The Wallet Allocation Rule

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.

TIMOTHY KEININGHAM is Global Chief Strategy Officer at Ipsos Loyalty, a professional services firm dedicated exclusively to customer experience, satisfaction, and loyalty.

LERZAN AKSOY is Professor of Marketing at Fordham University Schools of Business.

LUKE WILLIAMS is Vice President at Ipsos Loyalty, where he leads the day-to-day activity of large-scale research engagements.

ALEXANDER BUOYE is Assistant Professor of Marketing at Fordham University Schools of Business.

Customer satisfaction, Net Promoter Score (NPS), likelihood to recommend--today's businesses pour millions into metrics for tracking and analyzing these so-called leading indicators of business growth. But what if increases in these customer loyalty metrics do not translate into growth? An outside-the-box question, and precisely the one that the authors of The Wallet Allocation Rule sought to answer in their landmark research, originally published in the Harvard Business Review and the MIT Sloan Management Review . The results have already made waves in the business community. It turns out that not only is investing in customer satisfaction and NPS not enough, such investments frequently lead to negligible or even negative returns. Satisfaction is useless if it fails to translate into better business performance. The Wallet Allocation Rule lays out the first systematic approach for linking to what really matters--share of wallet (i.e., the percentage of spending in a category that customers allocate to particular brands). This is a crucial step for translating popular metrics like satisfaction and NPS into increased profitability and market share. Best of all, the Wallet Allocation Rule is extremely simple to use. Executives and managers can accurately calculate how much of their customers' money is going into competitors' pockets. Using the Quick Start Guide and other resources in this book, readers can start to invest in customer experience management initiatives that will shift customer spending habits in the right direction. The Wallet Allocation Rule is based on rock-solid science. It has been rigorously tested across cultures and industries. It works! Moreover, the science is clear with regard to satisfaction and NPS--there is no managerially relevant correlation between customer satisfaction or NPS and share of wallet. Now, thanks to The Wallet Allocation Rule , businesses can concentrate on strategies that are proven to yield results.

Praise for THE WALLET ALLOCATION RULE "This is it! Finally, something definitive about what it takes to win the battle for share of customers' hearts, minds, and wallets. Backed by rock-solid science, The Wallet Allocation Rule is a definite must-read." Peter Jueptner, Executive Vice President of Strategy and New Business Development, Este

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