share of wallet

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Share of wallet, sometimes referred to as share of requirements, is the proportion of money that customers spend on a particular brand compared with their overall spend within a specific product category.

Share of wallet is useful in analyzing overall market share.
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Further discussion on Share of Wallet:

Marketers view share of wallet as a measure of customer loyalty. Share of wallet can be viewed as the market share a brand enjoys within a market that is narrowly defined by the people who have purchased that brand.

The share of wallet metric can help firms make decisions to:

  • allocate resources toward efforts to expand a category
  • take customers from competitors
  • increase share of wallet among the firms current customer base

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Share of wallet example:

In a given month, the unit purchases of YumCrunch brand of chocolate candy bars resulted in 2,000,000 bars sold. Among the households that bought YumCrunch, total purchases of candy bars came to 6,000,000 candy bars.

Total sales in the chocolate candy bar category is 6,000,000 candy bars. Sales of the brand YumCrunch yielded 2,000,000 candy bars.  To learn more about how to calculate share of wallet, see the share of wallet formula in the marketing math section.

Share of Wallet vs. Market Share

Share of wallet refers to a given brand’s share of purchases in its category, measured solely among customers who have purchased that brand. Market share refers to the units or revenue that a company or product controls within a market.

 

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