The Wallet Allocation Rule

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 The Wallet Allocation Rule sought to answer in their landmark research, originally published in the Harvard Business Review and the MIT Sloan Management Review. 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. Satisfaction is useless if it fails to translate into better business performance. The Wallet Allocation Rule 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. The Wallet Allocation Rule 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 The Wallet Allocation Rule, businesses can concentrate on strategies that are proven to yield results.