Glossary (Pricing Potential Dashboard)

Median Revenue

For each Product, aggregates Revenue per Customer over the last 12 months. Gets the middle value in the revenue range.

Median Revenue = the middle value (See the calculation in the attached file at the end.)

Median Margin

For each Product, aggregates Gross Gross Margin per Customer over the last 12 months. Gets the middle value in the margin range.

Median Gross Margin = the middle value (See the attachment at the end.)

Corner of Shame

These are customers that generate the lowest X^th percentile of margin and at the same time the lowest X^th percentile of revenue.
X is configurable, currently it is 10.

X^th Percentile Revenue

Revenue value where X% of the range falls below it. (See the attachment at the end.)

X^th Percentile Margin

Margin value where X% of the range falls below it. (See the attachment at the end.)

Deviation Revenue

= (Revenue per Customer - Median Revenue) / Median Revenue *100

Deviation Margin

= (Margin per Customer - Median Margin) / Median Margin *100

Optimization

From the Corner of Shame:

• Eliminates Y% revenue of the Corner, sorts by ascending. Currently Y=20, can be configured.

• Increases the margin of the remaining (80% of revenue) Customers to the 10

^th Percentile Margin value.

Pricing Potential

= ∑Margin after optimization - ∑Margin before optimization

Increase/Decrease Revenue

= ∑Revenue after optimization - ∑Revenue before optimization

Increase/Decrease Revenue %

= (∑Revenue after optimization - ∑Revenue before optimization) / ∑Revenue before optimization * 100

Increase/Decrease Margin %

= (∑Margin after optimization - ∑Margin before optimization) / ∑Margin before optimization * 100

Example

Open

Percentile point will be calculated by the formula which works as PERCENTILE_DISC in SQL. Therefore it will be equal to a specific column value.