Chances are that if your B2B Incentive and rewards program doesn’t have a strategic design with share of wallet at the forefront, then your competitor’s program does.
But it’s not too late to adapt the design to the changing market. In simple terms, share of wallet determines how much a B2B customer can spend on required business goods and services. They have the choice of where and how much they spend with you or your competitors.
The question is, how much of the wallet share is spent with you?
One of the easiest ways to think about this is in the trade market, such as plumbing. Each plumber has a choice of which plumbing specialists to purchase their goods from. If your plumber has allocated a portion of their budget to spend with you, then the remainder is being spent at a competitor.
That remaining amount is your opportunity value with that customer. You don’t have to go looking for it, you have to find the reason to make them want to make a shift.
There are various design elements that can be used to influence share of wallet in a B2B program. You are trying to not just reward a single transaction, but recognise customer loyalty and shift the value beyond a single purchase to one of benefits for both individual and business.
The benefit of share of wallet in a reward program is that incremental growth through shifting of spend is more cost-effective than trying to acquire new customers and market share. If each customer shifts 5-10% of their spend, across an entire customer database this can easily make up new customer sales with less marketing and sales expenses. The focus is really on customer relationships, offers and reasons to spend more with you.
With the uncertainty of markets, one of the areas you want to be certain of is that you aren’t on the discretionary side of share of wallet. That will only lead to a price and margin fight. If you haven’t considered share of wallet as a pillar of your incentive program, it’s time to take a closer look.