A cross-selling strategy woos customers

Investors Financial Services Corp., the Boston parent firm of Investors Bank & Trust Co., posted a 25 percent increase in revenue last year and a 54 percent gain in net income, helping it land at fifth place in the Globe 100.

The explanation of how the company -- a provider of an array of back-office and administrative services to mutual funds, insurance companies, and hedge funds -- did it is as simple as it gets.

''They won new clients while they also made additional sales to existing clients," said Carla Cooper, a stock analyst with Robert W. Baird & Co.

The new customers won last year include Marathon Asset Management LLC and MatlinPatterson Global Advisers Inc., said Kevin J. Sheehan, chief executive of Investors Financial Services. An example of one that accounted for additional sales was Aegon, an insurance company that expanded its relationship with Investors Bank & Trust to include fund administration last year.

The firm's largest customer, institutional investment manager Barclays Global Investors, offers a window into Investors Bank & Trust's classic cross-selling strategy, Sheehan said.

Thanks to its heavy investment in technology, Investors can offer very complex, esoteric money management services that amount to getting a foot in the door. Once the firm can demonstrate to a new customer it can do a good job with one small piece of its business, Sheehan said, Investors has the position to develop a broader and more lucrative relationship.

A decade ago, Investors won a piece of Barclays investment management business. When Barclays decided to outsource its back-office operations in California, Investors was able to win that business, too.

One difference between Investors and larger rivals such as State Street Corp. and Citigroup Inc. is the way it uses technology, Sheehan said. Instead of separate computer databases for functions such as portfolio accounting, calculating the net asset value of shares in a mutual fund, and conducting general accounting in several different units of currency, Investors uses a single database that handles all the fuctions.

By enabling Investors to deliver better and faster service, Sheehan said, ''that's what enables us to get high levels of satisfaction from our customers."

Chris Reidy can be reached at reidy@globe.com.