Monoline companies have been the darling of our industry in recent years. Working with products that were once highly fragmented, they quickly built significant market share - and achieved huge profits and growth rates.

Many banks have worked hard to emulate the monoline success in credit cards or mortgages, but few have succeeded.

The bloom has come off the rose in recent weeks, with the problems at First USA and their impact on Bank One's profits, as well as the woes of Advanta and other previously high performers. Nevertheless, many monoline companies are still extremely effective; these include Capital One, MBNA, and Countrywide Mortgage.

Why have some monolines succeeded where others failed? How come none of them have solved the cross-sell riddle?

Monoline companies have been the envy of the industry because of their ability to sell a single product to a large group of people. I think they succeeded only when the product was simple and not relationship-oriented.

Credit cards are a prime example. Many card customers do not even know who the originators and owners of their cards are. MBNA has built a huge business on that premise - using affinity groups to market cards but keeping the balances and customers on its own books.

Similarly, mortgage customers to not think of them as relationship-based products. They are one-offs, sold in highly targeted fashion by companies using sophisticated database marketing models and continuous-learning programs.

At any given time, First USA and Capital One have over 10,000 tests going on concurrently to refine their value proposition and targeting. They have done a good job of capturing and expanding market share among attractive customers, at least until recently. What these and other successful monolines have not been able to do, however, is effectively cross-sell additional financial products.

Cross-selling, done well, is a great tool for retaining customers and building profits. It can also increase a customer's value to the company - and the company's value in the eyes of analysts.

But monoline companies that have attempted cross-selling to their single-product customers found their brands lacked clout. Even such strong ones as Money Store and Advanta failed (the companies wound up creating several single-product selling machines to sell mortgages, insurance, and SBA loans, among other products). And weaker brands did no better.

I'll say it again: The reason for this failure is rooted in the monolines' lack of relationship orientation and customers' indifference to the brand. It's not merely an execution problem.

If the monolines want to build more from their customer base, they need to work from a new blueprint.

Ms. Bird, an executive vice president of Wells Fargo Bank, is based in Sacramento, Calif.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.