Details

The Wallet Allocation Rule


The Wallet Allocation Rule

Winning the Battle for Share
1. Aufl.

von: Timothy L. Keiningham, Lerzan Aksoy, Luke Williams, Alexander J. Buoye

12,99 €

Verlag: Wiley
Format: PDF
Veröffentl.: 12.02.2015
ISBN/EAN: 9781119037309
Sprache: englisch
Anzahl Seiten: 240

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Beschreibungen

<b>Customer Loyalty Isn't Enough—Grow Your Share of Wallet</b> <p><i>The Wallet Allocation Rule</i> 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 <i>Harvard Business Review</i> and <i>MIT Sloan Management Review</i>, 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.</p> <p>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.</p> <p>With <i>The Wallet Allocation Rule</i>, 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.</p> <ul> <li>Learn why improving satisfaction (or NPS) does not improve share.</li> <li>Apply the Wallet Allocation Rule to discover what really drives customer spending.</li> <li>Uncover new metrics that really matter to achieve growth.</li> </ul> <p>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. <i>The Wallet Allocation Rule</i> provides managers with a blueprint for sustainable long-term growth.</p>
<p>Preface xvii</p> <p>Foreword xix</p> <p><b>Chapter 1</b></p> <p><b>It’s “Oh My God!” Bad 1</b></p> <p>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 and share of wallet. Satisfaction is a strong negative predictor of market share. And satisfaction typically explains a miniscule 1 percent of customers’ share of spending in an industry category. This problem isn’t just limited to customer satisfaction. All commonly used measures of customer loyalty—such as the Net Promoter Score (NPS) or recommend intention perform equally badly. This contradicts the message of virtually all programs discussed in the business press regarding the relationship of satisfaction and NPS to business performance. The grim reality is that most of these efforts are doomed to fail. Moreover, they often run counter to a firm’s competitive positioning and strategy.</p> <p>Growth Is Hard to Find 3</p> <p>Deconstructing Market Share 4</p> <p>Different Metric, Same Outcome 8</p> <p>Satisfaction ≠ Market Share 11</p> <p>Satisfaction ≠ Share of Wallet 15</p> <p>Always Wrong on Average 18</p> <p>A Cautionary Tale 22</p> <p>The Moral of the Story? 25</p> <p><b>Chapter 2</b></p> <p><b>Eureka! The Discovery of the Wallet Allocation Rule 27</b></p> <p>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 sales. To understand what drives share of wallet and ultimately market share, managers need to shift their focus from the drivers of satisfaction or NPS to the drivers of rank. Our research conclusively proves that the rank that customers assign to a brand relative to other brands they use predicts share of wallet using a simple, previously unknown formula, which we’ve named the Wallet Allocation Rule.</p> <p>Getting There 29</p> <p>Determining Your Rank 32</p> <p>The Wallet Allocation Rule and Share: The Evidence 33</p> <p>The “Best” Metric? 38</p> <p>Why Does the Wallet Allocation Rule Work? 40</p> <p>Using the Wallet Allocation Rule 41</p> <p>Wallet Allocation Rule Strategy 43</p> <p>How to Improve Your Rank 46</p> <p>The Rule in Practice 47</p> <p>Conclusion 49</p> <p><b>Chapter 3</b></p> <p><b>The Wallet Allocation Rule in Action 51</b></p> <p>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 identifying what drives customers’ preference for your brand vis-à-vis competition instead of simply determining what makes customers happy.</p> <p>Grinding a New Set of Lenses 52</p> <p>Putting the Wallet Allocation Rule to Work 53</p> <p>Conclusion 88</p> <p><b>Chapter 4</b></p> <p><b>Customers as Assets 89</b></p> <p>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 sight of the fact that the end goal is profits, not just revenues.</p> <p>The Wallet Allocation Rule Is Not a Panacea 91</p> <p>Revenue ≠ Profits 98</p> <p>Short-Term Gain, Long-Term Pain 99</p> <p>Money-Losing Delighters 102</p> <p>Aligning Satisfaction, Share of Wallet, Revenue, and Profit 104</p> <p>Conclusion 106</p> <p><b>Chapter 5</b></p> <p><b>New Metrics That Matter for Growth 109</b></p> <p>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 its absolute satisfaction level, firms need to add new metrics to their list of Key Performance Indicators (KPIs).</p> <p>Glass Houses and Stones 110</p> <p>Must-Have Marketing Metrics 112</p> <p>Customer Satisfaction 115</p> <p>Key Drivers and Market Barriers 121</p> <p>Demand Evidence 127</p> <p><b>Chapter 6</b></p> <p><b>Making It Happen 129</b></p> <p>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 ideas can and often do fail. The Wallet Allocation Rule is no exception. We end by identifying the most common failure points, and what you can do to avoid them.</p> <p>Rule 1: Get the Data Right 131</p> <p>Rule 2: Set the Right Performance Standards 135</p> <p>The Next Disruption 136</p> <p>Afterword</p> <p>What’s Next? 139</p> <p>Establish That You Need It 139</p> <p>Get Help 139</p> <p>Let’s Talk 140</p> <p>Connect with Us 140</p> <p>Visit <a href="http://www.walletrule.com/">www.walletrule.com</a> 140</p> <p><b>Appendix A</b></p> <p>Quick Start Guide 141</p> <p>What Is the Wallet Allocation Rule? 141</p> <p>Wallet Allocation Rule Strategy 143</p> <p>Identifying Opportunities for Improving Share of Wallet 146</p> <p>An Example in the Credit Union Industry 147</p> <p>Conclusion 149</p> <p><b>Appendix B</b></p> <p>Frequently Asked Questions 151</p> <p>When Is It Appropriate to Use the Wallet Allocation Rule? 151</p> <p>Does the Wallet Allocation Rule Work with All Satisfaction Metrics? 152</p> <p>Is There a Preferred Metric We Should Use to Determine a Brand’s Rank? 153</p> <p>How Do I Ensure That All Relevant Competitors Are Ranked? 154</p> <p>What Metrics Should Be on My “Dashboard” Related to the Wallet Allocation Rule? 154</p> <p>Why Does the Wallet Allocation Rule Work? 155</p> <p>Will Relative Net Promoter Score Work? 155</p> <p>Isn’t Share of Wallet Just a Function of a Brand’s Reach (i.e., Penetration)? 156</p> <p>Visit <a href="http://www.walletrule.com/">www.walletrule.com</a> 157</p> <p>Acknowledgments 159</p> <p>Principal Contributors 159</p> <p>About the Authors 187</p> <p>Timothy Keiningham, PhD 187</p> <p>Lerzan Aksoy, PhD 188</p> <p>Luke Williams 189</p> <p>Alexander Buoye, PhD 189</p> <p>Notes 191</p> <p>Index 211</p>
<p><b>TIMOTHY KEININGHAM</b> is Global Chief Strategy Officer at Ipsos Loyalty, a professional services firm dedicated exclusively to customer experience, satisfaction, and loyalty.</p> <p><b>LERZAN AKSOY</b> is Professor of Marketing at Fordham University Schools of Business. <p><b>LUKE WILLIAMS</b> is Vice President at Ipsos Loyalty, where he leads the day-to-day activity of large-scale research engagements. <p><b>ALEXANDER BUOYE</b> is Assistant Professor of Marketing at Fordham University Schools of Business.
<p>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 <i>The Wallet Allocation Rule</i> sought to answer in their landmark research, originally published in the <i>Harvard Business Review</i> and the <i>MIT Sloan Management Review</i>. 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.</p> <p> Satisfaction is useless if it fails to translate into better business performance. <i>The Wallet Allocation Rule</i> 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. <p><i>The Wallet Allocation Rule</i> 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 <i>The Wallet Allocation Rule</i>, businesses can concentrate on strategies that are proven to yield results.

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