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CASE STUDY: Wells Fargo
Outreach Good, Bargains Better
March 01, 2006
By Cara Marcano
Wells Fargo has secured a growing base of U.S. Hispanic clients thanks to a mix of non-traditional marketing and leveraging its popular money-transfer service InterCuenta Express. The remittance service has grown at triple-digit rates year over year across the bank's 23-state footprint, says Daniel Ayala, senior vice president and group head of the bank's global remittance services.
The growth is attributed to remittance customers, who are largely Hispanic and more likely to purchase other products and services offered by the financial services company. "When we look at cross sales, remittance customers' average cross-sale exceeds the company cross-sale average," Ayala says.
San Francisco-based Wells Fargo charges $5 for remittances of up to $3,000 to Mexico, Guatemala and El Salvador, less than, for example, Western Union, which charges a 5 percent fee for remittances of more than $100 to Mexico. Wells Fargo also waives the $5 fee for customers who sign up for its Gold Pack, a bundle of retail banking products. The package costs $10 a month, and offers customers several products such as checking or savings accounts, free money orders and a $10,000 life insurance policy, which, according to Ayala, has been a huge hit among Hispanics, a largely underinsured demographic.
To promote its services among U.S. Hispanics, Wells Fargo relies on grass-roots outreach to set the stage for traditional advertising. The bank employs about 100 community development officers whose job it is to meet, greet and connect with Latino officials in their communities. In addition, the bank also has revved up media buying on radio and print to acquire customers. That is followed by direct mail marketing for customer retention, Ayala says. Anita Santiago Advertising of Santa Monica, Calif., heads the creative work.
Wells Fargo spent $400,000 of its $92 million media budget for TV and print in 2004 on Hispanic-targeted media, according to TNS Media Intelligence. Through September 2005, it spent $450,000 on Hispanic media.
Wells Fargo also has set quantitative goals for its Hispanic business, says Carlos Fuentes, director of multicultural marketing for Vertis, a Chicago-based marketing agency working with the bank. "Most companies doing Hispanic marketing are just happy to do the PR and put the product out there, and if one Hispanic takes them up on their offer, they are happy. Wells Fargo says, 'Our goal is to hit X amount of revenue,' and to track the number of account holders and accounts each person has."
In January, Wells Fargo launched a pilot loan program in Los Angeles to allow customers without Social Security numbers to qualify for a mortgage using a tax ID number from the IRS.
"If you are taking deposits from immigrants," Ayala says, "you should also be willing to lend money to them."
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