Share of wallet is a window into the inner workings of your business, but it can be difficult to measure. It shows what percentage of a customer’s budget they spend with you versus your competitors. High share of wallet is an indicator of customer loyalty. It also gives a sense of the total addressable spend and the areas where your business has the potential to grow relative to competitors. Growing wallet share is usually an easier and cheaper growth lever than acquiring new customers. However, convincing customers to only shop with you can be challenging.
Most B2B customers buy from several suppliers. For example, they may purchase primary equipment from one distributor, replacement parts from another and kitting solutions from a third.
Sporadic buying behaviors often occur when a customer isn’t familiar with your entire catalog or wants to shop through a channel you don’t offer, such as eCommerce. Buyers also use multiple suppliers because of price, relationship or because they are required to in several regulated industries. Whatever the case, the bottom line is that even if you are a customer’s top choice, you will lose valuable sales if you aren’t their only choice.
Here are three ways to increase your share of wallet with AI:
Protect Your Current Share
What are your customers buying? Do they reorder the same things regularly, or are they more sporadic? When they purchase an item from you, do they usually buy the related items and replacement parts, too? AI can help you understand your customers better, so you protect your current share, fill service gaps and position yourself as their go-to distributor.
Sales reps tend to focus on the big fish – accounts that frequently interact with your business and provide the bulk of your sales. Although large customers need high levels of support, focusing on them too much can lead reps to neglect smaller accounts.
It’s easy to lose shares with small customers. While the sales team focuses on larger accounts, nobody realizes there’s slippage on smaller accounts. Churn is costly. One customer we work with used to lose 18% of their yearly sales volume to churn.
While it might not feel like “growth,” stopping slippage, leaks and churn is a massive growth lever. Use AI re-order and churn models to flag gaps and ensure you don’t lose ground on any customers.
Never Miss Out on a Sale
Especially with supply chain shortages, your business needs to provide customers and sales reps with suitable substitutes for out-of-stock products.
When customers try to order and find out the product they need is out of stock, they will likely go to a competitor to buy it, giving your competitors a chance to steal wallet share.
It’s impossible for any sales rep, no matter how experienced, to have a full grasp of every product in your entire catalog. But AI can identify in-stock substitutes in milliseconds at scale, so you never miss those sales.
Systematically Acquire New Categories
Customers don’t know everything you sell, and they buy products from your competitors they could buy from you. Most B2B buyers prefer the simplicity of buying from one distributor when possible. While there is an opportunity to acquire new categories, demanding sales reps grow accounts without direction about what categories or products to suggest to each customer is rarely effective.
Use AI for a more strategic approach to determine which categories and products someone should buy from you but aren’t. Leverage AI and all your data, including transaction, online browsing activity, product details and more, to give your sales reps a road map for what categories and products – out of your hundreds of thousands of SKUs – to pitch to customers for the highest probability customers will be receptive to switching.
Distributors can use AI to increase wallet share by protecting their current customers from slippage and churn, never missing out on a sale despite stockouts and strategically acquiring new categories.
Benj Cohen is the founder and CEO of Proton.ai.