share of wallet что это

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Share of Wallet — (SOW) is a survey method used in performance management that helps managers understand the amount of business a company gets from specific customers.Another common definition is the following: Share of Wallet is the percentage ( share ) of a… … Wikipedia

share of wallet — noun the percentage of a consumer s income which goes to a particular provider of a commercial product. … Australian-English dictionary

share of wallet — The share of a customer s business that is obtained by a particular company … Big dictionary of business and management

wallet share — (WAWL.ut shayr) n. The proportion of a consumer s disposable income allotted to a single company. Example Citation: Kuntz said what surprised GM of Canada is the company has generated so much interest when other companies have introduced numerous … New words

wallet neuropathy — n. Lower back pain caused by sitting on an overstuffed wallet kept in a back pants pocket. Example Citations: Physiotherapists have coined the term wallet neuropathy for the lower back pain caused by men sitting down (such as when driving or in… … New words

wallet biopsy — (wawl.ut BY.awp.see) n. The determination of a person s financial status or health insurance coverage before admitting that person to a hospital or before performing an expensive procedure. Example Citation: Mr. Kramer passed what is perhaps the… … New words

e-wallet — n. A computer database or online site that stores a person s name, address, and credit card data and then enables easy retrieval of that information for online purchases. Example Citation: According to Jupiter Communications, 27 percent of… … New words

stomach share — n. An informal market share measure used within the food industry. Example Citation: The suppertime crunch means big changes at your neighborhood supermarket, as the grocery industry fights to carve out more of the market dubbed stomach share.… … New words

Double-loop marketing — Double loop marketing[1] [2] is based upon the notion that in today s information rich world, marketing must of necessity be people and knowledge driven rather than product driven. A company must first develop mind share” by building a site that… … Wikipedia

Competition — For other uses, see Competition (disambiguation). A selection of images showing some of the sporting events that are classed as athletics competitions Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or… … Wikipedia

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Share of Wallet (SOW)

Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas’ experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.

What Is Share Of Wallet (SOW)?

Share of wallet (SOW) is the dollar amount an average customer regularly devotes to a particular brand rather than to competing brands in the same product category. Companies try to maximize an existing customer’s share of wallet by introducing multiple products and services to generate as much revenue as possible from each customer. A marketing campaign, for example, may have a stated goal of increasing the brand’s wallet share for specific customers at the expense of its competitors.

Key Takeaways

Understanding Share of Wallet

Although companies actively engage in sales activities to generate new clients, maximizing the amount of revenue from every existing client is equally as important. Share of wallet focuses on a brand’s own customers and seeks to maximize the dollars they spend regularly on that brand rather than on a competing one. Companies might identify their most loyal customers ranking them by the number of products they use or the amount of revenue they generate. Offering additional services to up-sell a client could prove fruitful since multi-product customers are likely to have a favorable view of the company. Also, new products could be offered to loyal customers before the public, which would add to revenue and enhance brand loyalty.

The benefits of increasing a customer’s share of wallet go far beyond boosting revenue and include improving client retention, customer satisfaction, and creating a loyal, built-in market from which to offer new products in the future.

Share of Wallet vs. Market Share

Increasing wallet share can be a less expensive, more efficient, and therefore a more profitable strategy for boosting revenue than attempting to expand overall market share. It’s important to note that wallet share and market share are two different concepts.

Market share refers to a company’s percentage of total sales in its category or a specific geographic region. For example, if bank executives wanted to add new business clients, they would analyze the existing market to determine how many businesses were located in that region. From there, the management could determine what percentage of the total customers in the region bank with them. So, if the bank had 1,000 customers and there were 10,000 businesses in that region, the bank’s market share would be 10% for that region. Calculating market share helps companies to determine the size of the opportunity in a region. The same analysis could be applied to a specific product or service.

Both market share and wallet share focus on growing revenue from customers. However, the growing market share focuses on attracting new clients from the competition. On the other hand, share of wallet focuses on growing revenue from existing clients by expanding the number of products being used–which might also be taken from the competition.

Target Marketing to Grow Share of Wallet

A campaign to increase a brand’s share of wallet focuses on competing more effectively to take away some of a competitor’s business. Such a campaign might begin with an attempt to identify exactly what a customer finds at a competitor. It may be a broad issue of quality, price, or convenience, but it may be very specific. A competing grocer might have more vegan selections or superior fresh produce. It may have faster checkout or free delivery.

Increasing share of wallet can mean adopting a competitor’s best ideas. It also might mean identifying goods or services that are a logical extension of the business but can increase its share of wallet by supplanting rivals. The Wegmans supermarket chain carries all of the usual grocery items, but its vast ready-to-eat section might be its true share-of-wallet extender. Its selections compete against every takeout restaurant between its store and the customer’s home.

Increasing market share is an increase in a brand’s total sales within its category while increasing share of wallet is additional revenue from existing customers.

Examples of Share of Wallet

Let’s say as an example when McDonald’s added a breakfast menu, some customers may have switched their morning routine and started going to McDonald’s restaurants rather than to Dunkin’ Donuts. McDonald’s had captured a few more of their existing customers’ dollars spent on fast food as well as some new clients. As a result, Dunkin’ Donuts might respond by expanding its breakfast menu to include egg sandwiches, possibly in order to lure back some of those breakfast customers.

Another example where share of wallet is in practice today is in the banking industry. A bank’s executive management might step up its cross-selling efforts, which is selling complementary products and services to existing clients. A wealth management client might get referred to an in-house mortgage representative when the customer is in the market for a new home. A checking account customer might be encouraged to apply for a car loan at the bank. The bank is not gaining new customers through this practice but is increasing its share of wallet among current customers.

In both examples, an increase in spending and revenue from each existing customer base occurred as opposed to money being spent at a competitor.

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Доля кошелька (SOW)

Опубликовано 07.07.2021 · Обновлено 07.07.2021

Что такое Доля кошелька (SOW)?

Доля кошелька (SOW) – это сумма в долларах, которую средний покупатель регулярно тратит на конкретный бренд, а не на конкурирующие бренды в той же категории продуктов. Компании пытаются максимизировать долю кошелька существующего клиента, внедряя несколько продуктов и услуг, чтобы получить как можно больше доходов от каждого клиента. Например, маркетинговая кампания может иметь заявленную цель увеличения доли кошелька бренда для конкретных клиентов за счет его конкурентов.

Ключевые моменты

Понимание доли кошелька

Преимущества увеличения доли кошелька клиента выходят далеко за рамки увеличения доходов и включают в себя улучшение удержания клиентов, их удовлетворенность и создание лояльного встроенного рынка, на котором можно будет предлагать новые продукты в будущем.

Доля кошелька и доля рынка

Доля рынка – это процент компании от общего объема продаж в своей категории или конкретном географическом регионе. Например, если руководители банка захотят добавить новых бизнес-клиентов, они проанализируют существующий рынок, чтобы определить, сколько предприятий находится в этом регионе. Оттуда руководство могло определить, какой процент от общего числа клиентов в регионе обслуживает их. Таким образом, если бы у банка было 1 000 клиентов и 10 000 предприятий в этом регионе, рыночная доля банка составила бы 10% для этого региона. Расчет доли рынка помогает компаниям определить размер возможностей в регионе. Такой же анализ можно применить к конкретному продукту или услуге.

И доля рынка, и доля кошелька ориентированы на рост доходов от клиентов. Однако растущая доля рынка направлена ​​на привлечение новых клиентов из числа конкурентов. С другой стороны, доля кошелька направлена ​​на рост доходов от существующих клиентов за счет увеличения количества используемых продуктов, что также может быть взято у конкурентов.

Целевой маркетинг для увеличения доли кошелька

Кампания по увеличению доли кошелька бренда нацелена на более эффективную конкуренцию с целью отобрать часть бизнеса конкурента. Такая кампания может начинаться с попытки точно определить, что покупатель находит у конкурента. Это может быть широкий вопрос качества, цены или удобства, но он может быть очень специфическим. У конкурирующего бакалейщика может быть более веганский выбор или лучшие свежие продукты. Возможно более быстрое оформление заказа или бесплатная доставка.

Увеличение доли кошелька может означать принятие лучших идей конкурента. Это также может означать определение товаров или услуг, которые являются логическим продолжением бизнеса, но могут увеличить его долю в кошельке за счет вытеснения конкурентов. Сеть супермаркетов Wegmans предлагает все обычные продуктовые товары, но ее обширная секция готовых к употреблению продуктов может быть ее истинным дополнением к доле кошелька. Его выбор конкурирует с каждым рестораном на вынос между его магазином и домом покупателя.

Краткая справка

Увеличение доли рынка – это увеличение общих продаж бренда в своей категории, в то время как увеличение доли кошелька – это дополнительный доход от существующих клиентов.

Примеры доли кошелька

Скажем, в качестве примера, когда McDonald’s добавил меню завтрака; некоторые клиенты, возможно, изменили свой утренний распорядок и начали ходить в рестораны McDonald’s, а не в Dunkin ‘Donuts. McDonald’s получила еще несколько долларов своих существующих клиентов, потраченных на фаст-фуд, а также несколько новых клиентов. В результате Dunkin ‘Donuts может отреагировать, расширив свое меню завтрака, включив в него яичные бутерброды, возможно, для того, чтобы заманить некоторых из тех клиентов, которые завтракают.

В обоих примерах произошло увеличение расходов и доходов от каждой существующей клиентской базы, в отличие от денег, потраченных на конкурента.

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Share of Wallet

January 7, 2021 By Hitesh Bhasin Tagged With: Marketing

Life of marketing personnel is driven by and centred on targets. Increasing sales; reaching more customers and; capturing new market share are eternal quests that they are engaged in. There are many ways to measure the growth of sales for a company.

The simplest manner of measuring the growth is obviously to look at the sales volume. Higher the figures, higher the growth! But this can be a very narrow outlook on real growth. Sales performance is a function of many factors like selling and distribution expenses, the price of the product, adding new markets, cross-selling and higher sales to existing customers etc.

Higher sales figure has to be weighed against performance on all these fronts to ascertain the quality of growth. Higher sales with the same level of expenses indicate a real gain in customer confidence and thus marks good on the sales performance of the company. On the other hand, higher sales volume achieved by the proportionate increase in selling and distribution expenses actually doesn’t amount to growth until the sales growth is sustained in subsequent periods.

So, how to measure the sales performance of a company? By sales volume, market share or customer satisfaction? One amongst such many interesting metrics of measuring growth or performance of a company is Share of Wallet.

What is Share of Wallet?

Example of SOW (Share of Wallet)

An example will clarify the concept better. E.g. You are a leading, high-end cosmetics brand. Your target market is working women in the age group of 25 to 40 who prefer and can spend on high-quality lipsticks. When your target market goes for shopping lipsticks, they would have different brands to choose from.

Share of Wallet as against Market Share

Market share generally considers both new and old customers whereas Share of wallet considers only the old customers who are already buying products in the market. It does not consider new customers. In a typical company, share of wallet might be measured for customers as well as for multi brand dealers (Which brand has more share of wallet at the dealer point).

One important way to measure a company’s growth is comparing its market share against that of its competitors. The share of a company in the total market for that product segment is known as market share. Here, your company may be competing for the entire market which comprises of old as well as new customers.

The cost of acquiring new customers is too high and you would have to put in lots more effort to generate that first sale. Thus, market share may be too big a target to aim for a “share of wallet” study. This is true especially for the businesses that are in the start-up phase. In a chase to increase market share, they may miss out on what’s already within their reach – their existing customers.

Share of Wallet as against Customer Satisfaction

Customer satisfaction is another parameter that maps a business’s growth. The level of satisfaction of the customers with your product or service or experience determines whether they will come to you again or not. But customer satisfaction is not a very concrete concept. It’s a very fleeting target that keeps on shifting. Even the customers who are highly satisfied may not actually spend on your brand due to various reasons such as poor brand recall, disparate retail presence, one-time buy etc.

Advantages of Share of Wallet

Thus, as against both the aforementioned measures, Share of Wallet becomes a more reliable, more consistent measure of growth. It very clearly states how much amount your customer spends for your products exclusively and has the following advantages:

Wallet Allocation Rule

A marketing study was undertaken by Ipsos Loyalty under which around 17,000 customers were studied for their buying behaviour. The article containing the results of this study has been published in Harvard Business Review in October 2011. It sought to find out which factors had the most bearing on Share of Wallet. And the conclusions of the study are as follows:

How to Increase Share of Wallet?

1) Lead the market trends

The business has to keep abreast of and be at the forefront for all the latest trends in the market for their product category. This ensures that the customers will develop a faith in the company and will look forward to the company’s range of products to experience the new trends that are in vogue.

2) Loyalty rewards

The company must reward their loyal customers for staying with the company by introducing special schemes such as loyalty discounts, special offers at concessional rates, free gifts etc. This makes the bond between the business and the customer stronger.

3) Maintain the ‘Brand Connect’

Only securing #1 Brand position in the market is not enough. It is equally important to maintain that position. And how can a business do that? By maintaining a string of special actions so as to resurface as a preferred choice in a customer’s mind whenever he recalls a brand. These special actions obviously include marketing communications informing the customers about existing products, schemes and offers, new product launches etc.

But apart from regular marketing messages, a brand has to do or communicate something special to the customers which they perceive as valuable. It may, for example, be organizing a talk show, live demonstration with a renowned celebrity, honoring special achievers, sponsoring some competitions etc. This will keep the Brand alive and fresh in the minds of customers.

4) Focus on customers giving higher business

As stated earlier, generating more business from customers who have already bought from you and are happy is far easier than approaching new, reluctant customers. Thus, the company has to concentrate a slew of marketing initiatives directed only at their present customers such as special privileges, free deliveries, price variations, new offers, free upgradation of the products to keep them happy and buying from you.

5) Upselling and cross-selling

One more important technique to increase Share of Wallet is cross-selling and up-selling. Cross-selling refers to selling products in the allied categories to the main product line. Thus, McDonald’s, a popular fast foods chain across the world, offers a private space to celebrate birthdays. They also offer decorations and services of a host for the party. The customer will have to pay additionally for this. This is cross-selling – selling a different product line apart from the principal line of products.

This was all about the Share of wallet concept. A share of wallet study can give you a very good insight of customer demand for your products as compared to your competitors in the market and it should be carried out by brands regularly.

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Share of Wallet: What It Is and How to Calculate It

Everyone has preferences.

Some people like Coke; others like Pepsi.

Some people prefer ketchup; others, mustard.

Some people enjoy black licorice; others have taste buds that work like they’re supposed to.

For consumers, there’s no shortage of choices, but there’s a limitation of money. People pick and choose brands they rely on, and will allocate portions of their budget to companies they trust. This metric is called, «share of wallet,» and it helps brands determine how popular they are amongst their competitors.

Let’s dive in on what exactly that figure means and how to calculate it for your business.

What Is Share of Wallet?

Share of wallet represents how much a consumer regularly spends on a specific brand as opposed to its competitors. If a customer has allocated a portion of their budget to spend on a specific kind of product or service, share of wallet is the percentage of money that goes to that brand instead of its competitors.

For the sake of being folksy, you can think of it as a brand’s competitive «share» of the money a consumer has chosen to spend from their «wallet» on the product that brand makes.

If the consumer buys one brand at the beginning of the month and the other two weeks later, both brands have 50% share of wallet for that month.

Increasing an individual customers’ share of wallet can be as reliable and profitable as trying to bring in new customers. That’s why businesses often focus on increasing their share of wallet for repeat customers as much or more than winning new ones. This individual approach highlights the difference between share of wallet and market share.

Share of Wallet vs. Market Share

Market share is the percentage of a market that a single company controls by revenue or number of customers. Share of wallet is how much a specific customer spends on a brand relative to its competitors. Acquiring new customers boosts market share while getting existing customers to spend more improves share of wallet.

Improving your company’s share of wallet can often be as simple as offering a broader range of high-quality products. For example, let’s imagine a fast food chain — we’ll call it «Clint’s.»

Clint’s is looking for ways to improve its share of wallet. It has a solid base of customers that spend most of their fast food budget on his chain. How can the company sway them to spend more? Clint’s could add or cycle through new items to its menu on a consistent basis.

Clint’s might add products that keep up with the time of year, like Cajun fries for Mardi Gras or tree-shaped chicken nuggets for Arbor day. It might even add new, out-there options like egg rolls or lobster bisque. The point is, the franchise would be finding new ways to engage its customers which leads to them spending more money at Clint’s.

Boosting share of wallet can also mean borrowing from other companies. If a particular menu item is selling well for one of Clint’s competitors, the chain may consider selling their own version. That way, customers will be less inclined to spend money at one of Clint’s competitors because they can get the same product from a franchise they know and trust.

But, how can you tell whether customers are relying on your business more than others?

How to Calculate Share of Wallet

The most effective way to calculate share of wallet is known as «The Wallet Allocation Rule.» The formula relies on two factors: the number of brands within the specific category and how those brands rank in terms of customer preference. These are the steps to finding your share of wallet.

1. Determine the number of brands

2. See how the customer ranks them

Survey the customer you want to analyze and rank the brands in question. If they rank two brands in the same position, take the average between that position and the one after it and assign that as their ranks. For instance, if a consumer has two brands at number one, those brands will both rank at 1.5.

3. Use The Wallet Application Rule formula

Plug a brand’s rank and number of total brands in its category into the formula below to calculate share of wallet.

For instance, say out of five fast-food restaurants, a consumer ranks Clint’s second. According to the Wallet application rule, Clint’s has a 26.7% share of wallet for this customer.

People are always going to have preferences. They’re going to try new things and rely on the ones that resonate with them. It’s important to make sure your brand can capitalize on both of those tendencies.

That’s why share of wallet is a reliable, practical metric that’s worth keeping track of. It could inform viable and effective strategies to drive revenue from existing customers or give your business some context as to what it could be doing better.

For more ways to measure customer service, read about customer retention metrics.

Originally published Feb 6, 2020 8:00:00 AM, updated May 05 2020

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