Often used in the context of sports, the phrase “the best defense is a good offense” suggests that the best way to protect your team and your goals is to foray into a competitor’s territory. In the current atmosphere, this can be applied to a shifting market where share of wallet is paramount for survival.
In a world that has seen such dramatic changes, two things have happened: Your customers’ priorities have no doubt been shaken and behaviours have changed, but also your competitor’s. Customers will be looking at best offers and vendors will scramble to best serve them, not to lose their business.
In these changed conditions and relationships, it is the perfect time to review the objectives for your B2B loyalty or incentive program. If your program design is on autopilot and still operating as though nothing has changed, you are flirting with disaster. Chances are that if your program doesn’t have a strategic design with share of wallet at the forefront, then your competitor’s program does. This means you’ve stayed offensive and even worse, passive and will lose business.
Your strategy must be to deepen your share of wallet and leave competitors in the offensive approach of price reductions, or margin fights which in the long run won’t do any good to their brand.
It’s not too late to adapt the design of your program to the changing market, but it is crucial to think of market share as your offence. Assess your program now and to your competitor’s tactics on how they go about the current situation.
In simple terms, share of wallet determines how much a B2B customer can spend on required business goods and services. This is not different to how you view your wallet. Grocery and supermarkets all vying for their piece of your weekly spend. Promotions, offers, advertising are the levers to get your attention. In the B2B market, you can follow a similar pattern. A rewards and incentive program can solve the challenge of increasing share of wallet.
While we see a downturn in a market or vertical, customer spending typically remains, although not at the same volume, value, or frequency as it was. The challenge becomes attracting repeat purchase from your customer base without having to resort to price reductions, offers or discounts.
An incentive and loyalty program with share of wallet at its heart helps navigate that price problem. Rather than using price to gain new customers, you use rewards to shift the spending. So, customers engage more heavily with you (especially if they’re also buying from a competitor). A good example is airline loyalty programs. They drive repeat purchases with status points. Customers often choose a more expensive airfare, simply to get the gold status and benefits! This way airlines gain more share of wallet.
Transfer this concept to the strategy of your B2B programs. The aim is to not just reward a transaction but to recognise customer loyalty and shift the value beyond a single purchase to one that benefits both individuals and businesses. Increasing a customer’s share of wallet is much more reliable and profitable than trying to acquire new customers.
