Wachovia Corp., which prides itself on having invented "relationship banking" 25 years ago, is taking the strategy a step further, a senior executive told conference-goers here.

The Winston-Salem, N.C.-based banking company is realigning its sales force to serve the retail market based on the current or future profitability of customers, executive vice president Stanhope A. Kelly told American Banker's annual symposium on best practices in retail banking.

The initiative, dubbed "Pro" for Profitable Relationship Optimization, will involve 1,200 employees by yearend, Mr. Kelly said. Wachovia is drawing on a vast data base of information about its customers' financial needs and preferences to deliver personalized service to them, he said.

Already, Mr. Kelly said, the effort is bearing fruit. In three days last week, Wachovia bankers distributed 4,740 leads to a 150-member sales force that focuses on customers who are already profitable and are likely to remain so. Within days, 81% of customers had been contacted by a salesperson and one in four contacts resulted in a sale, Mr. Kelly said.

The early results suggest that "our share of wallet and customer retention are improving," Mr. Kelly said. Seventy-one percent of Wachovia's households are profitable, versus about 50% industrywide, he said.

A rich customer data base lies at the heart of the strategy. Wachovia's proprietary system lets the bank store up to 2,000 data elements per customer. The bank recently completed a conversion of the operational and informational sides of its data warehouse, Mr. Kelly said. Incoming phone calls from customers can be routed to one of three types of salespeople: personal financial advisers, personal bankers, or call center staff.

Wachovia, in keeping with its tradition, has its eye on customers who value having a relationship with a financial adviser. "Some customers are price-driven. We submit that is not our target customer," Mr. Kelly said.

Through a mix of sophisticated data mining and old-fashioned hand- holding, Wachovia hopes to persuade its most profitable and potentially profitable customers that it offers services of distinctive value, Mr. Kelly told an audience of nearly 600.

Although substantial analysis went into devising the new needs-based selling strategy, Mr. Kelly said Wachovia's customers can be broken down quite simply into four quadrants, based on their current and future profitability.

The cream of the crop-retail customers who are profitable to the bank and are likely to remain that way-are served by Wachovia's cadre of 150 personal financial advisers. These advisers are separate from the bank's private financial advisers, who cater to wealthier clients through the private bank. (See related article on page 15.)

The next group-less-profitable customers with high potential to become profitable-would be served by both personal financial advisers and personal bankers.

High-profit customers with declining profit potential-typically, retirees living on a healthy but fixed income-would be served by either personal bankers or the call center. Low profit, low-potential customers would be served by the call center or through direct mail.

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