In our blog we often address how to reach top of wallet status. That’s the end goal, to be sure. However, not every card starts off in the top spot. Sometimes your credit union’s card gets stashed behind one or two other cards. In that case, your card’s share of wallet is woefully low.
So how can your credit union increase its share of wallet? How can you go from a forgotten backup card to a more central role? Well, we can help you answer that.
What Is (My) Share of Wallet?
Please excuse us if this sounds remedial. If you’re already familiar with share of wallet, feel free to skip right past here. But in case you want a refresher—or if you want to make sure we’re all on the same page—we promise to make this quick and painless.
Share of wallet refers to the percentage of payments your card accounts for in a consumer’s wallet. If a credit union member has three cards and they use each card equally, then each card has 1/3, or 33.3% share of wallet. If they have three cards, but 90% of all payments are put on one, then that card has 90% share of wallet.
It would be difficult to figure out what your card’s share of wallet is if you don’t know the variables. For example, you’d need to know how many other cards or payment options the consumer has. You’d also have to know how much they spend on each. You would also need to know if they’re banking with any other financial institutions.
Fortunately, there are product and account aggregators that compile that information for you. You can quickly determine your card’s share of wallet for each member without resorting to complicated mathematics.
Increasing Your Card’s Share of Wallet
You can’t just email your members and ask them to use your card more. That is to say, you can, but you shouldn’t. It’s better to look at the situation holistically: why aren’t your members using your card more?
It may be that other cards offer better perks or incentives. Or perhaps their other cards have been in their wallets longer, so they’ve developed a stronger relationship with them. Regardless of what’s going on, you’ll need to offer some kind of advantage to members putting more payments on your card.
Part of looking at things holistically is answering honestly: can your card compete? If your cards offer competitive advantages, then you’ll be far better able to compete. If it doesn’t, then your members may be choosing another card purely for the competitive advantages, perks, or rewards that it offers.
Now, a couple strategies for increasing your card’s share of wallet.
1. Leverage Data
The share of wallet aggregators on the market do more than help you calculate your card’s share of wallet. They also help you sift through data to understand your members’ spending habits. Those habits can lend key insights about what kind of products, services, and lifestyle choices each member prefers.
Leveraging that data and those insights can help you develop better perks and incentives for your card. If you see that someone spends more on fashion, cosmetics, and hygiene, you can use that information to change up your reward structure. Instead of offering cash back on specific purchases or a $25 credit for a first purchase, you can offer something you already know they’ll like:
For example, you might offer a free month of BirchBox or StitchFix.
Offering tangible products, services, and incentives based on your members’ specific likes and dislikes could significantly increase your card’s share of wallet.
2. Make It Easy to Switch
Inertia is a powerful force. If someone has been using one or two cards consistently, it becomes a habit. They might not be better cards, but they have convenience and inertia on their side.
If you can find a way to disrupt that inertia—or make your card more convenient—then you have the opportunity to increase your card’s share of wallet. One way of increasing convenience is by offering a centralized app to store and control online, subscription, and recurring payments. Giving people the ability to switch from one payment method to another allows you the chance to further incentivize using your card. As a bonus, it will also provide value to them irrespective of how they use it, further increasing trust in your brand.
If you’d like to learn more about increasing your card’s share of wallet or how to increase your interchange revenue, subscribe to our blog! Or follow the links below to see what else we’ve written lately.