Products
A shoe company generates an average of $120 a year in sales for each customer. The average customer spends a total of $500 on shoes each year.account penetration = (120 / 500) × 100 = 24%Services
A customer spends $900 a year on digital entertainment and spends $10 / month on your streaming music service.account penetration = (10*12 / 900) × 100 = 13.3%Business to Business
An investment bank spends $1 billion on information technology each year and spends $9 million dollars on your software services.account penetration = (1000 / 9) × 100 = 0.9% Calculation of account penetration is typically based on comparable products and services. In other words, the sales that you could realistically win if you had all of the customer's business. As such, it is calculated relative to your product line. For example, if you only sell rain boots, it's unlikely you could win your customer's entire shoe budget.| Overview: Account Penetration | ||
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Definition | A sales metric based on the ratio of your sales to an customer versus their total spend on competing products and services. | |
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