1993, Fleet originated and serviced all loans manually.
"I'm sure, I'm confident that we underperformed in that time frame because we didn't have the technology in place to originate loans faster. That's something that is being corrected," Mr. Baker said.
In late 1993, Fleet Mortgage hired Robert Golitz away from AT&T Universal Card Services for the No. 2 position of president and chief operating officer - primarily because of his heavy technology background.
While it was reported that Fleet Focus, a survey of bank operations to identify cost-cutting opportunities, put technology expansion on hold, Mr. Baker said it actually brought the pressing need for technology to light, pushing plans for technology ahead.
"We clearly got on the technology bandwagon late," he said. "But the good news is that we are using state-of-the-art technology, and the system we will have in place will be at the top of the pile, not the bottom of the pile."
The new technology, once in place, will help Mr. Baker achieve his goal of running the most profitable mortgage company, he said.
One of the primary reasons he joined Fleet, he said, is the close relationship between the bank and the mortgage unit, which makes it easier to sell the bank's products to mortgage customers.
One way Mr. Baker plans to get information about other products to customers is with a monthly billing statement Fleet started sending to customers in May, rather than a coupon book for multiple payments. This way, he said, the customer gets information from Fleet on a regular basis. In August, he projected, all Fleet mortgage customers will receive a monthly statement detailing current balance, payments received, and interest paid to date.
"But more importantly," he said, "it gives us an ongoing opportunity to communicate with customers, just like a bank does with checking customers." Fleet has updated its customer files to include demographic data and lifestyle information.
