Share of Wallet (SOW)

What Is Share Of Wallet (SOW)?

Share of wallet (SOW) is the dollar amount an average customer routinely gives to a specific brand as opposed to competing brands in a similar product category. Companies try to amplify an existing customer's share of wallet by introducing numerous products and services to create however much revenue as could reasonably be expected from every customer. A marketing campaign, for instance, may have a stated goal of increasing the brand's wallet share for specific customers to the detriment of its rivals.

Understanding Share of Wallet

In spite of the fact that companies actively participate in sales activities to create new clients, maximizing the amount of revenue from each existing client is similarly as important. Share of wallet centers around a brand's own customers and tries to boost the dollars they spend consistently on that brand as opposed to on a competing one. Companies could distinguish their most faithful customers ranking them by the number of products they use or the amount of revenue they create. Offering extra services to up-sell a client could demonstrate productive since multi-product customers are probably going to have a great perspective on the company. Likewise, new products could be offered to faithful customers before the public, which would add to revenue and improve brand loyalty.

The benefits of increasing a customer's share of wallet go a long ways past boosting revenue and include improving client retention, customer satisfaction, and creating a dependable, worked in market from which to offer new products later on.

Share of Wallet versus Market Share

Increasing wallet share can be a more affordable, more efficient, and consequently a more productive strategy for boosting revenue than attempting to grow overall market share. It's important to note that wallet share and market share are two unique concepts.

Market share alludes to a company's percentage of total sales in its category or a specific geographic region. For instance, to add new business clients, they would dissect the existing market to determine the number of businesses that were situated in that region. From that point, the management could determine which percentage of the total customers in the region bank with them. In this way, assuming 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 assists companies with determining the size of the opportunity in a region. A similar analysis could be applied to a specific product or service.

Both market share and wallet share center around growing revenue from customers. In any case, the growing market share centers around attracting new clients from the competition. Then again, share of wallet centers around growing revenue from existing clients by expanding the number of products being utilized which could likewise be taken from the competition.

Target Marketing to Grow Share of Wallet

A campaign to increase a brand's share of wallet centers around competing all the more successfully to remove a portion of a contender's business. Such a campaign could begin with an endeavor to recognize precisely exact thing a customer finds at a contender. It could be a broad issue of quality, price, or convenience, however it could be unmistakable. A competing food merchant could have more vegetarian determinations or unrivaled new produce. It might have faster checkout or free delivery.

Increasing share of wallet can mean adopting a contender's best thoughts. It likewise could mean identifying goods or services that are a legitimate extension of the business however can increase its share of wallet by supplanting rivals. The Wegmans supermarket chain conveys the typical staple things, however its all tremendous prepared to-eat section may be its true share-of-wallet extender. Its determinations go up against each 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 extra revenue from existing customers.

Instances of Share of Wallet

Suppose as an illustration when McDonald's additional a breakfast menu, a few customers might have exchanged their morning routine and begun going to McDonald's restaurants as opposed to Dunkin' Donuts. McDonald's had caught a couple of a greater amount of their existing customers' dollars spent on fast food as well as a few new clients. Subsequently, Dunkin' Donuts could answer by expanding its breakfast menu to include egg sandwiches, conceivably in order to bait back a portion of those breakfast customers.

One more model where share of wallet is in practice today is in the banking industry. A bank's executive management could step up its [cross-selling](/strategically pitch) efforts, which is selling complementary products and services to existing clients. A wealth management client could get alluded to an in-house mortgage representative when the customer is in the market for another home. A checking account customer may be urged to apply for a vehicle loan at the bank. The bank isn't gaining new customers through this practice however is increasing its share of wallet among current customers.

In the two models, an increase in spending and revenue from each existing customer base happened rather than money being spent at a contender.

Features

• Benefits from increasing a client's share of wallet include added revenue, further developed client retention, customer satisfaction, and brand loyalty.
• Share of wallet is the amount an existing customer spends consistently on a specific brand as opposed to buying from competing brands.
• Companies develop wallet share by introducing different products and services to create however much revenue as could be expected from every customer.
• A marketing campaign could zero in on boosting spending by existing customers as opposed to increasing the product's overall market share.