What is this customer actually worth to you?
Revenue tells you what a customer paid you. It says nothing about what they spent. The gap between the two is your share of wallet, and most account teams cannot state it within twenty points.
At the last annual review, someone presented a number with pride. Two point four million, up eight percent. Everyone nodded. Nobody asked the better question: what could the number have been?
Revenue tells you what a customer paid you. It says nothing about what they spent. The gap between those two figures is your share of wallet, and in most account teams nobody in the room can state it within twenty points. We measure what we won and stay carefully ignorant of what was available.
The exercise takes an afternoon (the calculator does the arithmetic, and the Prompt Guide has a share-of-wallet prompt that shortens the estimating). Estimate the customer’s total spend in your category, using their annual report, their volumes, their site count, whatever proxies the industry gives you. Take your revenue as a share of that. Then estimate the same share for the strongest competitor on the account. Now you have three numbers instead of one, and the conversation changes shape.
Because a key account where you hold fifteen percent of the wallet is not a mature account to be defended. It is a growth market in which you happen to have a warm relationship, reference customers and an existing contract. Everything your business development team spends its life trying to build from cold, you already have here, and the account plan says “retain”.
There is an uncomfortable version of the exercise too. Ask the customer. Not “how are we doing”, which invites politeness, but “what would we have to be true to earn the work we currently do not see?” Customers will usually tell you, because it costs them nothing and might improve their options.
Next quarter the revenue number will go up on the slide again. Let it be the second number on the page.
If this is your problem too, score your account with the Value Edge Diagnostic, or talk to us.
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