Blog · Wallet share and penetration · Industrial manufacturers
A method for industrial and component manufacturers to measure, per customer, the product lines bought against the lines customers of that type buy, value the gap, keep direct and distributor channels from double counting, and reconcile to shipped revenue.
A component manufacturer knows what each customer bought last year. It rarely knows which product lines that customer is qualified for and has never bought from it. The order history has everything needed to work it out. This guide sets out the method, with the channel handling that makes or breaks it for anyone who sells both direct and through distributors.
Per customer:
Fit = product lines bought ÷ product lines in the norm for the customer's type and size Gap value = Σ (missing lines × your margin on the line for that band)
Per plant, channel and rep, the sum of gap values, and the concentration of revenue in the top customers.
Customer identifiers only.
Direct sales and distributor sales are both in shipped revenue, and a customer served both ways appears in both. The rule:
shipped revenue = Σ channels = Σ plants = Σ customers = Σ product lines
If channels sum to more than shipped revenue, a shipment appears under both a distributor and the end customer. The assertion finds it before the fit does.
Band customers by type and size. For each band, the share of customers buying each line in the trailing year. The fit set is every line bought by more than half the band. Product management can add a new line to a band's set as a labelled assumption.
Mid-size OEM band, fit set of bearings, seals, couplings and service. One customer, direct channel.
| Line | Bought | Revenue | In fit set | Gap value |
|---|---|---|---|---|
| Bearings | Yes | $1.2m | Yes | |
| Seals | Yes | $410k | Yes | |
| Couplings | Yes | $120k | Yes | |
| Service | Yes | $40k | Yes | |
| Gearboxes | No | No |
Full fit, no gap. The next customer in the band buys bearings only, and the same table for them shows three missing lines worth $560k at the band's margin. The plant's list opens there.
Fit at part-number level. Thousands of parts, every customer under-penetrated, no ranking worth reading. Measure at the line the team sells.
Distributors as end customers. A distributor buying every line looks like a perfectly penetrated customer while its end customers are invisible. Keep the channel dimension and measure distributors against distributors.
Plant transfers. A customer served from a second plant after a capacity move appears under both plants. The plant assertion fails; the fix is a dated transfer.
Service booked elsewhere. Service revenue billed from a separate system never joins the order history and every customer looks like they buy no service. Bring the service export in as another file with the same customer identifiers.
Mapped once, the order history produces the fit list per customer, rolled up per plant, channel and rep, reconciled to shipped revenue, every month. Covirage builds this from the export as it is. The industrial manufacturers page describes the setup, and you can upload a sample order export and see the roll-up on your own rows.
Where the distributor reports point-of-sale, use it; where not, treat the distributor as the customer for that channel and measure its fit against other distributors. Keep the two channels apart in the roll-up and reconcile each to its own shipments. Mixing them is how the same order gets counted at the distributor and again at the end customer.
The level at which your sales team sells: bearings, seals, couplings, gearboxes, service. Not the part number. A fit measured at part-number level shows every customer missing thousands of parts and means nothing.
From your own customers. Band by type and size, and a line is in the band's fit set if more than half the band buys it. No external data needed.