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What's Your Share of Wallet? - It's All Based On One-To-One Marketing

by tomdwyeriv

Most businesses have only three ways to increase revenues. They
can work hard to get more customers. They can sell more to
existing customers. Alternatively, they can sell existing
customers more frequently. Regardless, increasing sales to your
existing customers will increase your "share of wallet."

Because money spent for new client acquisition yields less and
less in the modern marketplace, "share of wallet" has become a
more relevant measure of success than "market share." Therefore,
keeping and growing customers over time becomes more important
than simply acquiring new customers. Indeed, selling existing
clients more products or services, and doing so more frequently
should be the number one goal of any company because doing so
yields higher returns.

No wonder today's successful companies focus on retaining
customers. If the primary goal is building long-term
relationships and increasing customer loyalty, the resulting
"share of wallet" will be higher margins and profitability. This
kind of relationship marketing is part of the evolution currently
underway from mass marketing to micromarketing. It's a revolution
in managing individual customer relationships and it is
accomplished one-to-one.

Most businesses have recognized that the velocity of business
has sped up. Meanwhile "customer-relations-as-usual" has not
proven to be agile, flexible, or fast enough to deliver the kind
of results needed to maintain profitability. Therefore managing
customer relationships "one-to-one," also referred to as "mass
customization," has emerged as the new marketing strategy
designed to hedge against eroding margins and customer
disloyalty.

This evolutionary change is as much about necessity as it is
opportunity. America today is a far more diverse and
self-indulgent society than it was in the heyday of the mass
market. Indeed, as you survey the marketplace you cannot help but
notice that various market segments are not only defined by their
demographics, but by nearly individualized product preferences.
The driver of demand is all about products that are "right for
me." So, forget the marketing hype. People want value. Value,
like beauty, is in the eye of the beholder.

In today's marketplace innovations are so quickly imitated by
competitors they rarely provide sustainable long-term advantage.
Clearly, the most sustainable advantage any business can have is
a strong market presence. In a time in which the informed
customer is king, the concept of "image is reality" is dead. The
revised formula for the smart marketer should be: "image +
information + customer expectations + customer experience =
reality."
 
If making and keeping promises builds trust, and it does, then
marketing tools need to reflect the reality of your businesses
trustworthiness. These tools are being found more and more in the
form of specialized publications that can be focused on the
unique needs of your customers. The most effective of these will
be replete with peer-proof testimonials and linked to Internet
and other customized information streams.

Many business people will tell you that it's much harder to
develop a relationship built on trust than it is to sell
something for the first time. Nevertheless, the resulting long
term "share of wallet" far out-paces traditional new business
focused marketing. Since customers are the lifeblood of any
organization it's hard to understand any business that doesn't
regard its customers as its number one priority and treat them
that way.

Tom Dwyer is a former senior executive at one of the largest
interactive marketing agencies and now spends his time consulting
with businesses and organizations on all aspects of business
life. Visit Tom at http://www.talkinwithtommyd.com

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