Share of Wallet (SOW) Explained: How It Works, Types, and Examples


Share of wallet (SOW) is the portion of a customer’s regular spending allocated to a specific brand rather than its competitors within the same product category. Companies aim to enhance their share of wallet by offering a range of products and services, ultimately maximizing revenue from each customer. This strategy can lead to increased revenue, improved client retention, enhanced customer satisfaction, and greater brand loyalty.

What is share of wallet (SOW)?

Share of wallet (SOW), a crucial concept in business and marketing, refers to the portion of a customer’s spending that is consistently directed towards a particular brand instead of competing brands within the same product category. It’s a metric that companies use to evaluate and enhance their revenue from existing customers. In this article, we’ll delve into the intricacies of share of wallet, its significance, benefits, and how it differs from market share. We’ll also explore strategies to grow share of wallet and provide real-life examples to illustrate its practical application.

Share of wallet vs. market share

Share of wallet and market share are distinct concepts that focus on different aspects of revenue growth.

Share of wallet

Share of wallet concentrates on maximizing the amount of money customers regularly spend on a specific brand rather than its competitors. This approach involves identifying loyal customers, offering additional services, and introducing new products to increase customer expenditure. The primary goal is to build customer loyalty and enhance revenue from the existing client base.

Market share

Market share, on the other hand, measures a company’s percentage of total sales within a specific market or product category. It’s all about acquiring new customers and competing with other players in the market. Market share analysis helps businesses understand the size of the opportunity in a given market segment.

Both share of wallet and market share aim to boost revenue, but their strategies differ significantly. While increasing market share involves attracting new customers, growing share of wallet centers on increasing revenue from existing clients.

Benefits of maximizing share of wallet

Boosting a customer’s share of wallet comes with a range of advantages that extend beyond revenue growth:

Added revenue

By encouraging existing customers to spend more on your brand, you can significantly increase revenue. This revenue growth may come from upselling additional products and services.

Improved client retention

Loyal customers are more likely to stick with your brand, resulting in enhanced client retention rates. Satisfied customers tend to remain loyal and continue doing business with your company.

Customer satisfaction

As customers increase their spending with your brand, they are likely to experience more value and benefits. This can lead to higher levels of customer satisfaction and a positive perception of your company.

Brand loyalty

When customers consistently choose your brand over competitors, it fosters a sense of loyalty. Brand loyalty can lead to repeat business and recommendations to others.

Target marketing to grow share of wallet

To increase share of wallet, companies often employ targeted marketing strategies aimed at outperforming competitors. This approach involves identifying what customers find attractive in competing brands and addressing those factors. It may include:

  • Improving product quality, pricing, or convenience.
  • Adapting innovative features and services.
  • Identifying logical product extensions to increase the share of wallet.

For instance, a supermarket chain might extend its share of wallet by offering a diverse range of ready-to-eat options, competing effectively against local restaurants.

Examples of share of wallet

Let’s explore real-world examples to better understand share of wallet:

Fast food chains

Consider the case of McDonald’s, which introduced a breakfast menu. As a result, some customers shifted their morning routines from Dunkin’ Donuts to McDonald’s. This change in behavior allowed McDonald’s to capture more of its existing customers’ fast-food spending and even attract new clients.

Banking industry

In the banking sector, executives often focus on cross-selling complementary products and services to existing clients. For instance, a wealth management client might be referred to an in-house mortgage representative when seeking a new home. This strategy doesn’t acquire new customers but significantly increases the bank’s share of wallet among its current client base.

In conclusion, share of wallet is a valuable metric that can lead to increased revenue, improved customer retention, enhanced satisfaction, and stronger brand loyalty. It’s a strategy worth considering for businesses looking to maximize their existing customer relationships and outperform competitors.


Here is a list of the benefits and drawbacks to consider.

  • Increased revenue from existing customers
  • Improved client retention rates
  • Enhanced customer satisfaction
  • Strengthened brand loyalty
  • Competition for the customer’s wallet share
  • May require significant marketing efforts
  • Challenging to shift customer spending habits
  • Dependent on the company’s ability to meet customer needs and preferences

Frequently asked questions

What are the benefits of increasing share of wallet?

Increasing Share of Wallet can lead to added revenue, improved client retention, enhanced customer satisfaction, and increased brand loyalty.

What strategies can be employed to grow share of wallet?

To grow Share of Wallet, companies often use targeted marketing strategies, such as improving product quality, pricing, and convenience, adapting innovative features, and identifying logical product extensions to meet customer preferences.

Can you provide an example of share of wallet in practice?

Certainly. An example is McDonald’s introducing a breakfast menu, which led some customers to shift their spending from Dunkin’ Donuts to McDonald’s, thereby capturing more of their existing customers’ fast-food spending.

How can share of wallet benefit the banking industry?

In the banking sector, increasing Share of Wallet involves cross-selling complementary products and services to existing clients, ultimately leading to higher revenue without acquiring new customers.

Key takeaways

  • Share of wallet (SOW) measures the portion of a customer’s spending dedicated to a specific brand, not its competitors.
  • Growing share of wallet involves maximizing revenue from existing customers by offering additional products and services.
  • Benefits of increasing share of wallet include added revenue, improved client retention, enhanced customer satisfaction, and increased brand loyalty.
  • Share of wallet is distinct from market share, which focuses on acquiring new customers and expanding market presence.
  • Targeted marketing strategies can be employed to grow share of wallet, outperform competitors, and identify customer preferences.
View article sources
  1. Wallet estimation models – CiteSeerX
  2. Share of Wallet in Loyalty Research – Georgia Southern University
  3. Cryptocurrency Explained: A Comprehensive Guide to Understanding and Investing in Digital Assets – SuperMoney
  4. Mystery of Cryptocurrency Airdrop: A Beginner’s Guide – SuperMoney