Ask any business leader, and it’s a near certainty that increasing wallet share is a, if not the top priority. By assessing wallet share, businesses get a clear understanding of the potential for future revenue growth or decline.
Understanding wallet share is one of the most revealing measurements for any business. It’s crucial to determine the type of customer that can have the biggest impact on wallet share expansion.
Before we determine the type(s) of customers that can help increase wallet share, it’s helpful to review the difference between “wallet share” and “market share.”
Market share, very distinct from wallet share, refers to the portion of a specific market within a particular company or product. It measures the company's performance relative to its competitors and indicates how much of the market a company has captured.
On the other hand, wallet share refers to the percentage of a customer's total spending on a particular product that a brand captures. For example, if a customer spends $1,000 on groceries every month and $600 of that is spent at a particular supermarket, that supermarket's wallet share of that customer's grocery spending would be 60%.
Gaining new customers increases market share while increasing customer spending boosts the share of wallet. Businesses need to focus on their existing customers and look into more ways to increase their spending.
In the competitive business world, market share and wallet share are two metrics that reign supreme. But when it comes to making savvy investment decisions, knowing where to focus your efforts is crucial.
50% of your existing customers will try out new products from your brand and will spend 31% more than your new customers.
Retaining your customers by 5% increases your profits by 25% to 95%.
Putting more effort into acquiring new customers can cost 16 times more than keeping your existing customers.
With these insights, prioritizing existing customers' sentiment and experience is key to increase share of wallet , more so than trying to attract new customers who initially spend less. Therefore, focusing on customer retention strategies is more beneficial to your business.
Creating industry-leading customer experience goes hand-in-hand with improving customer retention, which results in increased wallet share. Here are the three pillars in driving the share of wallet.
Customer retention strategies have no one-size-fits-all solution. However, below is a three-pronged approach that is guaranteed to move the needle.
If the goal is to drive customers to spend more, then one must ensure the end-to-end experience is designed with simplicity in mind.
of customers would abandon a brand after two to three negative experiences.
Performing a robust CX assessment is effective for determining friction points—areas of high customer effort—throughout your CX ecosystem. Oftentimes, this approach includes (but is not limited to) the following:
Constantly performing these exercises is the key to unlock what drives retention and greater wallet share.
Providing an exceptional customer experience is key when it comes to increasing your wallet share with customers. But creating such an experience requires a thoughtful strategy, and that's where partnering with the right experts can make all the difference.
Recognized by the Everest Group as the World’s Fastest Business Process (Outsourcing) Service Provider in 2022 and highly rated in Gartner Peer Insights Review, TaskUs is an expert in providing the best retail and eCommerce solutions for our clients.
We offer a suite of digital customer experience services that power customer experience operations, including customer experience consulting, wherein we work hand-in-hand with our clients to develop innovative solutions that set them apart from the competition.
At the heart of it all is our people-first approach, which ensures that we always put the needs of our clients and their customers front and center. We are committed to providing you with best-in-class customer support that will help improve customer retention and increase your wallet share.