Market Share vs Wallet Share: The Critical Battle for Business Growth

In the dynamic business world, marketing a business is considered to only relate to visible presence such as social media, LinkedIn, networking or eye-catching advertisements. However, marketing is far more than just these activities.

When looking at any business, there are two distinct life stages identified: Market Share- the building phase and Wallet Share- the growth phase.

Market Share- Building Your Business

For businesses in their early stages, building a strong client base is a core focus. This is the beginning of your business journey, where you aim to attract clients/customers who are interested in your services or products. A common mistake here is adopting a spray-and-pray approach that can lead to lower conversion rates and attracting the wrong type of client/customer due to being unclear on who your actual target market should be.

Take time to review your current marketing efforts within your business:

• How aligned are your current marketing efforts with attracting your ideal clients/customers?

• Do you test and measure to understand if your efforts are getting you the right results?

• Do you have a clear understanding of what your niche is in your industry?

Wallet Share: Growing Your Business

Businesses with an established client/customer base have a shift in the challenge of the 'WHO' to the 'HOW'. How do you expand and grow your existing relationships with your clients/customers to ensure sustainable growth? As business owners, we can become complacent by relying too heavily on long-standing clients/customers. What you need to ask is what will happen to your business if those clients/customers do not return as frequently. The reality is that your business growth suffers. Even with a strong client/customer base, it is crucial not to "put all your eggs in one basket" by implementing a system that continuously seeks new business, whether in the form of referrals or other avenues.

Evaluate your client/customer engagement strategies:

• Are you consistently adding value and staying relevant in your clients'/customers' minds?

• Are you adapting to their changing needs, or relying on outdated methods?

Market Share vs. Wallet Share

At this current stage of your business, take some time to reflect on whether you are seeking new clients/customers to increase your market share or are aiming to maximise the profitability of your existing clients/customers with the focus of improving your wallet share.

What to look at:

• Evaluate Your Existing Customers: Are you nurturing relationships with your most profitable customers? What more can you offer them to increase their spending with you?

• Your Customer Segmentation: How well do you know your customers? Segmentation can reveal opportunities for specific marketing efforts that will increase wallet share.

• Your Value Proposition: Is your value proposition still compelling to your current customers? Regularly revisiting and refining it can help in maintaining and growing their loyalty.

• Most profitable: Identify the top 20% of your clients/customers who contribute to 80% of your profits. When you have this understanding, you will know your way forward with your marketing strategy.

For businesses in the Market Share phase, your focus is on generating cash flow and establishing brand recognition. For those in the Wallet Share phase, the focus is to optimise your return on investment for both the time and money spent.

It is important to consider whether your business goal is to increase market share or maximise your wallet share, when doing this your marketing approach will define the successful growth of your business. Choose wisely, act boldly, and the results will follow.

If you are looking for guidance, I encourage you to attend one of my webinars or seminars or take up a quick call to chat further about your business.