Increase Wallet Share with These Three Proven Strategies!

By focusing on increasing wallet share, businesses can tap into more potential revenue.

Published on April 7, 2023
Last Updated on June 19, 2023

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.”

Wallet Share vs. 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.

Why Does It Even Matter?

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.

The Three Pillars to Drive Wallet Share

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.

  1. Reduce customer effort by simplifying how customers engage with your brand
  2. Create a feeling of exclusivity and emotional connection through interactions within your CX ecosystem
  3. Enable agents to offer timely and meaningful suggestions to customers through effective cross-selling based on customer data (e.g., purchase history)

Customer retention strategies have no one-size-fits-all solution. However, below is a three-pronged approach that is guaranteed to move the needle.

1. Reduce customer effort

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.

86%

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:

  • Customer journey mapping (e.g., identifying inefficient processes and/or under-performing technology/automation)
  • Assessing engagement channels (e.g., determining whether your brand’s channel strategy aligns with customer preferences)
  • Evaluating how well frontline staff is equipped to assist customers with achieving their goals (e.g., contact handling tools such as a CRM and Knowledge Base)

Constantly performing these exercises is the key to unlock what drives retention and greater wallet share.

2. Create a feeling of exclusivity

It’s human nature to want to feel special or to belong to something. Customers who are fully connected to a brand can consistently generate greater wallet share.

Emotionally connected customers are 52% more valuable than customers who are just highly satisfied.

While multiple avenues exist to create emotional connections through exclusivity, creating a loyalty program is near the top of the list. Below are a few dynamics for consideration as you look to develop a loyalty program:

  • Premium support offering -- Segmenting customers based on spend (or other characteristics) and providing them with accelerated avenues for support is a powerful way to drive customer loyalty and retention.
  • Point-based reward system -- Offering customers points based on purchases to entice higher purchase frequencies and order sizes.
  • Early access to new products -- Providing top-tier customers with product offerings that have yet to hit the mainstream market drives higher brand engagement and a sense of uniqueness.

3. Enable personnel to up-sell and cross-sell

Developing share of wallet strategies by reducing customer effort and creating a sense of exclusivity can help drive emotional connections with your customers and can result in an increased likelihood of up-selling and cross-selling conversion. Companies who enable staff with the following typically yield higher conversion rates:

  • Robust training that emphasizes empathy, reading customer cues/tones, introduces psychological behaviors related to purchasing, and provides opportunities for role-playing.
  • Omnichannel retail strategies that allow personnel to personalize the customer interaction through readily available customer data (e.g., a 360 degree of the customer’s history with the brand that may include how long they’ve been a customer, typical products they purchase, age, area of residence, etc.).
  • Tools/AI that suggest add-on sales/services (e.g., automation that considers customer purchase history and prompts personnel to position a specific product)

You + Us = Creating 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.

  • 1^Share of Wallet vs. Market Share
  • 3^Prescription for cutting costs
  • 6^Gartner Peer Insights Review
Customer Retention = Higher Conversion Rates
Talk to Us today

References

Josh Semler
Senior Consultant
Josh has a unique background in management consulting, project management, and sales leadership within the CX space. He’s spearheaded transformative initiatives across a variety of industries with an emphasis on enhancing the customer experience through robust analysis, strategic roadmap development, and solution implementation.
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