Wells Fargo dumps toxic ‘cross-selling’ metric

Posted at 10:13 AM, Jan 13, 2017
and last updated 2017-01-13 10:13:08-05

Wells Fargo used to brag about its immense “cross-selling” skills, boasting of the many checking accounts, ATM cards and other “products” it pushed on Americans.

And then the Wells Fargo fake account fiasco happened — and cross-selling became a bad word throughout the industry.

Attempting to turn the page on the biggest banking scandal in recent years, Wells Fargo announced on Friday it has eliminated the notorious metric altogether.

“As part of this evolution, the cross-sell metric will not be included going forward,” Wells Fargo said in its quarterly earnings report.

It represents a dramatic reversal for a bank long proud of its ability to forge long-lasting relationships with customers by tying them to the bank with so many accounts that it would be difficult to switch to another lender.

Just a year ago, the word “cross-sell” appeared five times in Wells Fargo’s earnings report. The bank mentioned it eight more times in a presentation to Wall Street. The key message Wells Fargo wanted to drive home to its shareholders: the bank averaged an impressive 6.1 products per household, far better than the rest of the industry.

Wells Fargo wasn’t satisfied with that though. For years, management had been pushing the “Gr-eight initiative” — an internal goal to sell at least eight financial products per customer.

The problem is that in trying to meet this lofty — many would say unrealistic — goal, employees felt pressured to engage in shady and illegal practices. Some Wells Fargo workers went so far as to make up fake email addresses like “” to sign up customers for online access to accounts. Others turned to “pinning,” the practice of assigning PIN numbers for ATM cards without customer authorization because it counted as yet another product.

Wells Fargo was slapped with a $185 million fine in September for creating as many as two million fake accounts and consequently firing 5,300 workers. The furor that followed led to Congressional hearings over its sales tactics and alleged mistreatment of workers, including whistleblowers who told CNNMoney they were fired after calling the bank’s ethics hotline.

Hoping to fix the bank’s sales culture, last year Wells Fargo scrapped the unrealistic sales goals that employees say encouraged cheating. This week, Wells Fargo rolled out a new pay structure to replace the sales goals, which legendary investor and major shareholder Warren Buffett acknowledged “corrupted people.”

Instead of encouraging bankers to open accounts and “products” like debit cards, Wells Fargo said the new pay structure puts more emphasis on customer service, including the ability to retain consumers and how often accounts are used.

The revamped compensation system also features “stronger oversight and risk controls” at the local, regional and corporate levels to “monitor behavior,” according to the bank. That includes “periodic reviews and checkpoints to monitor any unintended outcomes or behavior” created by the new plan.

Tim Sloan, who became CEO after longtime John Stumpf stepped down abruptly last year, said in a statement that the new compensation program is “based on building lifelong relationships with customers.”

“While we have more work to do, I am proud of the effort of our entire team to make things right for our customers and team members,” Sloan said.