Loyalty Register glossary
Share of wallet
The percentage of a customer's total spending in a category that goes to your business rather than to competitors.
Share of wallet, also called wallet share, is the percentage of a customer’s total spending in a category that goes to your business. If a member spends $500 a month on groceries and $300 of it is with you, your share of that member’s wallet is 60%.
Updated · By Loyalty Register Editorial TeamRelated terms
What is the share of wallet formula?
Share of wallet = your sales to the customer ÷ the customer’s total spending in the category × 100. The same formula works for a segment: add up the sales and the category spending for the group. Keep the time period and the category definition the same on both sides, because a wider category lowers the answer.
How is share of wallet different from market share?
| Share of wallet | Market share | |
|---|---|---|
| Base | One customer’s or segment’s category spending | All spending in a market |
| Question | How much of this customer’s spending do we get? | How much of the market do we get? |
| Main use | Growth from existing customers | Competitive position |
You can hold a high market share with a low share of wallet if many customers buy from you only occasionally. Wallet penetration is a neighboring term, often used in coalition and partner programs for the share of a member’s spending that goes to any of the program’s partners. Check the denominator whenever you compare figures.
Why is it hard to measure?
You see your own sales but not what the customer spends elsewhere, so the denominator has to be estimated. Common sources are customer surveys, card-spend or panel data bought from third parties, co-brand card data where a program has it, and models that infer category spend from household traits. Each has error, so report the figure with a note on how the denominator was built. Survey recall is rough, so read those answers as a range.
Why does it matter to a loyalty program?
It shows room to grow. A member with high category spending and a low share has more to give than a member who already spends nearly everything with you. Gains from existing customers are often cheaper than acquiring new ones, but only if the reward costs less than the margin on the extra spend. Reading share by segment next to total spend separates the members worth a growth offer from those near the ceiling.
How do you increase share of wallet?
- Spend thresholds that reward consolidating purchases with you.
- Category bonuses for what a member buys elsewhere today.
- Tier benefits that make a single brand the sensible default.
- Personalized offers based on gaps in a member’s basket.
Test each against a control group, since many members would have spent more anyway.
What should you watch?
Share can fall even when your sales hold steady. In a hypothetical example, a member who keeps spending $300 a month with you while their total grows from $500 to $700 drops from 60% to about 43%. The reverse is also true: a rising share can mean the customer is spending less overall. Track spend and share together.