KNOWING THAT IT CAN'T live on lending alone, New England's preeminent corporate bank is aggressively pushing its traditional lenders to market noncredit services.
With a pitch and a shove, Bank of Boston is encouraging its relationship managers to hawk cash management, trade finance, stock transfer, custody, and other corporate services to their loan customers.
The pitch: A bonus of up to $15,000 a year for cross-selling the fee-producing products and services.
$2,500 for Selling Six Products
Lending officers earn $2,500 every time they sell six new products -- from at least three separate categories -- that bring in annual revenue of $50,000.
Kevin Mulvaney, Bank of Boston's group executive in charge of national banking, said 108 of about 500 eligible officers took home cross-selling bonuses in 1992. He expects 140 to qualify this year.
The program is already leading to results on the bank's bottom line, according to Mr. Mulvaney. Revenues from noncredit corporate services in the second quarter jumped 12% from the year-earlier period.
And the proportion of Bank of Boston's total noninterest income from cash management, trade finance, and other corporate services soared to 45% from 25% 2 1/2 years ago.
In the second quarter, the corporation booked $136 million of non-interest income.
"We are taking market share from other banks," said Mr. Mulvaney, an executive vice president.
Mr. Mulvaney attributes the increase almost exclusively to the bonus program.
Bank of Boston instituted the plan not so much because it was shying away from lending, he said, but because it wanted to ensure that it was establishing well-rounded relationships with its corporate customers.
Practice Is Gaining Popularity
It is a trend that has taken hold at other banks as well.
"As a marketing strategy, it makes a great deal of sense," said Jack M. Meckler, a senior vice president at Littlewood Shain & Co., a consulting firm in Exton, Pa. "As long as you are calling on a company, you should talk about everything a bank can do."
Meanwhile, Bank of Boston is setting plans to expand its cross-selling program next year to reflect what Mr. Mulvaney calls a "total revenue approach."
Loan officers and their division managers will set individual and department revenue goals based on sales of 25 different products. Revenue goals will be set for each product as well.
"The goal-setting process will become much more dynamic," Mr. Mulvaney said. "Relationship managers will really think through the breadth of what we do."