Author Topic: WFC - Wells Fargo  (Read 365325 times)

Cigarbutt

  • Hero Member
  • *****
  • Posts: 1744
Re: WFC - Wells Fargo
« Reply #1110 on: September 10, 2019, 07:43:54 PM »
^Another objection to Jurgis' technical argument. :)
Something that (hopefully) WFC has learnt when pushing the envelope with the excessive culture of cross-selling is that an essential foundation of customer stickiness and associated retail profit per customer is simply the number of 'products' that the client holds, up to a certain degree.
https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/cgri-closer-look-62-wells-fargo-cross-selling-scandal.pdf
Build the products and they (the $) will come. See page 10.


DooDiligence

  • Hero Member
  • *****
  • Posts: 1887
  • ♪ 🎶 ♫ ♪ 🎶 ♫
Re: WFC - Wells Fargo
« Reply #1111 on: September 11, 2019, 05:57:40 AM »
^Another objection to Jurgis' technical argument. :)
Something that (hopefully) WFC has learnt when pushing the envelope with the excessive culture of cross-selling is that an essential foundation of customer stickiness and associated retail profit per customer is simply the number of 'products' that the client holds, up to a certain degree.
https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/cgri-closer-look-62-wells-fargo-cross-selling-scandal.pdf
Build the products and they (the $) will come. See page 10.

Thanks for another very informative report to be aware of.

Is there a point of diminishing returns in the number of products that a customer is enrolled in?

1. mortgage
2. auto loan
3. checking
4. savings
5. IRA / retirement
6. brokerage
7. credit card(s)
8. LOC
9. commercial account(s)
10. Star Rewards (wait, that's Starbucks...)

---

edit: Seriously, I guess there's only so many products that a bank could or should be selling & I forgot insurance.
« Last Edit: September 11, 2019, 05:59:13 AM by DooDiligence »
Healthcare 25.9% - CVS EW NVO // BRK.B - 23.1% // Auto's & Oil 15.0% - CLB GPC VDE

Entertainment 4.8% - DIS // Banking 9.9% - WFC // Drinkers & Smokers 4.9% - MO

%'s held @ MV 08/29/2019 minus 16.4% investable cash

i trumpet my ignorance

https://twitter.com/tunawish

Cigarbutt

  • Hero Member
  • *****
  • Posts: 1744
Re: WFC - Wells Fargo
« Reply #1112 on: September 11, 2019, 09:21:55 AM »
...
Is there a point of diminishing returns in the number of products that a customer is enrolled in?

1. mortgage
2. auto loan
3. checking
4. savings
5. IRA / retirement
6. brokerage
7. credit card(s)
8. LOC
9. commercial account(s)
10. Star Rewards (wait, that's Starbucks...)
---
edit: Seriously, I guess there's only so many products that a bank could or should be selling & I forgot insurance.
The loyalty programs seem to be gaining traction in the evolving landscape defining how to 'acquire' and retain customers. Banks are building in-house teams and outside help is increasingly available. It seems that the investment is warranted.
Banks are going through some kind of transition and have done relatively well despite frequently described poor customer experiences (especially 'big' banks) but there are some technology-related entrants that will force them to invest where it counts. The young adults in my households literally get bombarded by all kinds of offers that often include a reward component. Most of the offers go through the technology route but I'm told that the financial institutions also pay for pizza (and beer) at university-based extra-curricular 'teaching' sessions. There are significant tangible and intangible switching costs but one has to acquire the customer first.
I have some interest in loyalty programs and here are some references related to the banking sector.
https://www.mckinsey.com/industries/financial-services/our-insights/customer-mindshare-the-new-battleground-in-us-retail-banking
https://www.ttec.com/sites/default/files/white-paper-banking-total-relationships.pdf
https://www.wellsfargo.com/go-far-rewards
Summary: Megabanks have work to do but the long term is bright in terms on their ability to move from front of wallet to share of mind.
I've really liked WFC but it seems that they have to learn, like Mr. Buffett, to lose the arrogance and continue to be ruthless with a smile. :)

To your question about potential diminishing returns, a loyalty firm that I've followed for a long time had the following title to one of their annual reports: The sky is not the limit.
« Last Edit: September 11, 2019, 09:29:13 AM by Cigarbutt »