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The Wallet Allocation Rule

Author Alexander J. Buoye , Luke Williams , Lerzan Aksoy , Timothy L. Keiningham
Release Date: 2015/02/01
ISBN: 9781119037316
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Book Description

Customer Loyalty Isn't Enough—Grow Your Share of Wallet

The Wallet Allocation Rule is a revolutionary, definitive guide for winning the battle for share of customers' hearts, minds, and wallets. Backed by rock-solid science published in the Harvard Business Review and MIT Sloan Management Review, this landmark book introduces a new and rigorously tested approach—the Wallet Allocation Rule—that is proven to link to the most important measure of customer loyalty: share of wallet.

Companies currently spend billions of dollars each year measuring and managing metrics like customer satisfaction and Net Promoter Score (NPS) to improve customer loyalty. These metrics, however, have almost no correlation to share of wallet. As a result, the returns on investments designed to improve the customer experience are frequently near zero, even negative.

With The Wallet Allocation Rule, managers finally have the missing link to business growth within their grasp—the ability to link their existing metrics to the share of spending that customers allocate to their brands.

  • Learn why improving satisfaction (or NPS) does not improve share.
  • Apply the Wallet Allocation Rule to discover what really drives customer spending.
  • Uncover new metrics that really matter to achieve growth.

By applying the Wallet Allocation Rule, managers get real insight into the money they currently get from their customers, the money available to be earned by them, and what it takes to get it. The Wallet Allocation Rule provides managers with a blueprint for sustainable long-term growth.

Table of Contents

  1. Title Page
  2. Copyright
  3. Dedication
  4. Preface
    1. Notes
  5. Foreword
  6. Chapter 1: It's “Oh My God!” Bad
    1. Key Takeaway: Customer satisfaction is the most widely used metric for measuring and managing customer loyalty. But our research finds that satisfaction does not link to what counts most: market share
    2. Growth Is Hard to Find
    3. Deconstructing Market Share
    4. Different Metric, Same Outcome
    5. Satisfaction ≠ Market Share
    6. Satisfaction ≠ Share of Wallet
    7. Always Wrong on Average
    8. A Cautionary Tale
    9. The Moral of the Story?
    10. Notes
  7. Chapter 2: Eureka! The Discovery of the Wallet Allocation Rule
    1. Key Takeaway: Satisfied customers who recommend your brand are important. But all too often customers like your competitors just as much as they like your brand. The end result is that you are losing
    2. Getting There
    3. Determining Your Rank
    4. The Wallet Allocation Rule and Share: The Evidence
    5. The “Best” Metric?
    6. Why Does the Wallet Allocation Rule Work?
    7. Using the Wallet Allocation Rule
    8. Wallet Allocation Rule Strategy
    9. How to Improve Your Rank
    10. The Rule in Practice
    11. Conclusion
    12. Notes
  8. Chapter 3: The Wallet Allocation Rule in Action
    1. Key Takeaway: The drivers of share of wallet are almost always very different from the drivers of satisfaction or NPS. Wallet Allocation Rule analysis gets to the heart of what drives wallet share by
    2. Grinding a New Set of Lenses
    3. Putting the Wallet Allocation Rule to Work
    4. Conclusion
    5. Notes
  9. Chapter 4: Customers as Assets
    1. Key Takeaway: Growth is easy for firms willing to give their products away—for as long as they remain in business! But the first duty of a business is to survive. Managers must never lose si
    2. The Wallet Allocation Rule Is Not a Panacea
    3. Revenue ≠ Profits
    4. Short-Term Gain, Long-Term Pain
    5. Money-Losing Delighters
    6. Aligning Satisfaction, Share of Wallet, Revenue, and Profit
    7. Conclusion
    8. Notes
  10. Chapter 5: New Metrics That Matter for Growth
    1. Key Takeaway: The Wallet Allocation Rule makes it possible for managers to easily link customer satisfaction to share of wallet. But because the rule is based upon a company's relative rank, not i
    2. Glass Houses and Stones
    3. Must-Have Marketing Metrics
    4. Customer Satisfaction
    5. Key Drivers and Market Barriers
    6. Demand Evidence
    7. Notes
  11. Chapter 6: Making It Happen
    1. Key Takeaway: Rather than end this book with a cheerleader's call to “Go, Fight, Win!” we instead want to focus on this all too important fact: Without proper execution, good i
    2. Rule 1: Get the Data Right
    3. Rule 2: Set the Right Performance Standards
    4. The Next Disruption
    5. Notes
  12. Afterward: What's Next?
    1. Establish That You Need It
    2. Get Help
    3. Let's Talk
    4. Connect with Us
    5. Visit www.walletrule.com
    6. Notes
  13. Appendix A: Quick Start Guide
    1. What Is the Wallet Allocation Rule?
    2. Wallet Allocation Rule Strategy
    3. Identifying Opportunities for Improving Share of Wallet
    4. An Example in the Credit Union Industry
    5. Conclusion
    6. Notes
  14. Appendix B: Frequently Asked Questions
    1. When Is It Appropriate to Use the Wallet Allocation Rule?
    2. Does the Wallet Allocation Rule Work with All Satisfaction Metrics?
    3. Is There a Preferred Metric We Should Use to Determine a Brand's Rank?
    4. How Do I Ensure That All Relevant Competitors Are Ranked?
    5. What Metrics Should Be on My “Dashboard” Related to the Wallet Allocation Rule?
    6. Why Does the Wallet Allocation Rule Work?
    7. Will Relative Net Promoter Score Work?
    8. Isn't Share of Wallet Just a Function of a Brand's Reach (i.e., Penetration)?
    9. Visit www.walletrule.com
    10. Notes
  15. Acknowledgments
    1. Principal Contributors
    2. Notes
  16. About the Authors
    1. Timothy Keiningham, PhD
    2. Lerzan Aksoy, PhD
    3. Luke Williams
    4. Alexander Buoye, PhD
  17. Index
  18. End User License Agreement