Problem: Customers Don’t Buy More From Your Company
So, you have a business. (Good Job!)
You have customers. (Congratulations!)
You are making profits ( Three cheers for that!)
…but you’re not making enough profits. (Oh man!)
…because your customers are not buying enough from you. (My oh my oh my!)
What to do?
Let’s figure out together how you can solve this problem of “customers not spending enough money on your products.”
Solution: How To Make Customers Spend More?
When I talk about making customers spend more money, I don’t mean luring them into buying products that don’t provide any value or benefit to them.
I am talking about all those products and services which actually exist to solve their problems and to make their lives easier.
Generally, there are three ways of making a customer spend more on your products. These are-
- Build Customer Loyalty
- Build Customer Equity
- Increase Your Share Of Customers Or Share Of Wallet
You can read more about increasing customer loyalty in my last blog. In this article, we are mainly going to explore the third area of increasing the share of wallet.
Share of wallet means how much customers spend on your product rather than on other similar competitive products. It is the percentage of their spending that your product has captured in its category.
Just like market share which tells you how much market you own in a specific industry, the share of customers lets you know how many customers from that specific industry you have, and share of wallet shows how much those customers are spending on your products.
If you are a travel and tourism company, you are trying to increase your share of travel.
If you are a food and beverage company, or you are a restaurant owner, you are trying to increase the share of stomach.
In the end, everything comes to increasing the share of wallet for your product.
To exemplify, let’s imagine you are a restaurant owner in Manhattan, New York City. You have a customer named Amanda who eats at your restaurant once every month and spends $40 on an average.
Amanda, in general, eats out 5 nights a week, spending $200 every week or $800 in a month. Your share of her wallet is $40/$800 which is 5%.
Now, if you can make Amanda come more to your restaurant rather than going to other places, you will be able to increase your share of her wallet and improve the value you are getting from her.
The question now comes to how to make Amanda spend more than $40 at your restaurant and how to make her eat out at your restaurant more than one time a month.
In other words, it implies how to make your customers buy from you and not from your competitors
Start by pondering over these four questions –
- Are you your customers’ favorite product or service provider in your industry?
- If not, who is it?
- How many more similar products or service providers form a part of your customers’ list?
- If you’re not your customers’ first choice, where do you find yourself on their list?
Let’s say, you are the owner of an Italian restaurant in Williamsburg, Brooklyn. Now, start your research on who your customers and competitors are.
If your customers want to eat Italian cuisine and they don’t come to your restaurant, then which other Italian restaurants are they going to consider?
Here are what all you can do to increase your share of wallet –
Customer & Market Research
This is the most important step if you want to convince your customers to buy more from you.
If you don’t know your customers, you won’t understand their needs and if you don’t understand their needs, you won’t be able to satisfy those needs better than others in the market.
So, start by knowing more about your customers and their choices, and your competitors and their strengths and weaknesses.
Increase Customer Satisfaction
Customer satisfaction can improve so many of your metrics and it can also convince customers to buy more from you.
But you should never stop at customer satisfaction. Your ultimate goal should be to achieve customer delight.
For increasing your customers’ satisfaction and reaching the stage of customer delight, you have to make sure that your customers are seeing the high perceived value in your brand, that their expectations from your products are exceeding all the time and their experience with your brand is nothing short of being delighted.
Reward Customer Loyalty
To make your customers choose you over your competitors, you have to increase customer loyalty. Customer loyalty rewards are one of the many ways of doing that.
There are various ways of rewarding your loyal customers and convince customers to buy more from you.
You can offer them discounts based on points collection or level achievement, give them free gifts, reward them with exclusive access to various things, or make them a part of your community.
Build A Brand Image
Building a strong brand image is an important part of increasing your customer base or their share of wallet.
Even if you are on the number one position, your branding work doesn’t end here. Now, you have to make sure that you retain this image to convince your customers to buy more from you.
Nokia held the number one position at one point in time, not anymore. Branding requires continuous work as it’s a race to the top. If you stop after becoming the market leader, your competitors won’t stop.
They will keep working on their brand till they snatch that position of market leader away from you.
Bizadmark can help you with this. We have experience in creating, changing, and managing brand images.
To learn more about how we can help you with branding and increasing your share of wallet, get in touch with us.
Target More Customer Of High Value
Sometimes, it’s more profitable to concentrate most of your business efforts on a few customers of high value rather than many others who don’t purchase enough from you.
For example, Amazon has 112 million Amazon Prime members and they are 6 times more profitable to Amazon than non-Prime members.
Amazon focuses more on Prime members because they bring more value to the Amazon brand.
Upselling & Cross-selling
Upselling and cross-selling have been seen as highly effective techniques for increasing the share of wallet.
Upselling means selling higher valued products than what your customer was actually planning to buy and cross-selling means selling related and complementary products in addition to the product your customer actually planned to buy.
For example, Amazon’s recommended products influence 30% of the sales happening on its website. It’s an example of very effective upselling and cross-selling.
Even though choices your customers have are endless but their wallet is limited.
You can’t reduce the choices or increase their wallet size, but you can increase at least your share of their wallet.
The process starts with knowing your customers better and ends when you are able to make a community of delighting customers.
What are your thoughts on it? Let us know in the comments.