Share of Wallet (SOW)

What is Share of Wallet?

Share of wallet (SOW) is the portion of a customer’s total spending within a product category that goes to a particular brand. It measures how much of a customer’s budget for a category—food, banking, personal care, etc.—is captured by one company compared with competitors.

A simple way to think about it:
SOW = Customer spending with your brand in a category / Customer’s total spending in that category

Why SOW matters

Increasing SOW is often more cost‑efficient than acquiring new customers. Benefits include:
* Higher revenue per customer without proportional acquisition costs
* Improved customer retention and loyalty
* Stronger platform for launching new products or services
* Better lifetime value through cross‑selling and upselling

SOW vs. Market Share

Although related, these are different concepts:
* Market share = a company’s percentage of total sales in a market or region (focuses on winning new customers).
* Share of wallet = the share of each existing customer’s spending that goes to your brand (focuses on selling more to current customers).

Both drive growth, but SOW strategies typically aim at deepening relationships and increasing revenue from an existing customer base rather than expanding the total number of customers.

How to measure SOW

Measurement approaches vary by industry and data availability:
* Direct customer data: Calculate each customer’s spending with your brand divided by their total category spend (requires permissioned or tracked spending data).
* Surveys: Ask customers how much they spend across brands in a category and estimate SOW from responses.
* Panel/third‑party data: Use aggregated consumer panels or transaction data providers to estimate category spend and brand share.

Track SOW at individual, segment, and portfolio levels to prioritize interventions.

Strategies to grow share of wallet

• Segment customers by current SOW and lifetime value to target the highest-potential groups.
• Cross‑sell complementary products and services tailored to customer needs.
• Upsell higher‑margin or premium offerings to customers already engaged with your brand.
• Introduce logical product extensions that replace competitor spend (e.g., ready‑to‑eat meals competing with takeout).
• Adopt competitor strengths where appropriate (price, convenience, selection).
• Offer loyalty programs, bundled offers, or early access to new products to increase customer preference.
• Use personalization and targeted marketing to surface relevant offers at the right time.

Examples

• McDonald’s adding a breakfast menu captured more morning spending from customers who previously went to competitors for breakfast.
• A supermarket expanding its ready‑to‑eat section competes directly with local takeout restaurants for the customer’s food‑at‑home wallet.
• A bank increasing cross‑selling (mortgages, auto loans, wealth management) raises the portion of a customer’s financial services spend held by the bank.

Key takeaways

• Share of wallet focuses on increasing how much each existing customer spends with your brand within a category.
• Growing SOW can be more efficient than acquiring new customers and supports retention, loyalty, and higher lifetime value.
• Measure SOW using direct transaction data, surveys, or third‑party panels, and use segmentation, cross‑sell/upsell, product extensions, and targeted campaigns to grow it.