To sell more, BofA turns to existing clients
By Peter Rudegeair
(Reuters) - Bank of America Corp (BAC.N: Quote) is trying to solve one of the most difficult problems that big banks face: convincing reluctant employees to sell more products to current customers, who are themselves reluctant to buy them.
The bank says that in at least one part of its operations, namely administering 401(k) plans and related accounts for companies, it is making real progress. It attributes its success to pay incentives, working harder to zero in on the right clients, and training specialist sales staff.
In terms of the number of plans, it sold nearly three times more to clients in 2013 than it did a year before, said Bank of America spokesman Matthew Card. In the first year that it tried to attract existing banking clients of all sizes, the bank won 750 new retirement plans compared with the 263 plans it won in 2012.
"We set aggressive goals and this year for 2013 they hit all the goals," chief executive Brian Moynihan said on a January 15 conference call with analysts, referring to the business.
By other measures, its progress in selling retirement services has been halting. It won $14 billion of assets from existing clients last year, up just a touch from 2012's $13.9 billion.
Most of the 2013 growth came from selling smaller plans to smaller companies. The bank won 470 plans from these clients in 2013 compared to 70 in 2012.
Selling these services is complicated, but Bank of America's efforts are also critical as the second-largest U.S. bank tries to increase its revenue. It has a vast customer base - serving one out of every two U.S. households, for example - making it tough to win new customers. Instead, the bank under Moynihan is trying to win more revenue from existing clients, a practice known as "cross-selling."
For decades, banks have tried to cross-sell customers everything from insurance to wealth management in the hopes of boosting sales. What they often find is, employees used to selling one kind of product struggle to sell something different, and setting up systems to facilitate cross-selling can take some time. Continued...