market share vs. share of wallet

Question

Hi, I read this question and answers, I found it very interesting and useful.

https://www.preplounge.com/en/consulting-forum/how-to-identify-which-market-to-grow-10910

I have a question on top of this -

Is it fair to consider “ the large the waller, the smaller the share of wallet, the better this customer segment to grow in"?

In order to grow our share of wallet and in the end to grow our revenue, we need to -

- identify how to best align our offerings to suit the customer needs

- identify how to differentiate ourselves from the competitor

Answer 1

Share of wallet is simply how much a customer spends on a brand/product/service. So, don't confuse this with market share They are two different concepts.

Growing share of wallet is about getting existing customers to spend more and this can be done many ways such as launching new products, bundle pricing etc. Market share is about attracting new (and more) customers. Both concepts when done well lead to increase in revenue.

Hope that helps.

Answer 2

Hi there,

Glad to hear we helped!

I'm sorry but this sentence doesn't make sense: “ the larger the wallet, the smaller the share of wallet, the better this customer segment to grow in"?"

A customer wallet size specifically relates to how much they spend at your company or in the market…so, a wallet is a wallet is a wallet…I don't understand how share comes into play here.

Additionally, many factors affect how good the customer segment is. Their wallet is just one of many. Others are: how many customers, their stickiness, growth, etc.