Counting products per customer

Do you evaluate product usage? Do you count the products that a customer buys and uses from you?

This metric is relevant if you believe in only one of the following characteristics:

• more products placed per customer are better than less
• the acquisition costs for the follow-up product are lower because it is already an existing customer
• the costs of customer care are better, i.e. across broader shoulders, distributed
• better use is made of existing customer knowledge
• customer loyalty to the company is increased

Which steps are necessary for this?

1. First of all, the product range must be defined; i.e. I determine which products and service modules or performance features I evaluate as an independent product.
2. Then, in the following step, this defined product range is structured hierarchically. It makes sense not to do this according to the provider’s processes or other criteria, but to approach it from the perspective of customer needs or the customer requirement fields. The result is a product tree with strong branches in every area pf need.
3. The counting rules can then be drawn up on this basis. This answers the question of whether a customer who has 10 loans with me has also bought 10 products from me, or maybe just one. I can consider whether I should count product variants individually or, if I sell special service components, possibly also assign a value greater than 1 for the purpose of counting. The goal here is to find a good balance between the informative value of the intensity of the business relationship between the customer and the bank and a controlling parameter that is also relevant for targets and goals. Ideally, the rules are as simple as possible so that the game is discussed and not the rules of the game instead.
4. At the start or for the first rollout, an initial report according to these rules and criteria is necessary. I need the product usage per customer or per customer unit (group of (legal) customer seen as a single unit for acquisition purposes) and the average values derived from this per RSM, per team, per sales area. If you won’t get too fragmented, then it makes sense to take a look at industry bundles, as the basic product requirements of a company can be derived from the respective business models. On this basis, ambition levels can be defined, goals can be derived and thus broken down.
5. Last but not least, it merely has to be controlled accordingly. The key figures need relevance in everyday life, i.e. the managers talk about them, ask questions about them, behave and steer according to them – and ideally the product use can also be found somewhere in the targets and goals with the individual employees.