How do I effectively track improved share of wallet?
For those of you who don't know what wallet share is, it is the percentage of the customer's overall revenue and profit potential that you are realizing. The tools to measure it and its improvement are extensive, ranging from a customized toolset that Bearing Point uses called SMART, to IBM's tools for the telecommunications industry that measure revenue, profitability and behaviors to come up with a customer value score that measures wallet share, to more classic integrated analytics tools produced by companies like SAS and other CRM vendors.
I can't speak to a formula because there are so many different approaches that it is mindboggling. Probably the most effective way to look at this is a measure that is used often called Customer Lifetime Value, which can identify the profitability and overall value of an individual customer over a "lifetime" with the measuring company.
There are many approaches, though the one that I subscribe to is from CRM industry veteran and guru, Mei Lin Fung. To find it, go here and you'll get an idea. For more detail, get CRM at the Speed of Light (my book) and check out Appendix A in the second edition; or email me and I'll send you the information. My email is email@example.com.
All the best,
Dig Deeper on Customer loyalty and retention
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