Share of Wallet, SCR and SW

Dr Atul Singh Chauhan

 Customer Based Value Metrics
Customer
based
value
metrics

Popular Strategic Source:

Kumar &
Reinartz
(2012)

Size Share of Past

Share of Transition LTV Customer
Of Category RFM Customer
Wallet Matrix Metrics Equity
Wallet Reqt. Value

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 Popular Customer based value
𝐽
• Size of wallet = σ𝑗=1 𝑆𝑗
• Where Sj is sales (in terms of money) to the focal customer by the jth firm

• Share of category
𝐼
requirement (SCR)
σ𝑖=1 𝑆𝑖𝑗𝑜
• 𝑎𝑆𝐶𝑅 = × 100 %
σ𝐼𝑖=1 σ𝐽𝑗=1 𝑆𝑖𝑗
σ𝐼𝑖=1 𝑆𝑖𝑜 𝑗𝑜
• 𝑖𝑆𝐶𝑅 = σ𝐼𝑖=1 𝑆𝑖𝑜 𝑗
× 100 %
• Where S is the sales (Volume)
• i represents any customer of the focal firm .
• I is the total number of customers of the focal firm.
• io is focal customer of the focal firm.
• jo is the focal firm.
• J is the total number of firms in the market (the market in concern).
• σ𝐼𝑖=1 𝑆𝑖𝑜 𝑗𝑜 is the sum of all the sales to the io customer by jo firm
• σ𝐼𝑖=1 𝑆𝑖𝑗𝑜 is sum of all the sales to all i customers (the focal firm’s) by j0 firm
• σ𝐼𝑖=1 σ𝐽𝑗=1 𝑆𝑖𝑗 is sum of all the sales to all i customers by all the j firms in the focal firm’s market

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SCR
Brand_SAMA Brand_SOMO Brand_SUMU Total
Customer_1 2 8 0 10
Customer_2 6 0 3 9
Customer_3 0 4 1 5
Total 8 12 4 24

Brand SAMA has a MS of 33% (i.e., 8 purchases out of a total of 24) and an aSCR of 42.1% (i.e., 8 purchases
out of 19, made by its two buyers)
For Brand SAMA, customer 1 has iSCR of 20% (2 purchases from SAMA and 10 overall i.e. 2/10)

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 Popular Customer based value (contd..)
• Share of wallet (SW)
σ𝐼𝑖=1 𝑆𝑖𝑗𝑜
• 𝑎𝑆𝑊 = × 100 %
σ𝐼𝑖=1 σ𝐽𝑗=1 𝑆𝑖𝑗
σ𝐼𝑖=1 𝑆𝑖𝑜 𝑗𝑜
• 𝑖𝑆𝑊 = σ𝐼𝑖=1 𝑆𝑖𝑜 𝑗
× 100 %
• Where S is the sales (Monetary)
• i represents any customer of the focal firm .
• I is the total number of customers of the focal firm.
• io is focal customer of the focal firm.
• jo is the focal firm.
• J is the total number of firms in the market (the market in concern).
• σ𝐼𝑖=1 𝑆𝑖𝑜 𝑗𝑜 is the sum of all the sales to the io customer by jo firm
• σ𝐼𝑖=1 𝑆𝑖𝑗𝑜 is sum of all the sales to all i customers (the focal firm’s) by j0 firm
• σ𝐼𝑖=1 σ𝐽𝑗=1 𝑆𝑖𝑗 is sum of all the sales to all i customers by all the j firms in the focal firm’s market

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Popular Customer based value (contd..)
σ𝐼𝑖=1 𝑖𝑆𝑊 σ𝐼𝑖=1 𝑆𝑖𝑗𝑜
• aSW = × 100 % = × 100 %
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 σ𝐽𝑗=1 σ𝐼𝑖=1 𝑆𝑖𝑗
• Size of Wallet & Share of Wallet - Share of wallet and size of wallet
simultaneously – with same share of wallet, different attractiveness as
customers

• SCR – for categories where the variance of customer expenditures is

relatively small
• SW – if the variance of consumer expenditures is relatively high

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THANK YOU