What Gaining a Greater Share of Wallet Can Do for Your Business

When was the last time you reviewed the objectives for your B2B incentive program?

WRITTEN BY:

Matt Griffiths

General Manager Sales & Marketing

Matt is an experienced B2B Loyalty & Incentive program designer with over 20 years working with Australian and New Zealand brands. Passionate about partnering with businesses to understand specific business and sales pain points, he takes a consultative approach to develop engaging solutions for customers that deliver measurable results.

CLASSIFIED UNDER

Pain Point, Rewards Marketing, Share of Wallet, Solution,

“The grass is always greener on the other side”. It’s a great piece of advice, meaning that looking at what everyone else is doing will only make your efforts appear less impressive – but in B2B, it’s important to take stock of what your competitors are doing.

This takes centre stage when considering share of wallet – it’s integral to monitor both your own and your competitor’s position in the market, especially when considering the strategic design of your own B2B loyalty program.

This applies doubly so when referring to the complex economic markets across Australia and New Zealand – cost of living pressure flows are rising and flow into market into different ways, so a focus on not only increasing your share of wallet but protecting what sales you have is critical to secure baseline profits and potentially gain growth, whether it has been forecast or not.

In this piece, we’re going to explain share of wallet, and break down some benefits on how this can work to save your business time, money, and headaches.

Let us show you how to increase share of wallet!

What is share of wallet?

When thinking about the economic factors in consumer relationships, a priority is placed on needs-based spending rather than wants. This can be considered by the example of against groceries as supermarkets compete for weekly spending. Promotions, special offers, and advertising all serve to push your attention to specific brands, as each of these businesses battle to earn your dollar.

For B2B, the challenge is similar, and regularly factored into the creation and program design of a rewards or incentive program. This inclusion becomes even more important when market conditions change to become more uncertain, or when your competitors increase their activity in the market.

An economic downturn doesn’t necessarily lead to a huge decrease in B2B spending, as these purchases are considered and likely play a part in business operations. That’s not to say that business is booming – the frequency or volume of said purchases may reduce, but they won’t cease making them.

So, if these purchases are likely to continue, what can you do to retain customers and entice repeat purchases without lowering your costs to beat competitors?

Transfer this concept to the strategy of your B2B programs. The aim is to not just reward a transaction, but recognise customer loyalty and shift the value beyond a single purchase to one of the benefits for both individual and business. Increasing a customer’s share of wallet is much more reliable and profitable than trying to acquire new customers.

Designing a program with share of wallet as a key pain point to solve addresses your pricing problem. These programs operate as a way of providing additional value to your customer base, creating a trade between their continued loyalty and future benefits provided on top of what your products or services are already providing them.

Showing your customers what they can earn by simply continuing to do business with your brand, provides them an incentive to focus on or favour your brand over competitors.

With B2B reward or incentive programs, the aim is to recognise customer loyalty and move the value beyond a one-off purchase in exchange for a secured long-term commitment. This encourages customers to stay with your brand and is much more profitable than attempting to acquire new customers.

What can increasing share of wallet do for your business?

Share of wallet plays an important role in your program design by allowing you to calculate and defend the program’s return on investment. This can even be calculated into a program dashboard (something we always do – trust us, it helps!). The benefits don’t end there – here are some additional benefits your brand can expect to encounter with a well-constructed program:

Price Protection:

By committing to protecting your margin in a difficult market, you can ensure high returns to the business by gaining a higher share of wallet. This can then be returned to the customer through reward values, which allows you the flexibility of retaining your original prices while still demonstrating additional value and benefits to the customer without reducing anything. Maintaining your margins while increasing sales allows you to extract the maximum ROI of your program – and ensures that it’ll continue to play an important role in your business, moving forward.

Save on Sales and Marketing:

Through continued promotion of your program, it can serve as an important sales tool. By segmenting customers in the program, you can send targeted communications to your participants, keeping your product front-of-mind as they come due for their next purchase, or when you notice that they’ve been absent from the program for a prolonged period. This allows you to save on new sales staff and marketing team members at a time when all expenses need to be considered heavily.

New Customer Acquisition:

While it’s common knowledge that attracting new customers can be up to five times more expensive than keeping existing ones, by shifting some of your customer acquisition resources to promoting your program, you can broaden uptake and potentially secure growth in a difficult time. By demonstrating the value and benefits that program participation provides your members, new customers will need to weigh this up against their existing purchases – and a well-designed program will present additional value over competitors.

When considering share of wallet from a design standpoint, it’s important to have these elements in mind:

Make sure your program has both soft rewards (a sense of belonging, special treatment, status and appreciation) and higher-tier service levels and customisations to both increase the attractiveness of the program and cater to a broad spectrum of participants. By making sure your program has something for every level of user, it can increase the perceived costs of switching the point of purchase, enhancing share of wallet.
Similarly, provide a variety of rewards for your customers to choose from to account for individual preferences and maximise customer utility. By providing quality rewards for a selection of your customers, you can enhance the chance of catching someone’s eye with your program.
Create a dedicated communications strategy that focuses on motivators to shift the share of wallet spend. Keep purchasing habits and customer data in mind – the more you can tailor your communications, the more effective they’re likely to be.

So, with these important factors in mind, there’s only one question left to ask – what is your business doing to prevent low share of wallet?

If you want to grow share of wallet – we’re here

Reach out and chat about getting your brand front-of-mind and beating out the competition – we’ve been creating B2B loyalty programs for Australian and New Zealand businesses since 1996, so you can trust that we know what we’re doing.

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