Customers as Assets

Although the Wallet Allocation Rule makes it possible to strongly link satisfaction (and other commonly used customer loyalty metrics) to share of wallet, greater share of wallet is not a panacea. If managers want to make a positive return on their investments to enhance the customer experience, they first need a clear understanding of where the money really comes from. This chapter describes two of the myths of loyalty: loyal customers cost less to serve, and loyal customers are less price sensitive. The problem for managers has always been identifying what it takes to grow share of wallet, particularly given that the relationship between share of wallet and metrics such as satisfaction and net promoter score (NPS) has been extraordinarily weak. The wallet allocation rule solves this problem. Short‐termism and money‐losing delighters have the potential to derail any positive impact resulting from strategies designed to improve the customer experience.