Increasing “Share of Wallet”
Marketers define “Share of Wallet” as the proportion of total spend that a customer is spending with you. Every company calculates this in different ways. Some companies define share of wallet based on total spend, others by product brand or category, others by geography. But however you decide to define it, share of wallet is simply the amount your customer spends with you divided by the total amount they spend.
Calculating share of wallet can be difficult without strong sales management and advanced analytics; however, even an estimate of share of wallet can help you understand the relative strength and position you hold in your customers’ preferences.
Dealing with the Cherry Pickers
By understanding share of wallet, you can increase customer loyalty, increase repurchases and find new marketing opportunities. We all have what distributors call “cherry pickers” in our customer base. Cherry pickers buy one or two things from you and nothing else, even though you’re a full-line distributor. How can we get them to buy more from us in other product lines they’re buying from our competitor? A good place to start is with basic education. Do they know what products you sell without having to sift through a hefty catalog or your web order entry system? Sometimes large catalogs are too much work for the customer so they resort to making their purchases with the same distributors they always work with even if they are not happy with that relationship. Maybe the customer understands your full line but you haven’t made it convenient enough to switch.
A great selling technique you can use to understand and increase your share of wallet with a customer is a report card. A report card is a high-level overview of their year-to-date purchases as well as a summary of their purchases from the previous year. This data is organized into the major product lines you carry. Running a report card is easy with SMP. You simply open the Customer Information Screen and run the “Report Card” report. Your sales reps now have valuable selling tool for their next customer visit in less than a minute. Your reps can easily start a conversation about your product lines, your customers’ needs and offer to quote for more of their business.
Robust and actionable data from SMP combined with messaging tools and our tight integration to your distribution ERP system can result in numerous opportunities to increase your share of your customers’ wallets. With SMP you can:
- provide immediate communication to customers when a particular discount or vendor rebate is available to extend the lines they purchase from you.
- create one-to-one messages based on your customers buying profiles
- provide your staff with data that makes their jobs easier, like transaction history from your back-end systems
- create reports and dashboards that identify new product positioning opportunities