Market Share vs. Wallet Share

Growing market share is a tough thing to do.  This concept (by definition) requires you to add net-new customers at the expense of your competitors.  If the market is worth your time, competition will be fierce, barrier to entry is high, and sales cycles can be long.

Growing wallet share, on the other hand, leverages existing relationships that you already have, with customers who already buy from you (and are presumably happy with your product or service), to sell a related product.  For example, car dealerships grow their share of your wallet by pushing extended warranty packages when they sell new vehicles to consumers.  The effort (and cost) of adding this ancillary product is usually much lower, the sales cycle shorter, and the margin higher (in part because of the lower costs of sales).

To satisfy the endless need for quarterly/annual growth, companies are always trying to find ways to increase wallet share to augment their search for new core-product customers. They do this by acquiring existing companies/technologies or developing them on their own, and they do it because they know it’s sometimes easier than simple organic growth.

At the individual contributor level (that’s you and me), these new products and services represent an awesome opportunity. They give us a new reason to visit our customers, represent upside for quota retirement and earnings potential, and probably most importantly, increase our level of “stickiness” (which we’ll discuss in a future post).

So instead of complaining the next time your company acquires or introduces a new product (that your boss forces you to learn and pitch to your existing customer base), embrace it.  It’s a hell of a lot easier than cold calling.

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One Response to “Market Share vs. Wallet Share”

  1. More for the Same « Intelligent Selling Says:

    […] Opportunity to Grow Wallet Share by “seeding” other products or […]

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