How do you increase your customer margins? First, consider customer share of wallet. Are you getting all the pizza business from certain customers? Can you entice them to spend more per order? Can you convince them to come to you for other meals? McDonald’s taught us all a lesson when it introduced its breakfast menu.
Disney has been highlighted in several books for its success in increasing wallet share. Disney realized that although it was getting lots of people to the parks, it was only getting a fraction of the dollars spent. The answer? Open Disney hotels and restaurants. Genius.
It’s going to be interesting to follow Starbucks’ entry into the music business. Does it need to be as big as Virgin? Of course not, it just has to show increased margin per customer.
Same with Apple. Asking simple questions like: “What is a computer?” Or, “What is software?” opened Apple up to a great new world where it enjoys the highest margin per customer in the business.
What about you? Do you know your share of wallet? Before you can increase it, you need to know where you currently stand.