Increasing Your Share of the Customer’s Wallet

Increasing Your Share of the Customer’s Wallet

Revenue growth is critical to long-term success. Effective sales leaders know that there are two primary ways to grow revenue. The first is by adding new customers (logos) and expanding market share. The second is by increasing the share of your existing customers’ wallet. Share of wallet refers to the customer’s total spend relative to what your company is capturing with its products and services.

For example, most companies spend 3% of their revenue on IT. If the company has $100M in sales, their IT budget would be $3M. If the seller is currently doing $300K in sales with them, they have a 10% share of the company’s IT wallet. That means there is $2.7M of additional IT spend to go after. While winning 100% of the company’s IT budget is not realistic, the key question is, can the seller increase their share of the customer’s wallet? If yes, how?

If your company has a single product or service, have you sold it to only one of the customer’s divisions? If so, can you expand your offering to other divisions? Can you up-sell the customer from the standard product or service to the enterprise version? If your company has more than one product or service, have you mapped each customer for whitespace opportunities? Can you add products or services to expand your solution portfolio?

While adding new customers and expanding market share are important and necessary, they are also expensive and time consuming. Because it costs eight times more to acquire a new customer than it does to retain an existing one, increasing your share of the customer’s wallet should be pursued simultaneously to maximize account penetration and profitability. It is always easier to sell additional products and services to existing customers than to new ones.

All contents copyright © 2012, Josh Lowry. All rights reserved.

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