WHAT IS “WALLET SHARE”?
“Wallet Share” is essentially the total assigned budget that a company has to spend on services which are provided by your company.
Take a printing business for example. Company ‘A’ may spend $10,000 per annum on printing services, therefore their total printing budget (or “wallet”) is $10,000.
Wallet Share is the share that the printing business receives of this $10,000 from Company ‘A’ to pay for printed services.
WHY YOUR CUSTOMERS DON’T SPEND ALL OF THEIR BUDGET WITH YOU
There are 3 reasons that a customer may not spend their entire budget with your company:
- They don’t know that you can provide the other services that they need
- They spend some of it elsewhere as they can get it cheaper
- They spend some of it elsewhere as there is a higher perceived value (quality, speed, service)
They don’t know that you can provide the other services that they need
In the authors opinion, this is one of the major failings in most small to medium businesses – they don’t communicate to their new customers what else they can provide; if you are spending thousands of dollars to attract a new customer, and they purchase one of your products, and you don’t work with them to find out what else they buy from your competitors – you have not won a customer, but rather lost an opportunity.
They spend some of it elsewhere as they can get it cheaper
In a price driven market, your customers are purchasing from multiple suppliers for some of their budget spend purely based on price. We all know that the cheapest deal isn’t always the best. This presents a unique opportunity to present your value proposition to your customer and win more wallet share as a result.
They spend some of it elsewhere as there is a higher perceived value (quality, speed, service)
Your customers are involved in purchase cycles with your competitors. Let’s not stick our heads in the sand about this. Very few of your customers purchase all of what they need (in your sphere of influence) from you. Why? It’s because your competitor has told a different (and better) story than you. What’s important to your customer? Why is this important to them? How can you tell a better story than your competitors?
WHY INCREASE WALLET SHARE?
Increasing Wallet Share is not just about making more money from less customers, it also means that you can form a stronger (and therefore harder to break) relationship with them. For the more products you can provide to your customers, your value proposition increases; you understand your customers business’ better and you’re able to make recommendations which make sense (and hopefully ease a point of pain for them). All of this means that it’s harder for your competitors to steal a customer from you on price alone, and you’re able to charge more for what you provide.
WHAT AN INCREASE TO WALLET SHARE COULD MEAN FOR YOUR BUSINESS
Increasing Wallet Share from your customers means:
- Ability to provide better service
- Decrease risk of loosing business to competitors
- Increase profit
- Increase value provided to your customers
- Spend more time with each customer
- More profit from fewer customers
- More “stickiness” to your company
HOW TO EXPAND YOUR CUSTOMERS’ KNOWLEDGE OF YOUR SERVICES
There are several effective ways of increasing your customers ‘ knowledge of your services. The most effective of all is a conversation. Talk to your customers and talk to your prospects. Don’t be an order taker, but rather, become a consultant.
Ask your customers questions:
- Apart from this job that we are doing for you, what else does your company currently outsource over a 12 month period?
- In the next 3 months, what plans do you have to require similar services to this?
- Do you currently perform tasks internally which we may be able to take off your hands, freeing up time for your staff to focus on their core business?
Hold an “open house”
If your customer base consists of many customers who buy just 1 or 2 products from you repeatedly, it may be time to educate them on what else you can provide.
Holding an “open house” may be a great idea to increase your customers’ knowledge of what other services you do provide.
An open house is generally an event where you would invite your customers to a luncheon, or afternoon function and showcase your offering in an informal setting.
This allows you to promote everything you do, to a captive audience. You may also choose to put on food and drink at this event and share it with a symbiotic business where they also invite their customers, giving you both the opportunity to increase your customer base.
At the event, you would display your products / services and may also choose to have a speaker who gives a short, yet effective overview of all that your company can provide.
YOUR PERFECT CUSTOMER, AND HOW TO FIND MORE OF THEM
Stay tuned. Next time I will be talking about identifying your perfect customer, and how to find, attract and sell to more of them.