Wachovia Corp. says a pilot program it started in three markets last April has produced hundreds of cross-sales to its wealthy customers, a source it had not tapped so energetically in the past.
The program, called the Wealth Client Partnership, assembled executives in each market from Wachovia's general bank and the wealth management, capital management, and corporate and investment banking groups to exchange leads to the wealthy clients each group has.
"This is a great opportunity for big revenues," said Stanhope A. Kelly, the head of wealth management at the Charlotte, N.C., banking company. "We are finding a lot of warm leads. … this is a great opportunity."
Mr. Kelly said at a media luncheon this month that the program - which is being tested in Jacksonville, Fla.; Charlotte; and eastern North Carolina - has already found 552 customers.
Anne Doss, the head of the Wealth Client Partnership, said Wachovia wants to take a holistic approach to clients with $1 million of investable assets and offer them access to investments, trusts, insurance, credit, and mortgages with the best service it can.
"Wachovia historically has been a good 'silo' organization, but we have never given our silos good and easy ways to work together," she said.
Ms. Doss said the key to the program's success is what Mr. Kelly called "warm leads."
"Having someone who knows the customer or prospect and presenting them to another part of the bank is crucial," she said. "It makes a huge difference when it comes to cross-selling."
Some analysts said Wachovia's timing for this cross-selling program seemed odd, considering that the North Carolina company is still completing its integration from the First Union merger. Ms. Doss said the timing was intentional, however.
"The timing of this with the merger integration is essential," she said. "Wachovia has taken a slow and steady pace at this integration. But we have to move quickly to take care of our best clients. They have to know that they are our focus."
The 2002 Phoenix Wealth Management Survey said that this is a good time for this sort of approach because more wealthy people are looking to professional advisers for help during in this difficult period in the markets. About 53% of wealthy people said they seek opinions from advisers when making decisions about money and investments, an increase from 46% in 2001. Seventy percent of this group said they follow their advisers' advice.
Some of the largest banking companies, including FleetBoston Financial Corp. and Harris Bancorp in Chicago, are using teams in an effort to increase wallet share among their wealthiest customers.
Patrick Keeley, the head of distribution for Harris' private-client group who is in charge of the company's cross-selling effort, said that using a team approach to cross-selling made the first quarter a record period for sales by the private-client group.
"People are purchasing more from us than they have in the past," he said. "We are able to meet needs by providing more than just one product."
A lot of institutions are realizing, Mr. Keeley said, that a silo approach to sales is just foolish.
"Banks have had the wind in their sails for a decade. It has been easy to make money because of such strong demand," he said. "Now, we have to work. Good companies need to know their clients. This … is a good model. It appeals to clients."
Henry Dickson, an analyst at Lehman Brothers who covers Wachovia, said the key to a good cross-selling strategy is simplicity.
"The key here is, Wachovia must keep it focused, keep it simple, and keep at it," he said. "It is hard to tell if it will be successful, but the reality is, they have to execute. Banks have to stay at it and offer the right incentives in order to grow their business from their own customer base. Everyone is still trying to unlock the key to how to get more business from their customers."
Ms. Doss said Wachovia's pilot program will end by July 31. Then Wachovia will spend a month analyzing it to determine where its effort should go in the future. The program has already been a success, she said.
"We are getting the right clients into the wealth channel, and we have done a good job helping wholesale, retail, and other areas find out who our customers are" in order to cross-sell to them, she said.
