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What is Share Of Wallet?

 , March 16, 2016 updated on January 06, 2017
Share of wallet is the percentage of a customer's total spend that is captured by a business.

Calculation

Share of wallet is based on your total revenue from a customer for a period of time. Calculation also requires estimates of the customer's total spend on similar products and services. Total spend is often defined broadly as customer spending on an industry such as information technology spending.
share of wallet = (total revenue / total spend) x 100
Total spend can be collected by customer surveys or estimated from data sources such as financial statements.

Value

Expanding share of wallet is a common marketing and sales strategy. Firms that have a small share of wallet enjoy a opportunity to develop and sell new products to existing customers. Share of wallet is a particularly common sales metric for industries that sell to large firms with significant budgets.

Example

A data center company that offers colocation services finds that it has a share of wallet of less than 1% for its corporate customers. The firm invests in developing new products and establishes a sales goal to achieve a 5% share of wallet.
Overview: Wallet Share
TypeSales Metric
Marketing Metric
DefinitionThe percentage of a customer's total spend that is captured by a business.
Related ConceptsMarket Share
Market Penetration
Customer Lifetime Value
Customer Profitability
Sales Metric
Marketing Metric

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