Developing customer satisfaction and customer loyalty has captured the attention of small business owners—and rightly so. Every business owner wants happy, satisfied customers. Loyal customers buy more and refer people to your business more, right? Well, maybe. According to Harvard Business Review, “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.” (“Customer Loyalty Isn’t Enough. Grow Your Share of Wallet,” Harvard Business Review, October 2011).

It’s not enough to focus on customer satisfaction; you need to also pay attention to what share of your customers’ wallets is spent on your business and products as opposed to your competitors’ businesses and products. What is your rank relative to other brands? Satisfied customers may still buy other brands. Walmart learned this the hard way in 2008 when they re-designed their stores and saw an improvement in customer satisfaction because of the changes. However, as satisfaction rose, same-store sales began their longest decline in Walmart’s history. While satisfaction increased, Walmart’s share of the customers’ wallets dropped.

To improve your share of wallet, you need to understand what drives how your customers rank your business or product. Survey your customers. Ask them why they use each of the products they do. Why do your customers prefer your competitor to you? The bottom line is that to improve share of wallet, you must improve your rank in your customers’ wallets. If you want to more information on improving this driver of business success, check out the article’s Wallet Allocation Rule and suggestions for how to improve your rank.