Blog · Wallet share and penetration
Why there is no universal good share of wallet, the three things that set the right target for a customer, the share the company holds with customers like it, the category's natural concentration, and the customer's own trend, how to compute each from the ledger, and the two-line rule that says when a share is good enough to stop chasing and when it is not.
Someone asks what a good share of wallet is and expects a number. Forty percent is a triumph for a broker in a market where every client uses five and a warning for a distributor whose customers usually buy everything from one. This guide sets out the three measurable things that turn a share into a judgement, and the rule for when it is good enough.
| Comparison | Question | Source |
|---|---|---|
| The norm | What share do we hold with customers like this one where we are the main supplier? | The company's own base, per segment |
| Natural concentration | How much of a customer's wallet does the largest supplier usually hold in this category? | The same base, where wallets are known |
| The trend | Is this customer's share with us rising, flat or falling? | The customer's own history |
The norm. Per segment, among customers where the company is the main supplier: the median share. It is what the company achieves when it is winning, and it is a target colleagues already hit.
Natural concentration. Per category, among customers where the wallet is known: the share of the wallet held by the largest supplier, whoever it is. The median of that is the ceiling a share can reasonably reach.
The trend. The customer's share this period against the trailing four, from the ledger and the wallet estimate.
A share is good enough to stop chasing when:
share ≥ norm, and share ≥ a stated fraction of natural concentration, and trend ≥ flat
Otherwise it is on a list, and the comparison it fails says which list.
| Customer | Share | Norm | Natural ceiling | Trend | Failing | Reading |
|---|---|---|---|---|---|---|
| 2207 | 45% | 40% | 50% | +3 pts | none | Good; protect |
| 4471 | 45% | 62% | 90% | flat | Norm, ceiling | Room: $430,000 at norm |
| 9034 | 71% | 62% | 90% | −9 pts | Trend | Falling: a retention call |
| 1187 | 38% | 40% | 42% | flat | Norm, barely | At the ceiling; done |
Three customers at similar shares, three different readings. Customer 2207 in a fragmented category is doing well. Customer 4471 in a single-source category at the same share is the growth account. Customer 9034 is above norm and losing ground, and the trend outranks the level.
Per rep and per segment: customers meeting all three, customers failing each, and the value at norm among those failing the first. That last figure is the wallet-share opportunity in the book, and it is made of named accounts.
One target for every category. The fragmented-category rep is punished for physics.
Benchmark from outside. Describes someone else's customers.
Level without trend. The customer above norm and leaving.
Ceiling ignored. A rep chasing the last ten points in a category that never gives them.
Mapped once, the ledger, the customer master and the wallet estimates produce the norms, the ceilings, the trends and the three-way test per customer every month. Covirage builds this from the exports as they are. The share of wallet calculation guide covers the share itself, and the norm guide covers the first comparison in depth.
Published figures exist for some categories and they describe an average company in an average relationship. The useful benchmark is the company's own: the share it demonstrably achieves with customers it serves well. That is a target the sales team believes because colleagues are already hitting it.
How many suppliers customers in the category typically use. Among the company's own customers where the wallet is known, the share held by the largest supplier, whoever it is, shows it. In a category where the largest supplier typically holds 90 percent, a 60 percent share has room; in one where the largest holds 40, it may be the ceiling.
When the share is at or above the norm for similar customers, at or near the category's natural ceiling, and stable or rising. All three. A share that meets two and is falling is not done; the fall is the finding.