February 17th 2007
Share of Wallet , a sales metric you need to know, to improve the value of your company
I was recently reminded about the importance of share of the wallet. I.e. How much of your clients dollars (and need) available for what you are selling are you getting? I learned that a prospective client has sold (years back) a six seat licence of their software product to Microsoft. He was pleased to have Microsoft as a “client”. Think about it, only 6 people in a 71 000 man company “need” this product. A local (and younger) competitor has recently sold their similar product to Microsoft, but they have sold 100’s of seats, and continue to sell more. The prospect client should not be at all content with his penetration of Microsoft, and especially not with his share of Microsofts’ wallet. Share of wallet metrics are dear to savvy entrepreneurs’ and investors’hearts. (This is a part of selling that IBM did very well. ) Growth companies should have a handle on the share of wallet they are getting from every customer and “what they intend to do to increase it on a regular basis”. This is also an inexpensive way to increase sales. 6 seats out of 71 000 is nothing to be content about, nor does it do anything to continue to add to company value. A serious symptom of many things wrong in the sales and marketing process.
Reg Nordman (facing another (k)night on the road!)
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