What is Share of Wallet?
The Short Answer
Share of Wallet explained simply
Share of Wallet is a key marketing metric. It tells you how much of a customer's total spending in a specific product or service category your business captures. For example, if a customer spends $100 a month on coffee, and they spend $70 of that at your coffee shop, your Share of Wallet for that customer is 70%. It's not about how much they spend overall, but how much they spend with you in a particular area.
Real-World Example
The Coffee Shop Scenario
Imagine a customer, Sarah, who loves coffee. She spends $150 per month on coffee. She buys $75 worth of coffee from "The Daily Grind" (your shop), $50 from "Bean There, Done That," and $25 from "Caffeine Corner."
To calculate your Share of Wallet for Sarah:
$75 (spent at your shop) / $150 (total coffee spending) = 0.50 or 50%
This means "The Daily Grind" has 50% of Sarah's coffee spending.
Why this matters
Understanding your Share of Wallet helps you see how loyal your customers are. A higher Share of Wallet means customers prefer your business over competitors for certain needs. It also shows you where there's room to grow. If a customer spends a lot in a category but not much with you, you have a chance to win more of their business.
Focus on increasing your Share of Wallet by offering excellent service and targeted promotions. It's often easier to get existing customers to spend more than to find new ones.
Focus on increasing your Share of Wallet by offering excellent service and targeted promotions. It's often easier to get existing customers to spend more than to find new ones.
Need to find buyers fast? Launch AI social ads.
Our AI-powered social ads help you reach the right buyers quickly and efficiently.
