Why "Share of wallet" campaigns are essential: Understand share of wallet and how brands use transaction data to increase their share of customer wallets.

By using transaction data to uncover share of wallet, businesses can pinpoint potential sales growth opportunities from existing customers and see what percentage of consumer budgets are heading to competing brands. It is an eye-opening indicator that helps businesses understand their position in the market and growth potential.

This guide will explain why wallet share is so important, how brands use transaction data to see their wallet share, and how they use it to maximize their share of customer wallets.

What is Share of Wallet?

Share of wallet refers to the amount of money a customer spends on your brand and not on competitors. It highlights the important questions that your brand has to answer, including:

• What is the average customer spending with your brand and with other brands in your sector?
• What percentage of spend do loyal customers attribute to your brand?

Getting the answer to these two questions will lead to the eventual question of, what can you do to make your business their preferred and exclusive choice?

Share of Wallet Example

If a customer spends $100 per month at restaurants and $25 of that is spent at your chain, then you have a share of wallet of 25%.

However, the significance of a 25% share of wallet depends on the number of competitors in your sector. If there are hundreds of other restaurant chains, then a 25% share of wallet could be seen as great. But if you are one of only four restaurants in the sector then a 25% share means there’s a four way tie for the top spot.

How does wallet share differ from market share?

"Market share" refers to the percentage of the market that your business holds. It can be calculated based on your revenue or the total number of customers you have. On the other hand, "share of wallet" is a more specific measure that looks at how much a particular customer spends on your business compared to your competitors.

Why is the share of wallet important?

The share of wallet metric gives you a better understand your customers' purchase behaviors to increase customer loyalty and customer retention.. It can also be faster and more efficient to increase the share of wallet rather than your market share.

Here are some of the many reasons why the share of wallet is vital for your business:

Increases loyalty and customer retention

Customers decide with their wallets. This makes the share of wallet a critical indicator for businesses because the more loyal customers are to your brand, the higher your revenue will be.

By understanding your customers' behaviors, you can offer them more suitable products and thus increase their loyalty and retention.

Improves Revenue Potential

Have you reached the full revenue potential of your current customers? There is likely room to increase the share of each customer. Here are some areas where you can drive revenue growth:

• Incite frequent purchases in your store
• Incentivize bigger ticket size with promotions
• Cross-sell other relevant products and services or brands in the same group

Gives You a Competitive Edge

Competing with other businesses is not just about attracting new customers. Retention is important, and businesses that spend time and effort cultivating relationships with their regular customers have a significant advantage in the market.

Loyal customers tend to spend more, buy more frequently, and leave positive reviews. They can even become volunteer ambassadors for your brand. Brand loyalty cannot be bought, but it can grow over time. Having loyal customers gives you a competitive edge because you know these customers will always choose you.

Improves Understanding of Customer Behavior

Customers consider multiple factors before making a purchase. This usauly includes price, convenience, brand perception, word-of-mouth, and reviews. However, in some cases it's hard to see which variable made difference.

Which campaigns and message incentivized your audience to make a purchase? Why did loyal customers purchase from a competing brand during the summer sales? The share of wallet can uncover what works and what needs improvement when analyzed during defined periods.

How PayLead Measures Share of Wallet?

With access to transaction data from the biggest network of financial institutions across France, Belgium, and Spain, PayLead uses pseudonymized data to create representative samples of each population’s spending habits.

After creating a representative sample with top-of-wallet cards, which are the primary payment cards of consumers, we calculate the share of wallet by calculating the percentage of spend that the audience attributes to your brand in a given period. After measuring your share of wallet, you have insight into what your customers spend with your competitors.

As noted by Dally Kane, who manages the acquisition clothing brand Le Slip Français in France, “ “With PayLead, I have the full picture of my client's spending with competing brands across the garment and undergarment industries.”

Using transaction data to lift your brand’s Share of Wallet

With purchase insights that identify your share of wallet with transaction data, you can use PayLead’s payment marketing platform to create campaigns that target clients with card-linked offers. What are card-linked offers? They’re targeted offers sent to segmented audiences that are presented as cashback rewards bank clients can earn when shopping with your brand.

Together with leading brands and retailers, we create Share of Wallet campaigns that pinpoint clients with which they have a lesser share of wallet and incentivize them to make their next purchase in one of their stores instead of at a competitor's.

After collaborating with Cooltra, an electric scooter rental service, we increased their share of wallet in France by a substantial +51 points that came to the detriment of competing transportation services. The same was true for Franprix, who saw a +14 point increase in wallet share from clients in the supermarket sector, notorious for high customer volatility.

Today, more and more brands are actively using transaction data to get the full picture of their customer's spending. If you want to unlock purchase insights and utilize them in a platform that makes transaction data actionable, PayLead is uniquely positioned to help retailers leverage this resource across France, Belgium, and Spain.