In Business as in Sports There is Nothing Like Being Number 1

$6.7 billion spent on market research each year.

Companies spend billions on surveys and a great deal of time gathering information on customer satisfaction and looking to increase customer loyalty. Underlying this is that happy, satisfied customers will choose to buy their brand over their competitors.

The study on how to increase share of wallet “Customer Loyalty Isn’t Enough. Grow Your Share of Wallet,” by Timothy L. Keiningham, Lerzan Aksoy, Alexander Buoye, and Bruce Cooil was published in the October 2011 issue of the Harvard Business Review.

Your share of wallet is...

It is the percentage of dollars spent in your market and how it is divided up between you and your competitors. For example, if you are an insurance agent, agency or company then it is the percentage of the customer’s money spent on insurance that is coming to your business. The real goal is to have a larger percentage of the money spent coming to your business, an increased share of wallet.

Increasing your share of wallet.

"If traditional loyalty metrics don’t link to share of wallet, what does? To find out, we undertook a two-year longitudinal study of more than 17,000 consumers, looking at purchasing in more than a dozen industries and in nine countries. We asked a broad array of questions and collected ongoing purchase histories and satisfaction and loyalty ratings. Our analysis—to our knowledge the largest and most rigorous of its kind—revealed an elegant correlation: The rank that consumers assign to a brand relative to the other brands they use predicts share of wallet according to a simple, previously unknown formula, which we’ve named the Wallet Allocation Rule."

“The rank that consumers assign to a brand relative to the other brands they use predicts the share of wallet”

Applying this to a personal professional brand, entrepreneur’s brand and small business brand is an essential part of business strategy, planning and budgeting. As the saying goes “Where do I get the most bang for my buck” As professionals and small businesses typically don’t have the huge budgets that big companies have it makes it tough to compete with them head on with advertising. What they can do is convert more shoppers to buyers.

There is more to gain by choosing a playing field where you can win. There is much to gain by being perceived as number 1, The Authority in your field and your market versus number 2, 3,4,5,6 or 238 in some field where you can’t win. You can then build on your wins just like in sports as players and teams move up by winning.

If growth is what you are after..

“If growth is what you’re after, stop watching your scores and start paying attention to your rank. The path to winning has always been the same. It’s not just how many points you score that matters—you need to score more than your competitors do.”

Strategy for boosting your brand’s rank…

"Boosting your brand’s rank means minimizing the reasons your customers turn to your competitors."

• Identify the primary reasons your customers use your competitors.

• Prioritize your opportunities to improve your share of wallet: Estimate the costs of addressing each reason your customers choose a competitor and weigh those costs against your potential financial return in each case. Remember to take into account the cumulative impact of addressing issues that apply to multiple competitors."

Increasing your rank by increasing your perceived authority.

Increased perceived authority raises rank for professionals, entrepreneurs and small businesses. The strategy addresses the reasons customers are choosing competitors. For example, if the reasons customers are choosing competitors is they feel they offer better solutions then you do then that is exactly what needs to be addressed. You need to become identified as The Authority in providing solutions in your field and market. This requires actually being an authority in your field. Many professionals are authorities but not perceived as authorities by consumers. It is consumers, clients and customers that need to see you as the authority in your field to increase your rank.

There is nothing like being Number 1.

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John K Arnold is a 35+ year business owner insurance professional working both domestically and internationally and strategic planner positioning clients by creating authority strategies and marketing campaigns.