shareofwallet

Share of wallet is a marketing term that refers to the percentage of a customer's total spending within a specific product or service category that a particular company captures. It measures how much of a customer's budget for a given need is allocated to one brand or business compared to its competitors. For example, if a customer spends $100 on groceries per week and buys $30 worth of goods from Company A, Company A has a 30% share of that customer's grocery wallet.

Understanding share of wallet is crucial for businesses as it provides insight into customer loyalty and competitive positioning. A high share of wallet indicates strong customer relationships and effective product or service offerings. Conversely, a low share of wallet suggests that customers are dividing their spending among multiple competitors, potentially due to price, product variety, convenience, or customer service issues.

Companies aim to increase their share of wallet by fostering customer loyalty, offering superior value, expanding product lines to meet more customer needs, and improving the overall customer experience. Strategies to achieve this include loyalty programs, personalized marketing, bundled offerings, and excellent customer service designed to encourage repeat purchases and higher spending per customer. It is distinct from market share, which measures a company's sales as a percentage of the total sales in a given market. Share of wallet focuses on the individual customer's spending behavior.