October 4, 2016
In my career as a marketer, I have had the opportunity to work with over a dozen banks, ranging from local community banks to regional banks, and even a well-known national player. Along the way, I became an admirer of Wells Fargo. I thought their mission, focus on understanding customers, and prioritization of customer’s needs was right on the money. I also admired their marketing sophistication as they adopted technology early to get a whole customer account viewpoint. Years before other competitors, they seized on this information technology advantage and established “winning customer share of wallet” as a priority KPI.
“Winning share of wallet,” or getting multiple account relationships per customer, is not an unethical goal. As the theory goes, if you satisfy customers’ needs, they will reward you with additional business. In banking, a checking account is an entry point. Banks much prefer to build upon that demand deposit account (a liability on their balance sheet) with new, margin-generating assets such as a personal, home equity or business loan. So what went wrong at Wells Fargo?
It is clear that winning customer’s share of wallet morphed into an out-of-control, cross-selling culture. This culture was fueled by incentives to employees and pressure to get results, even at the expense of customers. It was also stimulated by the use of the legacy business model that the largest public banks decided to continue with in order to keep profits growing and shareholders happy.
Dinging their less-sophisticated customers with fees became a profit center. But this approach only covered up deeper problems that large banks like Wells Fargo must deal with such as: a) supporting a large bureaucracy and brick and mortar infrastructure; b) adapting to lower net interest margins in a post-Great Recession rate environment; and c) investing in technology to compete with disrupters and to comply with regulatory and bank security challenges in a hacker’s world.
Tough problems, indeed. But the stated values of the bank were not operationalized throughout and a “profits before people” disease has now severely compromised the brand value of the company.
Now, reports by groups such as the Consumer Financial Protection Bureau are revealing that fraudulent practices, like those used by Wells Fargo, are also being used by other banks to protect profits. It doesn’t matter that Wells Fargo executives have pointed out that only a very small fraction of customer accounts had been affected; the damage to the brand is done and maybe irreversible.
Wells Fargo has fallen from high heights. In 2015, it was one of the world’s largest companies in market value. It was cited by BrandFinance as the world’s most valuable bank brand. Apparently, Wells Fargo got too big to value its customers.
The fear of Amazon's size and market share is spreading throughout an increasing number of industries. CEO Tom Sull… https://t.co/zr4VO8dwGe
February 14 - 2:40 pm - View on Twitter
In continuation of Princeton Partners' Women in the Workplace blog series, our Human Resources Manager Jan Sullivan… https://t.co/PJce3RlNQ8
February 6 - 6:05 pm - View on Twitter
Our CEO Tom Sullivan will be putting on his dancing shoes to raise money for Young Audiences, a non-profit organiza… https://t.co/hHJBvDhnj3
January 30 - 9:32 pm - View on Twitter
In a continuation of Princeton Partner's "Women in the Workplace" blog series, Account Executive Leigh Cesanek disc… https://t.co/q4PvOrnyBI
January 23 - 4:21 pm - View on Twitter
RT @Healthy_Newark: Thank you @SullyNJ from @PPIGargoyle for this blog written after our big "Building a #CultureofHealth in #Newark" Confe…
December 19 - 9:28 pm - View on Twitter
#InsightTuesday Creative Director Paul Federico reflects on some fundamental issues that prevent equality from prev… https://t.co/meuPy6SHd0
December 12 - 7:34 pm - View on Twitter
After news of the Aetna and CVS merger, CEO Tom Sullivan offers insight into why your health insurance and drug sto… https://t.co/ej2PCH8D8s
December 5 - 8:51 pm - View on Twitter
Check out our Halloween video reel and kit to throw your own Gargoyle-style X-Files party. Have a ghoulish day! https://t.co/mpyjRzBCkr
October 31 - 2:04 pm - View on Twitter
Check out what CEO Tom Sullivan learned from his visit at Google's Headquarters. #InsightTuesday https://t.co/kRSouiJHnH
October 24 - 7:33 pm - View on Twitter
VP Chris Sullivan reflects on the importance of marketing with a cause from this weekends Global Citizen Festival: https://t.co/YdfEZ9Ar8p
September 26 - 8:03 pm - View on Twitter
After a productive summer at PPI, Producer Dennis Nobile offers 3 keys to creating exceptional branded video content:https://t.co/CXAMYt6AHj
September 19 - 7:06 pm - View on Twitter
Our CEO reflects on the news coverage of the country’s recent superstorms and provides insight on what comes next. https://t.co/rzDH0AQeb8
September 12 - 8:05 pm - View on Twitter
#InsightTuesday Our CEO discusses a lesson he was reminded of while gardening with his granddaughter. Check it out: https://t.co/GR9GCJSZMZ
August 29 - 7:43 pm - View on Twitter
It's the #Eclipse2017 edition of #InsightTuesday, & we're discussing great marketing plays on yesterday's event.… https://t.co/QIP5Ozyco1
August 22 - 7:55 pm - View on Twitter
Our CEO discusses Coca-Cola's latest strategic business move and offers three lessons marketers can learn from it: https://t.co/2ciuRZ5lrK
August 15 - 8:44 pm - View on Twitter
Account Exec. Leigh Cesanek offers insight into how B2B companies can utilize Instagram's powerful platform. https://t.co/ezWZ4EQIP4
August 8 - 5:40 pm - View on Twitter
Need a laugh? Assistant Account Manager, Andrea Janiszewski provides insight on the power of humor in advertising.… https://t.co/RCcSSvyOLH
July 25 - 7:20 pm - View on Twitter
CEO Tom Sullivan offers insight on Amazon’s power in the market and what small businesses can do to stay competitiv… https://t.co/eDgg7jDaCc
July 18 - 8:35 pm - View on Twitter
Seeking a fall internship? Check out opportunities with Princeton Partners! We're #hiring. https://t.co/TW5NdTLd9c
July 18 - 7:28 pm - View on Twitter
#InsightTuesday Creative Director Tim Burr discusses an important strategy to achieve positive social change. https://t.co/7CQHFuBIbE
July 11 - 9:49 pm - View on Twitter