Portfolio share

It is a sales metric that indicates the average amount consumers spend on a company's products or services compared to the amount consumers spend on competitors' products or services.

What is Portfolio Share?

Portfolio share is a sales metric used by companies to segment their goods and services, showing how much (on average) consumers spend on a company's products and services compared to how much they spend on competing products and services. In other words, it indicates the percentage of total consumer spending on a particular product/service that is spent on purchasing Company X's brand.

Portfolio share is a practical measure of how competitive a company's products or services are in the market. It is also an indicator of brand loyalty, overall market size and potential sales growth. Share of Wallet can be viewed for a specific product or service, or it can be viewed to measure a consumer's total spending on all a company's products or services. It is a metric commonly considered in the financial services industry to determine the expected lifetime value of a client or customer.

Overview:

• Share of Wallet (SOW) is a sales metric that shows how much (on average) consumers spend on a company's product or service compared to the amount they spend on competing products or services.
• SOWs can be viewed for a specific product or service, or can measure total average consumer spending on all company products or services.
• Businesses can increase their wallet share by selling complementary products and taking steps to increase consumer brand loyalty to their business.

What are Examples of portfolio sharing?

Suppose Company X sells hair care products and wants to determine how it performs in the market. To achieve this and secondly to get ideas to increase sales, the company decides to calculate its share of the portfolio. Market research data shows that the average consumer spends $100 per month on hair care products. The company's internal marketing data shows that customers spend an average of $35 per month on hair care products. Her share in the portfolio is therefore 35%.

Whether 35% is a good or a bad percentage of your portfolio depends a lot on the competitiveness of the market for a particular type of product, i.e. the number of competitors in the market. If there are only two companies selling hair care products, it indicates that the 35% share of these companies is not very good. This is because the only competitor has an almost double share of 65%. However, if there are 50 active competitors in the hair care market, a 35% share of the portfolio is considered exceptional.

Why Wallet Sharing Matters?

Due to the fundamental nature of product sales, wallet share is an important sales metric. Marketing studies show that making additional sales from existing customers costs a business 5-7 times more than winning new customers. So, focusing on the spending habits of your existing customers can be a great boon to your business as you decide how to increase your bottom line. Collecting wallet data can also give you valuable insights into why consumers are buying or not buying your company's products. This information is very helpful in assisting your company's marketing department in developing the sales and advertising campaigns that are most likely to generate additional sales and revenue. It can be useful.

How to increase your company's wallet share?

The end goal of examining a company's wallet share is to determine how its wallets can be increased, i.e. H. how existing customers can be enticed to buy more of a product or service and how new customers can be attracted. Here are some of the most commonly used methods to increase wallet share:

1. Get to know your customers better: If you want consumers to spend more on your company's products or services, you need to know what they are spending in that product category. via customer search, You can see what specific factors motivate consumers to buy one product and not another. For example, is the final price an important consideration or is customer service more important? Perhaps your customers are primarily looking for specific benefits. For example, electronic equipment buyers may be particularly attracted to products that are easy to install and configure.

2. Sell additional products: One of the common ways to increase portfolio share is to offer complementary products that complement the core product. Therefore, a company that sells shampoo can increase its market share by also selling hair conditioners and hair coloring products.

3. Increase brand loyalty for your business: Increasing customer loyalty to your company's brand is one of the most effective ways to increase your portfolio share. This can be achieved using designed marketing tactics to actively engage, build and strengthen relationships with consumers. Consider creating or expanding your company's social media presence. Provide consumers with useful, free information by posting articles about your company's products or services on your website.