Categories
- Ondřej Tesař
- Štěpán Vacek
Customer Classification by Revenue
This category should be calculated based on last 12 months.
Calculation
Obtain the sorted (descending) sum of revenue for each customer.
Calculate the contribution value of each customer using the formula:
∑Revenue of customer / ∑Revenue of all customersCalculate the cumulative revenue contribution for each customer.
Classify customers into different categories based on their cumulative revenue contribution over the past 12 months.
Category |
|---|
A ≤ 20% |
B ≤ 50% |
C ≤ 95% |
D rest |
The thresholds are configurable.
For more information see Customer Revenue Classification.
Example
Customer Id | Invoice Price (SUM) | Contribution | Cumulative | Class by Revenue |
|---|---|---|---|---|
CD-00016 | 523,655 | 16.92% | 16.92% | A |
CD-00007 | 522,656 | 16.89% | 33.81% | B |
CD-00026 | 512,354 | 16.56% | =D3+C4 | C |
CD-00020 | 512,179 | 16.55% | 66.92% | C |
CD-00019 | 512,147 | 16.55% | 83.46% | C |
CD-00015 | 511,736 | 16.54% | 100.00% | D |
Product Classification by Volume
This category should be calculated based on last 12 months.
Calculation
Obtain the sorted (descending) sum of volume for each product.
Calculate the contribution value for each product using the formula:
∑ Volume per product / ∑Volume per all productsCalculate the cumulative volume contribution for each product.
Classify products into different categories based on their cumulative volume contribution over the past 12 months.
Category |
|---|
Very High Volume ≤ 10% |
High Volume ≤ 20% |
Normal Volume ≤ 75% |
Low Volume rest |
The thresholds are configurable.
For more information see Product Quantity Classification.
Customer Segment
To group customers by common characteristics, the Customer Segment is defined in the Company Parameters – a list of fields the segment consists of, e.g. customer size, region, country etc.
For more information see PFXTemplate_CustomerInsights_Customer_Segment.
According to values aggregated on the Customer Segment level, certain KPIs for particular customers are calculated, e.g. cross sell.
Product Type
The classification of a product as either Commodity or Specialty is based on the following criteria:
Margin % = Margin Value / Invoice Price valueCategory |
|---|
Commodity ≤ 40% |
Specialty > 40% |
The thresholds can be modified using the Configuration in the Company Parameters.
Calculation
Ensure that the value is calculated as the sum of the product's value across all customers over the last 12 months, rather than for a single customer. This means there will be only one record for each Commodity and Specialty product based on the data from the previous 12 months.
When selecting Year-to-Date (YTD), Month-to-Date (MTD), etc., the chart will filter products that have transactions during the specified period. If a product does not have any transactions within that time frame for a given customer, it will not be included in the results.
Example
We have 30 products Commodity, 70 products Specialty in the last 12M.
For customer X in YTD, only 50 products have transactions, 20 of them is Commodity, the rest is Specialty, so the chart will show this accordingly.