The Products Per Household Myth
A recent post on Bank Innovation caught my attention the other day. In particular, the part about products per household really stuck out to me:
Buried in Wells Fargo’s 2Q12 earnings was the unbelievable fact that retail banking cross-sell reached a record six products per household for the entire community bank consumer base at the San Francisco company. Yes, you read that right — an average of six products per household! That is a high bar Wells has hit and it deserves loud kudos. Its accomplishment also puts to bed the notion that banks can’t cross sell. They can and they will forever more.
Admittedly, six products per household does sound like a lot. Most people would probably think those six products consist of:
- two checking accounts
- a savings account
- a mortgage
- an equity line
- a credit card.
However, the dirty little secret is banks and credit unions all use different criteria to calculate products per household. I wouldn’t be surprised if the typical six products per household at Wells Fargo actually consists of:
- one checking account
- one debit card
- online banking
- bill pay
- mobile banking
When you look at in that light, six products per household isn’t impressive at all. It’s probably on par with every other bank and credit union.