Definition

share of wallet (SOW) or wallet share

Share of wallet (SOW) is a marketing metric used to calculate the percentage of a customer's spending for a type of product or service that goes to a particular company. For example, if a customer spends $60 a month at fast food restaurants, and $30 of that amount is spent at McDonald's, McDonald's has a 50% SOW for that customer. The term is sometimes expressed as wallet share.

Share of wallet vs. market share

Wallet share and market share are two distinct terms. As described above, wallet share refers to how much of a customer's expenses for a category of product or service goes to a particular company. For example, a value-added reseller may have a 60% wallet share of a customer's spending on storage products.

Market share, meanwhile, refers to the percentage of what a company earns of the overall spending in an industry or product market. If the total price of all-flash array (AFA) systems sold worldwide is $800 million, and a particular vendor sells $200 million worth of AFA systems, then that vendor's market share for AFA systems would be 25%.

Strategies for increasing customers' wallet share

Increasing wallet share is often easier than increasing market share. Strategies aimed at gaining wallet share include trying to increase the average amount that a customer spends per visit, encouraging more frequent visits and fostering customer loyalty and customer retention. 

This was last updated in March 2017

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