Minor Project Report

On

A Study On Market Share of Airtel

Submitted in Partial Fulfillment for the Award of the

Degree of BBA 2023-25

Under the Guidance of: Submitted By-

Dr. Deepak Dagar Anushka Das
Assistant Professor Enrollment Number-
01561101722

Maharaja Agrasen Institute of Management Studies

(A unit of Maharaja Agrasen Technical Education Society)
Affiliated to GGSIP University; Recognized u/s 2(f) of UGC
Recognized by Bar Council of India; ISO 9001 : 2015 Certified Institution
Maharaja Agrasen Chowk, Sector 22, Rohini, Delhi-110086
 CERTIFICATE FROM THE INSTITUTE GUIDE

This is to certify that the minor project titled A STUDY ON MARKET SHARE OF AIRTEL is an academic

work done by Anushka Das submitted in the partial fulfillment of the requirement for the award of

the degree of Bachelors of Business administration (BBA) at Maharaja Agrasen Institute of

Management Studies, Delhi, under my guidance & direction.

To the best of my knowledge and belief the data & information presented by her in the project has

not been submitted earlier.

Signature :

Name of the Guide : Dr. Deepak Dagar

Designation : Assistant Professor

 STUDENT DECLARATION

This is to certify that I have completed the Minor Project report titled; A STUDY ON MARKET SHARE

OF AIRTEL under the guidance of Dr. Deepak Dagar in partial fulfillment of the requirement for the

award of Degree of BBA at Maharaja Agrasen Institute of Management Studies, Delhi. This is an

original piece of work & I have not submitted it earlier elsewhere.

Date: Signature-
Place- Delhi
Name- Anushka Das
Enrollment No.- 01561101722
 Acknowledgement

Guidance, inspiration and motivation have always played a key role in the success of any
venture. I would like to pay my sincere regards to all those who guided me in my project work.
I would like to avail this opportunity to pay my sincere gratitude and regards to Dr. Rajni
Malhotra Dhingra, Director and Dr. Manoj Verma, HOD, Business Administration, Maharaja
Agrasen Institute of Management Studies for providing me such a wonderful opportunity to
widen the horizons of my knowledge. I would also like to express my heartfelt thanks to my
Project Supervisor, Dr. Deepak Dagar , Assistant Professor for giving his support, guidance
and encouragement throughout the project work.
Last but not the least I would like to thank my parents, family and friends who have directly or
indirectly contributed in making this project a success.

Name of the Student: Anushka Das

University Enrolment No: 01561101722
Program & Section: BBA- IV D
TABLE OF CONTENT
 OBJETIVE

Unveiling Airtel's Customer Satisfaction Landscape: Project Objectives

A project analyzing Airtel's customer satisfaction aims to gain a comprehensive

understanding of how Airtel customers perceive the company's services. This
understanding can be achieved through various objectives:
1. Gauge Customer Sentiment:
• Measure overall satisfaction levels with Airtel's network coverage, call quality, data
speeds, and internet services.
• Identify areas where Airtel excels and areas needing improvement.
• Uncover specific pain points customers face, such as billing issues, customer service
interactions, or plan offerings.
2. Benchmark Against Competitors:
• Compare Airtel's customer satisfaction with other telecom service providers in the
market.
• Identify Airtel's competitive advantages and disadvantages in terms of customer
experience.
3. Identify Loyalty Drivers:
• Understand the factors that influence customer loyalty towards Airtel.
• Explore what motivates customers to stay with Airtel or switch to competitors.
• Analyze the impact of factors like pricing, network reliability, and customer service on
loyalty.
4. Formulate Actionable Insights:
• Translate customer feedback into actionable recommendations for Airtel.
• Suggest improvements to specific services, network infrastructure, or customer
support processes.
• Provide data-driven insights to help Airtel enhance customer experience and
satisfaction.
5. Future-Proofing Airtel's Strategy:
• Understand customer expectations and preferences related to emerging technologies
and telecom trends.
• Identify potential areas for Airtel to innovate and cater to evolving customer needs.
 • Equip Airtel with valuable customer insights to make informed strategic decisions for
the future.
By achieving these objectives, the project will provide Airtel with a roadmap to
improve customer satisfaction, strengthen brand loyalty, and gain a competitive edge
in the telecom industry.
 CHAPTER 1

Introduction to the Company & Industry

INDUSTRY PROFILE

INTRODUCTION

An industry is an area of economic production which involves large amounts of upfront capital
investments before any profit can be realized. In economics and urban planning, industrial is
an intensive type of land use with economic activity involve with Manufacturing and
production.

ABOUT TELECOMMUNICATION

The process of transmitting or receiving information over a distance by any electric or

electromagnetic medium can be called as Telecommunication. Information may take the form
of voice, video, or data. Over the last 2,000 years we have learned to communicate over land,
sea and space. Telecommunications was the cutting edge business of the 19th century and the
foremost growing industry of the past 100years.
BRIEF HISTORY OF TELECOM IN INDIA

❖ Telecommunication came to India first in 1838. It was in the year when the first operational
land line were laid By the government near Calcutta ( seat of British power).
❖ Later in 1881, the telephone service was first introduced in India.
❖ Nothing major happened till 1985 when department of Telecommunication (DOT) was
established. It was an exclusive provider of domestic and long distance Service that would be
it’s own regulator ( separate from the postal system).
❖ Twelve years later, in 1997 Telecom Regulatory Authority of India (TRAI) came into
existence.

8
DIFFERENT PLAYERS IN TELECOM INDUSTRY IN INDIA
❖ BHARATI AIRTEL
❖ VODAPHONE- IDEA
❖ RELIANCE
❖ TATA INDICOM
❖ BSNL
❖ AIRCEL (closed)
❖ SPICE
❖ MNTL
❖ JIO

Indian mobile telephony market is increasing day by day and there is more to happen with
technological up gradations occurring nearly every day and the ever- increasing demand for
easier and faster connectivity, the mobile telephony market is expected to race ahead.
Indian has a fast- growing mobile service market Services market with excellent potential for
the future. With almost 5 million subscribers amassed in less than two years of operation.
India’s growth has far exceeded that of numerous other markets, such as China and Thailand,
which have taken more than 5 years to reach the figure India Current holds. The number of
mobile phone subscribers in the country would exceed 50 million by 2005 and cross 300
million by 2010, according to the Cellular Operators Association of India (COAI). According
to recent strategic Research by frost & Sullivan, Indian cellular Services market, such growth
grates can be rarely attributed to the drastically falling price of mobile handsets, with price
playing a fundamental role in Indian subscribers recruitments. Subscribers in certain region can
accrue the handset at almost no cost, thanks to the mass- market stage these technologies have
reached internationally. The Indian consumer can buy a handset for Rs.150 or less. This should
lead to increased subscribership.
This Market is growing at an extremely fast pace and so is the competition between the mobile
service providers.
With the presences of a number of mobile telephony services provider including market leaders
like Airtel, reliance, Idea, Vodafone, Tata indicom etc who are providing either of the two
network technologies such as global System for mobile communications (GSM) and code
division multiple access (CDMA). The cellular service there are 2 main competing network
technologies; global System for mobile communication (GSM)and code division multiple
access (CDMA)

9
 COMPANY PROFILE

INTRODUCTION-
Bharti Tele soft, the telecom and e-commerce venture of Bharti Enterprises , India has
Maintained a very close track on technology and new services to help its customers and
Partners thrive on change. Bharti Tele soft is an Indian software company with a clear
Distinction. As part of India’s largest telecom group, it is uniquely able to harness rich domain
Experience to the customer’s benefit. Instead of being an IT company providing telecom
Solutions, we pride ourselves in being just the opposite! Bharti Tele soft is fast on the way to
Attaining a position of leadership in the IT world, through its clear focus on telecom, backed
by rich domain expertise. The company has one of the best development facilities in the
Country, and has offices in India, United States and United Kingdom. Bharti Healthcare.
The corporate ethos of providing the best to our customers carries extra relevance when it
Comes to healthcare products. One sector where quality implies the saving of lives and the
Promotion of healthy living. Offering quality support to the pharmaceutical industry, Bharti
Healthcare has been engaged in the manufacture of empty hard Gelatine capsules since 1982

ABOUT AIRTEL
India's largest mobile phone and Fixed Network operators. With more than 40 million
subscriptions, the company is one of the world's fastest growing telecom companies.
It offers its mobile services under the Airtel brand and is headed by Sunil Mittal,India's sixth
richest man with a total worth of US$10 billion. The company is the only GSM operator to
provide mobile services in all the 23 circles in India. The company also provides telephone
services and Internet access over DSL in 14 circles. The company complements its mobile,
broadband & telephone services with national and international long distance services. The
company also has a submarine cable landing station at Chennai, which connects the submarine
cable connecting Chennai and Singapore. The company provides reliable end-to-end data and
enterprise services to the corporate customers by leveraging its nationwide fiber optic
backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and
international bandwidth access through the gateways and landing station.
Airtel is the largest cellular service provider in India in terms of number of
subscribers. Bharti Airtel owns the Airtel brand and provides the following services under the
brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone
Services (Fixed line and Internet Connectivity), Long Distance Services and Enterprise
Services (Telecommunications Consulting for corporates).
Leading international telecommunication companies such as Vodafone and SingTel hold
partial stakes in Bharti Airtel.
In April 2006 Bharti Global Limited was awarded a telecommunications licence in
Jersey in the Channel Islands by the local telecommunications regulator the JCRA. In
September 2006 the Office of Utility Regulation in Guernsey awarded Guernsey
Airtel with a mobile telecommunications licence.

10
In May 2007 Jersey Airtel and Guernsey Airtel announced the launch of a relationship with
Vodafone for island mobile subscribers. In July 2007, Bharti Airtel signed an MoU with
Nokia-Siemens for a 900 million dollar expansion of its mobile and fixed network

BHARTI AIRTEL

TYPE : public, Listed on BSE and NSE

FOUNDED :. 1995
HEAD : Delhi, India
KEY PEOPLE: Sunil Bharti Mittal (chairman and MD)
INDUSTRY: Telecommunication
PRODUCTS: Mobile Network, Wireless, Landline, Broadband, satellite television.
REVENUE: $15 Billion (2017)
BILLION PROFIT: $19.4 Billion (2010)
TOTAL ASSETS: $36 Billion
TOTAL EQUITY:. 511 Billion (2017)
EMPLOYEES: 25,400 (December 2017)
PARENT: Bharti Enterprises (64%)
10
In News –

Recently Sunil Bharti's Airtel launched its calling card in America specially for the NRI (Non-
resident Indians) and people calling from America to India at a cheaper rate as compared to the
tariff offered by other providers.On February 12, 2007 Vodafone sold its 5.6% stake in AirTel
back to AirTel for US $1.6 billion; and purchased a controlling stake in rival Hutchison Essar.
In its monthly press release, following statistics have been presented for end of April 2007.

Bharti Airtel added the highest ever net addition of 53 lakh customers in a single quarter (Q4-
FY0607) and also the highest ever net addition of 1.8 crore total subscribers in 2006-07.The
company will invest up to $3.5 billion this fiscal (07-08) in network expansion. It has an
installed base of 40,000 cellsites and 59% population coverage After the proposed network
expansion, an additional 30,000 towers will result in the company achieving 70% population
coverage Bharti has over 39 million users as on March 31, 2007.It has set a target of 125 million
subscribers by 2010 Prepaid customers account for 88.5% of Bharti’s total subscriber base, an
increase from 82.7% a year ago ARPU has dropped to Rs 406 Non-voice revenues, (SMS,
voice mail, call management, hello tunes and Airtel Live) constituted 10% of total revenues
during Q4, lower than 10.7% in the Q4 of the previous year Blended monthly minutes of usage
per customer in Q4 was at 475 minutes. Has completed 100% verification of its
subscribers and in the process disconnected three lakh subscribers .

VISION

"To provide global telecom services and delight customers."

MISSION
They will meet the mobile communication needs of customers through:
Error- free service delivery.
Innovative products and services .

BHARTI ENTERPRISE
Bharti Enterprises is one of India’s leading business groups with interests in telecom,
agri business, insurance and retail.
Bharti Enterprises has successfully focused its strategy on telecom while straddling diverse
fields of business. From the creation of 'Airtel', one of India's finest brands, to becoming the
largest manufacturer and exporter of world class telecom terminals under its 'Beetel' brand,
Bharti has created a significant position for itself in the global telecommunications sector.
Bharti Airtel Limited is today acknowledged as one of India's finest companies, and its flagship
brand 'Airtel', has over 44 million customers across the length and breadth of India.While a
joint venture with TeleTech Inc., USA marked Bharti’s successful foray into the Customer
Management Services business, Bharti Enterprises’ dynamic diversification has continued
with the company venturing into telecom software development. Bharti has successfully
launched an international venture with EL Rothschild Group owned ELRO Holdings India
Ltd., to export fresh Agri products exclusively to markets in Europe and USA. Bharti also has

11
a joint venture - ‘Bharti AXA Life Insurance Company Ltd.’ - with AXA, world leader in
financial protection and wealth management. Bharti has recently forayed into retail business
under a company called Bharti Retail Pvt. Ltd. It also has an MoU with Wal-Mart for the cash
& carry business.

SERVICES AIRTEL PROVIDE -

The Company is a part of Bharti Enterprises, and is India's leading provider of

telecommunications services. The businesses at Bharti Airtel have been structured
into three individual strategic business units (SBU’s) - mobile services, broadband
& telephone services (B&T) & enterprise services. The mobile services group
provides GSM mobile services across India in 23 telecom circles, while the B&T
business group provides broadband & telephone services in 90 cities. The Enterprise
services group has two sub-units - carriers (long distance services) and services to
corporate. All these services are provided under the Airtel brand. It includes -

• Voice Services
• Mobile Services
• Satellite Services
• Managed Data & Internet Services
• Managed e-Business Services

Voice Services

Bharti Airtel became the first private fixed-line service provider in India. It is now promoted
under the Airtel brand. Recently, the Government opened the fixed-line industry to unlimited
competition. Airtel has subsequently started providing fixed-line services in the four circles of
Delhi, Haryana, Madhya Pradesh, Karnataka, Tamil Nadu & UP (West).

Airtel Enterprise Services believes that these circles have high telecommunications potential,
especially for carrying Voice & Data traffic. These circles were strategically selected so as to
provide synergies with Airtel’s long distance network and Airtel’s extensive mobile network.

Airtel Enterprise Services, India's premium telecommunication service, brings to you a whole
new experience in telephony. From integrated telephone services for Enterprises and small
business enterprises to user-friendly plans for Broadband Internet Services (DSL), we bring
innovative, cost-effective, comprehensive and multi-product solutions to cater to all your
telecom and data needs.

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Voice - Product Portfolio

Airtel Enterprise Services telephone services go beyond basic telephony to offer our users a
whole host of Value Added Services as well as premium add-ons. Each
telephone connection from Airtel Enterprise Services is backed by a superior fibre-optic
backbone for enhanced reliability and quality telephony. Few of the Value Added Services
offered are Calling Line Identification, Three Party Conferencing, Dynamic Lock, Hunting
Numbers, and Parallel Ringing etc.
Airtel Enterprise Services Voice Services provide Free Dial-up Internet access that is bundled
along with your Telephone connection from Airtel. It’s fast, reliable and gives you unlimited
Internet access.

Mobile Services

Airtel’s mobile footprint extends across the country in 21 telecom circles. It’s service
standards compare with the very best in the world. In fact, that’s how Bharti has
managed to win the trust of millions of customers and makes it one of the top 5
operators in the world, in terms of service and subscriber base.

The company has several Firsts to its credit:

• The First to launch full roaming service on pre-paid in the country.
• The First to launch 32K SIM cards.
• The First in Asia to deploy the multi band feature in a wireless network for efficient
usage of spectrum.
• The First to deploy Voice Quality Enhancers to improve voice quality and acoustics.
• The First telecom company in the world to receive the ISO 9001:2000 certification
from British Standards Institute

Satellite Services

Airtel Enterprise Services provides you connectivity where ever you take your business
Our Satellite Services bring you the benefits of access in remote locations. Airtel Enterprise
Services is a leading provider of broadband IP satellite services and DAMA/PAMA services
in India. Their solutions support audio, video and voice applications on demand.
Satellite Services include :

• PAMA/DAMA
• BIT - Internet
• VPN
• Satellite based IPLCs for redundancy reasons

Managed Data & Internet Services

Airtel Enterprise Services brings you a comprehensive suite of data technologies. So they are
able to support all types of networks and ensure their customers can migrate their network to

13
the future seamlessly. Their Managed Data & Internet services make their customers future
proof.
Managed Data & Internet Services include :

• MPLS
• ATM
• FR
• Internet
• IPLC
• Leased Lines
• Customised Solutions
• International Managed Services
• Metro Ethernet

Managed e-Business Services

Airtel Enterprise Services offers an internationally benchmarked, carrier class hosting, storage
and business continuity services.
A range of services that help to keep your business running the way you want- 24x7. Thanks
to their world-class high tech Data Centers.
Managed e-Business Services include :

• Co-lo: Dedicated and Shared

• BCRS Services
• Web hosting

AIRTEL GROWTH STRATEGY

MANTRA:
Focus on Core Competencies and outsource the rest!
Airtel has partnered with leading players in telecommunication sector across the
globe. It has managed to work with the best of domain specialists globally and
emerge as a world class entity. Partnerships include operational contracts with
marquee vendors and strategic investors ranging from private equity investors to
global telecom giants. Following are the major partnerships of AIRTEL:

• Warburg Pincus – a celebrated PE investor held a stake for a substantial

period of time and was instrumental in providing Airtel support in its early
stages.

• Vodafone was a strategic investor in Airtel. The investment made by

Vodafone in BHARTI is one of the largest investments made in Indian
telecom sector.

• Temasek – the Singapore based investor holds a considerable stake in it.

14
 • Ericsson was given the mandate to provide, manage and maintain the
equipment as well as provide quality assurance in Airtel‘s then 13 mobile
circles.

• IBM was given the mandate to handle the back office requirements of
Airtel’s presence in India

• The company has a strategic alliance with Singtel. The investment made by
SingTel is one of the largest investment made in the world outside
Singapore.

• In the case of broadband and telephone services and enterprise services,

equipment suppliers include Siemens, Nortal and corning.

• The call centre operations for the mobile services have been outsourced to
IBM Daksh, Mphasis and Hinduja TMT.

ACHIEVEMENTS

• First to launch Cellular service on November 1995.

• First operator to revolutionaries the concept of retailing with the inauguration
of Airtel Connect (exclusive showrooms) in 1995.
• First to introduce push button phone in India.
• First to expand its network with the installation for second mobile switching
center in April, 1997 and the first to introduce the Intelligent Network Platform.
First to provide Roaming to its subscribers by forming an association called
World 1 Network.
• First to provide roaming facility in USA. Enjoy the mobile roaming across 38
partner networks & above 700 cities. Moreover roam across international
destinations in 119 countries including USA, Canada, and UK etc with 284
partner networks.
• It is also the first company to export its products to the USA.

PROMOTIONAL STRATEGY

• After the liberalization of the Indian Telecom Sector in 1994, the Indian
cellular market witnessed a surge in cellular services. By 2005, there were a
total of 12 players in the market with the five major players being Bharti Tele-
Ventures Limited (Bharti), Bharat Sanchar Nigam Limited (BSNL),
Hutchinson-Essar limited (Hutch), Idea Cellular limited (Idea) and Reliance
India Mobile (RIM).
• All the players except RIM offered services based on the Global System for
Mobile (GSM) technology. RIM provided services based on Code Division
Multiple Access (CDMA) technology as well as GSM.

15
 As competition in the telecom arena intensified, BHARTI AIRTEL took new
initiatives to woo customers. Prominent among these were-celebrity
endorsements, loyalty rewards, discount coupons, business solutions and talk
time schemes. AIRTEL has used most number of celebrities for
advertisements. The list includes-Sachin, Shahrukh, Rehmaan, Saif Ali Khan,
Kareena Kapoor, Zaheer Khan etc. The most important consumer segments
in the cellular industry were the youth segment and the business class
segment. The youth segment was the largest and fastest growing segment and
was therefore targeted most heavily by cellular service provider.

• Bharti Tele-Ventures adopted celebrity endorsement as its chief promotional

strategy. By 2004 it emerged the unprecedented leader commanding the
largest market share in the cellular service market. Hutch implemented the
celebrity endorsement strategy partially, relying primarily on its creative
advertising for the promotion of its brand. BSNL, on the other hand, attracted
the consumer through its low cost schemes. Being a state owned player,
BSNL could cover rural areas, and this helped it increase its subscriber base.
Reliance was another player that cashed on its innovative promotional
strategies, which included celebrity endorsements and attractive talk time
schemes. Idea relied heavily on its creative media advertising sans celebrities.

MARKETING STRATEGY

Core Value of Airtel –

• Performance
• Dynamism
• Leadership

Targeting –

• Elite
• Up market professionals
• Entrepreneur with business plans
• Low income mass category
• Youth
• Women and senior citizens by post paid connection

Advertisement-
Airtel basically uses two appeals to connect to the users

• Emotional
• Humorous

16
RELATIONSHIP MANAGEMENT

Accordingly, Airtel was the first cellular service provider to start customer centres (called
Airtel connects), where customers could pay their bills, apply for new connections and touch
and feel new handset models.
The way to the future, though, seems to be through product innovations such as easy charge
(recharging prepaid connection through SMS), hello tunes, the Blackberry option, stock tickers
and M-cheques (mobile credit cards).
The customer care centers, too, are metamorphosing into "relationship centres", one-stop shops
where subscribers can not only pay their bills and have their queries answered, they can shop
for new phones, surf the net and enjoy a cup of coffee. "What matters is what the customers
want," points out Mittal.
Based on their vision statement their product Promotion strategy and Ad Campaign is based.
Airtel is an amazingly successful brand. It has very visible advertising, with a fairly high share
of voice.
As mobile services are an extremely competitive (cutthroat?) category, there are a number of
advertising renditions that happen. One of the most interesting as a consumer was the one with
A. R. Rahman in Hyde Park, was it, playing with an assortment of musicians even as an adoring
recording artist listens to the music that is carried through Airtel mobile's service. It was a
brilliant track. Airtel had integrated this piece of communication, making it a fairly popular
ringtone. Every second Airtel user had this ringtone and enthusiastic guys even used it in their
cars as they reversed.

AIRTEL – EXPRESS YOURSELF

Brands often lose their way when their communication deviates from a tried and
tested property just to be different. This is not a situation that cannot be salvaged,
though. Brands stray when they try to be different for the sake of being different.
The desire to be different is pretty common in advertising. And this desire to be
different usually means a break from the past.
AIRTEL’s Ads are trend setting Ads and considered a landmark Product promotion,
which they are doing for their Broad Band and telephone services are also a land
mark promotion campaign.
Promotions, whose need is increasingly being felt by the surging services sector, will
click if they realize marketing objectives and reinforce brand values.
Other precautions too need to be taken in the case of promotions. For instance, too many
promotions can be detrimental to the health of a brand. A brand, which is perpetually on price-
off, would not only lose key brand attributes but also consumer interest. The consumer's
reasoning being if a product is cheaper now, does it mean I was being overcharged earlier?
Similarly, if a brand is always doling out freebies, sales would be affected when
there are no freebies on offer.
Marketers agree that no matter the market segment, for any promotion to be
successful it has to be a part of an overall marketing strategy and not a one-off sales-
driving initiative.

17
 CHAPTER 2
INTRODUCTION TO THE TOPIC
 REVENUE MARKET SHARE – BHARTI AIRTEL LEADS

TRAI data reveals that the overall wireless industry revenues grew 3.3% qoq in 4Q after
remaining flat in the previous 3 quarters. At the end of FY 2010 [March-10], Bharti Airtel still
leads the Revenue Market share in Wireless segment with a Pan India share of 32% down from
32.8% a year ago and a peak of 33.9% in June-09. This is how Wireless Operators rank w.r.t
Revenue Market Share at the end of March-2010.

• Bharti Airtel 32%

• Vodafone 20.8% [Consistent]

• Reliance Communications -11.7% [ Losing to competition ]

• BSNL 9.3% [ Loser]

• Tata Tele [ Gaining on the back of DoCoMo’s innovative strategies

• Aircel 4%

The following Chart shows how Wireless Operators Revenue Market Share varied in
the past year.

Bharti Airtel Magic touch for revenues continues in many Telecom Circles across India.
19
 The following map shows the breakup of Revenues for the Top 3 Operators across all
states-

Total amount of money a customer can spend on a certain product category is a vital piece of
information for planning and managing sales and marketing efforts. This amount is usually
referred to as the customer’s wallet (also called opportunity) for the product category. There
are many possible uses for wallet estimates, including straightforward targeting of sales force
and marketing actions towards large wallet customers and prospects. In a more sophisticated
sales and marketing environment, the combination of classical propensity models for a
particular product category with the knowledge of the wallet for the same category can direct
the sales efforts: it allows a company to market not only to customers or potential customers
with a large wallet, but also to those with a high probability of buying specific products in the
category.By combining the customer wallet estimates with the data on how much they spend
with a particular seller, we can calculate the share-of-wallet that the seller has of each customer
for a given product category. This information allows the seller to target customers based on
their growth potential, a combination of total wallet and share-of-wallet. The classical
approach of targeting customers that have historically generated large amounts of
revenue for the company (known as lifetime value modeling) does not give enough
importance to customers with a large wallet, but small share-of-wallet, which are the ones with
presumably the highest potential for revenue growth.Share-of-wallet is also important for
detecting partial defection or silent attrition, which occurs when customers increase their
spending in a given category, without increasing the amount purchased from a particular
company. In certain industries, customer wallets can be easily obtained from public data. For
example, in the credit card industry, the card issuing companies can calculate the wallet size
and respective share-of-wallet using credit records from the three major credit bureaus. For
most industries, however, no public wallet information is available at the customer level.