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Decile Analysis
What is Decile Analysis?
Decile analysis groups your customers into 10% categories by revenue or margin. First, we show you how much of your revenue/margin is produced by the top 20% of your customers. Often, you'll see some correspondence to the 80/20 rule, where 80% of your revenue/margin is produced by the top 20% of your customers.
Decile Analysis Components
Decile Analysis Transactions Analysis
We show you what transaction data differentiates each decile. You receive graphs showing the differences between customers in each decile showing their number of orders per year, revenue/margin per transaction, items per transaction, and revenue per item. You see if your efforts should be directed to getting more orders per customer, selling higher revenue/margin items, or cross-selling to get more items per transaction.
The chart below is one part of the decile transactions analysis showing the differences in number of transactions per year.
Best Customers Identification
Our third decile analysis uses decision trees to show the external variables that separates your top 20% from the other 80%. This could be the states where they are located, their department, their industry, etc. With this information, you can look for prospect "clones" that can grow to become top customers. You may also want to vary customer service to these top customers.
This chart shows what differentiates the top 20% -- your best customers -- from the rest.
Decile Migration
Decile migration shows how customers move between deciles each year and over the long-run. This helps you direct your efforts to retention, growing your existing customers, or gaining new customers. This is all shown through charts showing migration, measured both by the number of customers and weighted by their revenue.This chart is one of the many charts showing migration by year and over time. This one shows the migration over five years.
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