Three Letters That Can Help Product Managers Be More Successful: ATM

Creating a product is a first step, where to put it is the most important step
Creating a product is a first step, where to put it is the most important step

Wouldn’t it be great if the product that you were managing was used by millions of people every day? Even better, wouldn’t it be cool if it performed some function that generally made them happy after they used it – like gave them money or something like that? Well guess what, product managers who work for banks and who are in charge of the bank’s ATM machines have this kind of job. What can we learn from them?

Location, Location, Location

ATM machines have been with us for just over 20 years now. When ATM machines first showed up, Banks were very excited. By deploying ATM machines Banks were able to reduce bank branches and thereby reduce expensive branch staff. These days, bank ATM product managers struggle to prove that their product is still valuable to the bank.

I may have said that incorrectly. Banks know that ATM machines are valuable; however, most of the bank’s senior management doesn’t see their ATM machines as profit centers. James Lau and Jeffrey Leong over at A.T. Kearney have looked into this and what they’ve discovered is that ATM machines can generate a great deal of money for a bank.

ATM machines make their money in two different ways. One that we’re all familiar with is when someone uses a different bank’s ATM machine to conduct banking with their bank and they get charged a “foreign fee”. When a bank’s customer uses one of the bank’s ATM machines it’s called an “on-us” transaction. The researchers assigned this transaction a nominal value to this type of transaction because it both attracts new customers and keeps existing customers happy. Product managers who can optimize both of these activities will have found something else to add to their product manager resume.

The trick for bank ATM product managers is to get their products to maximize the amount of money that they are bringing in for the bank by optimizing the location of every ATM machine in their network. You could almost say that this is a part of their product development definition. The reason that this is so important is because top performing ATM machines have been shown to bring in between US$30,000 – US$60,000 more per year than the lowest performing machines.

How To Play The ATM Game Better

If location is so important to managing a successful ATM machine product, then just exactly how do bank ATM machine product managers go about determining where to put their ATM machines? It turns out that there is a four-step process that product managers can go through to do this correctly:


  • ATM Objectives: The first step is for the bank’s ATM machine product managers to make sure that they both define and weigh the objectives for each ATM machine. These can include such things as generating fees, wining market share, improving service, etc.



  • Identify “Catchment” Locations: Clearly ATM machine product managers are going to want to place their ATM machines where their customers are. They also have to weight this against where they already have ATM machines.



  • Create A Short List: From the master list of possible ATM machine sites, create a short list of sites using branch manager feedback, focus groups, and location scouts. Actually going out to each site and conducting a site survey will provide even more information.



  • Pinpoint Sites: Now the product manager can apply assumptions on demographics, adjust their data for location characteristics, and optimize based on other factors. This is where things like game theory can be brought in to help out in order to select the final location.


What All Of This Means For You

Every product manager dreams about having their product bask in the spotlight and be used by many customers every day. Who wouldn’t want this to be a part of their product manager job description? Bank product manager who are responsible for the bank’s ATM machines have such a job. It turns out that this is a very important job for the bank’s overall success.

Bank ATM product managers have to take the time to understand the process that they need to go through in order to select the proper place to put an ATM machine. Even after this there may be low performing ATM machines in their network. This then requires advanced techniques, including game theory, to be used to optimize the ATM machine’s location.

ATM machines are something that most of us don’t spent a lot of time thinking about – they just seem to be where they need to be when we need to use them.

However, it turns out that the bank’s ATM product managers have to invest a great deal of time and effort to make sure that their ATMs are placed in the correct locations and then they have to constantly be optimizing their network. The rest of us can learn from their attention to detail and the fact that they have developed ways to deal with constantly changing customer needs.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What do you think would be the best way to determine that you had deployed enough ATM machines?

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What We’ll Be Talking About Next Time

By now just about every product manager knows that not only has social media arrived, it has just about taken over the world. The use of social media has made its way into everyone’s product development definition. The problem that a lot of us are having is that we’re not 100% sure about how best to use this new marketing tool. Where things get even trickier is when we try to figure out how to get our sales teams to do a better job of selling our products using social media. What’s the best way to do this?