Share of wallet (SOW) is a strong marketing metric; it is the dollar sum consistently committed by an average consumer to a single brand rather than to rival products in the same product category. In different words, the Share of wallet is the percentage (“share”) of a customer’s fees (“of wallet”) for a product that goes to the association selling the product. For example, McDonald’s has a 50% SOW for that customer if a customer spends $60 a month at fast-food restaurants, and $30 of that amount is spent at McDonald’s. Often the term is expressed as wallet share.
Companies aim to increase the wallet share of an existing client by offering several goods and services to produce as much revenue from each customer as possible. The most concentrated indicator of strategic success is the share of wallet (SOW). The long-term profitability of a patron relationship will usually move in parallel with changes in share-of-wallet. The focal point of client share is to expand revenues from current customers. For example, a marketing strategy may have a specified aim of growing the wallet share of the brand for particular consumers at the expense of its competitors.
(Example of Share Of Wallet)
As mentioned above, wallet share simply refers to how much of a customer’s expenditures go to a specific business for a type of product or service. A value-added reseller, for example, will have a wallet share of 60% of a customer’s spending on storage goods. Added sales, enhanced customer engagement, customer satisfaction, and brand loyalty are the advantages of increasing the share of a customer’s wallet. Different firms combat over the share they have of a customer’s wallet, all trying to get as a good deal as possible. Typically, these exclusive firms don’t sell the equal but instead ancillary or complementary product.
Both market share and wallet share are based on increasing client sales. Meanwhile, market share refers to the proportion of what a corporation receives from the total investment in a sector or commodity market. On the different hand, the share of wallet focuses on growing revenue from existing purchasers with the aid of expanding the number of the merchandise being used which may additionally be taken from the competition. Strategies to gain wallet share include attempting to increase the average amount a customer spends per visit, promoting more frequent visits, and promoting customer loyalty and retention of customers.
Share of wallet (SOW) is widely used to identify share-of-customer in the finance and banking sectors. Increasing wallet share can mean accepting the best thoughts of a rival. It may also mean defining products or services that are a logical extension of the company, but that can boost its wallet share by replacing rivals.
Forte Consultancy says: “The percentage of a customer’s spend that is with a given company over a given amount of time. For example, for a gas retailer, it’s the amount of times a given customer fills up the gas tank of their car one month at their own stations, divided by the total number of times the same customer fills up the gas tank of their car the whole month. So a customer who fills up his or her car’s gas tank four times a month with three of those fills at one gas retailer is giving that gas retailer 75% share of their wallet.”
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