Understanding the Wallet Allocation Rule for Wallet Share to Drive Business

Ipsos Loyalty Research Experts Help Develop and Launch the New ‘Wallet Allocation Rule’

Thursday, October 20, 2011

New York, NY – It is a tough battle for businesses to understand the value of customer loyalty and how to win their share of wallet. That’s why Ipsos Loyalty is declaring the Wallet Allocation Rule to be the next big breakthrough in understanding consumer thinking. Ipsos Loyalty’s Timothy Keiningham, Global Chief Strategy Officer & Executive Vice President, and Alex Buoye, Vice President of Analytics, working with a team of academics, have developed the Wallet Allocation Rule, a new research tool designed to help businesses better map out their share of consumer spending.

“A key component of the Wallet Allocation Rule is that customer loyalty doesn’t always pay as it should. Businesses used to think, ‘The customer is always right.’ But what is truer is that it is the customer’s wallet that’s always right,” says Keiningham of the thinking behind the new Wallet Allocation Rule model. “Backed by our extensive research utilizing thousands of samples and numerous real-world situations, our Wallet Allocation Rule model shows that what matters most is how well a company ranks in comparison to its rivals.”

The Wallet Allocation Rule model was developed by way of a tremendous R&D effort between Ipsos Loyalty and leading academics, validated across more than a dozen different business sectors and product categories. The Wallet Allocation Rule was developed over a two-year period studying the purchasing habits among 17,000 consumers in more than a dozen industries. In essence, the Wallet Allocation Rule uses customer rankings of brands to predict the percentage—or share—of spending a company will capture in its segment.

By using the Wallet Allocation Rule, businesses will be able to link their customer survey data with the share of wallet that their customers allocate to their firm and to their competitors. As a result, managers will be able to clearly identify what it takes to drive share, the most important metric in driving growth. With the Wallet Allocation Rule, investments can be prioritized based upon the real impact that they will have on changes in customers spending with a product, service or brand, thereby insuring maximum return.

An in-depth article on the Wallet Allocation Rule appears in the October 2011 issue of the prestigious Harvard Business Review. The article was coauthored by Keiningham and Buoye together with Lerzan Aksoy, Professor of Marketing at Fordham University, and Bruce Cooil, Professor of Management at Vanderbilt University, the academic team involved in the development of the Wallet Allocation Rule.

“Customers may be very satisfied with your brand and happily recommend it to others—but if they like your competitors just as much (or more), you’re losing sales,” Keiningham and his coauthors write. “Making changes to increase satisfaction won’t necessarily help.”

Ipsos Loyalty offers an online recorded information session explaining the uses and value of the Wallet Allocation Rule. In the session, Keiningham and Luke Williams, Vice President with Ipsos Loyalty, demonstrate how to use the Wallet Allocation Rule model to radically improve a firm's competitive position in the marketplace. Journalists and members of the media wishing to learn more about the Wallet Allocation Rule may do so by accessing the recording on following web page: http://ipsos-na.com/knowledge-ideas/loyalty/webinars/?q=grow-your-share-with-the-wallet-allocation-rule.

For more information on this news release, please contact:

Elen Alexov
Director, Marketing Services
Ipsos North America
(778) 373-5136

About Ipsos Loyalty

Ipsos Loyalty is a global, specialized practice dedicated to helping companies improve business performance through customer satisfaction management, customer relationship management, and employee climate management. Ipsos Loyalty provides a state-of-the-art approach to customer-driven business performance through a modular suite of innovative research tools that provides an integrated framework to identify complex global business solutions. Ipsos Loyalty is an Ipsos company, a leading global survey-based market research group.

To learn more, please visit, www.ipsosloyalty.com.

About Ipsos

Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world.

Member companies assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media. They measure public opinion around the globe. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2010, Ipsos generated global revenues of €1.140 billion ($1.6 billion U.S.).

Visit www.ipsos-na.com to learn more about Ipsos offerings and capabilities.

Ipsos, listed on the Eurolist of Euronext – Comp B, is part of SBF 120 and the Mid-100 Index, adheres to the Next Prime segment and is eligible to the Deferred Settlement System. Isin FR0000073298, Reuters ISOS.PA, Bloomberg IPS:FP

Understanding the Wallet Allocation Rule for Wallet Share to Drive Business

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Elen Alexov
Director, Marketing Services,
North America