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The mind-blowing stupidity of Wells Fargo
[THEWEEK] Wells Fargo is in hot water. U.S. regulators announced Thursday that the bank has to pay $2.5 million in customer refunds and $185 million in legal fees. It's comeuppance for some truly breathtaking stupidity on the bank's part.The problem began with what's called "cross-selling." Your average big corporation has a lot of customers, but also a lot of different products and services. Wells Fargo, for instance, is one of the biggest banks in the country, and its offerings run the gamut from credit and debit cards, to online banking, to savings and checking accounts and more. Usually, most of a company's customers only use one or two of those products and services. But since it's already gone to the trouble to acquire those customers, it presumably behooves Wells Fargo and other big firms to get their employees to hawk the rest of their products and services to those customers as well. That's cross-selling. Which seems straightforward enough. But it turns out, as a business model, cross-selling can be tricky. Doing it properly requires the right strategy, metrics, and so forth. Wells Fargo did not do cross-selling properly. First off, the bank used a crude metric -- simply the average number of products sold to each customer. Then it imposed strict cross-selling quotas on employees that arguably went way beyond what was reasonably possible. Next, as the L.A. Times' E. Scott Reckard found in 2013, Wells Fargo reportedly treated its employees horribly. "Managers constantly hound, berate, demean, and threaten employees to meet these unreachable quotas," said a Los Angeles city attorney investigation sparked by the Times' report. Welcome to banking and retail. Managers themselves were reportedly berated in front of coworkers if they fell short. Plenty of people put in extra hours, and then had to sue Wells Fargo when they weren't paid overtime. "When I worked at Wells Fargo, I faced the threat of being fired if I didn’t meet their unreasonable sales quotes every day," one former employee said in a statement. "We were constantly told we would end up working for McDonald's" revealed another. Posted by: Fred 2016-09-13 |
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