How to measure share of wallet
To measure your share of your wallet, you need to follow the wallet allocation formula. You just need to know the total number of competing brands and your rank within that list. Next, plug those numbers into this formula:
Share of wallet = 1-[rank/(# of brands+1)]*(2/# of brands)
Let's try an example. What if there are five brands in the area, and a certain customer has ranked your business second? The formula to calculate SOW would look like this:
1- (2/6)*(2/5) = 0.268
In this situation, your business would have a 26.8% SOW for this specific customer.
Strategies to increase your company's share of wallet
If you want to increase your share of your wallet, you need to look at the competition. What's bringing customers over to other businesses? How do you up your game to compete?
Maybe they have an intuitive website design and a more convenient checkout. Perhaps there's a specific product they have that you don't carry. Are customers drawn to longer warranties or loyalty programs? Identify and strengthen your weak spots relative to other brands to increase your company's share of wallet.
Understand your customers
What do your customers need and want from your brand? Customer needs tend to point toward problems you may be able to solve. Customer wants can be aspirational or luxury items that they desire. Understanding your customers can help you create products that cater to these needs.
Another area to explore is what your customers value. Some customers will spend more on a brand that shares similar values. This could include selling fair trade goods, using eco-friendly packaging, or donating to a popular charity.
Improve customer satisfaction
How satisfied are people with your brand? This is a common question that you can gauge through customer surveys. You can boost satisfaction through a number of avenues, like focusing on excellent customer service, shifting price points, and improving in-store experiences.
Offer loyalty programs
A rewards program builds even more value into your already-beneficial services or products. These can be financially based, such as getting a discount after buying in.
Other programs have more intangible rewards. For instance, businesses may give loyal customers an early look at exciting new software in development.
Provide personalized experiences
Customers can buy from companies that offer a generic, neutral shopping experience. However, they won't develop as much connection to that brand. To be memorable, look for ways to build personalization into the purchasing journey. These could include:
- Mailing list segmentation to roll out marketing campaigns tied to different demographics
- Friendly reminders about their last purchase to make reordering easy
- Emails addressed directly to them or referring to their interests
This strategy involves selling related products and additional services. For instance, a skincare line could branch out to makeup, bath products, or at-home spa treatments. This lets customers take care of all their skin care needs in the same place.
Customers are loyal to brands that give them great products and a pleasant experience. Your competition will struggle to draw them away with short-lived sales and promotions. It's also easier to launch new products to a loyal base.
Maximize business growth with share of wallet
Share of wallet is a significant number that can give you a snapshot of revenue potential from your current customers. It also helps you create strategies that increase brand loyalty and customer retention.
You can optimize your share of your wallet by cross-selling items, creating loyalty programs, and providing personalized experiences. However, the best way to increase your share of your wallet is to build a deeper understanding of who your customers are and what they need from your brand.
Fortunately, Mailchimp's tools and services can help you manage your customer relationships. Even a well-designed email marketing campaign will miss the mark if you don't understand and meet customer needs. But with Mailchimp's suite of tools and resources, you can better understand your customers and elevate your marketing strategy, all within our convenient platform.