exampleOne of the key components of the Strategic Pricing model is categorizing your customers into market segments. The combination of customer categories, such as resellers or contractors, and customer sizes, such as medium and large, is used to drive the pricing assignments and calculations. Using your export data, Strategic Pricing Associates recommends customer size thresholds for you, and you manually enter the number they provide you for each customer category.
Note: We recommend reviewing and making updates to your customer sizes on a yearly or twice yearly basis, or on the guidance of Strategic Pricing Associates.
Complete the following prior to defining category size thresholds:
Define customer categories
in the
Assign the categories to your customers that you want to use Strategic Pricing. If the categories are not assigned, then the normal Eclipse Pricing model applies.
Export data and work with Strategic Pricing Associates to determine your thresholds.
The thresholds you set are buckets for classifying your customer base and are based on the customer size factor you set for Strategic Pricing. For example, if you choose to use invoice dollars and enter a threshold of 2500, that equals $2500 in invoiced sales for the past 12 months. When you run the customer size update, it recommends categorizing customers in the buckets based on these settings. Using the customer size factors allows you to continually refine how your customers are classified and how you tier your pricing model based on your customer's purchasing activity.
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Important: The customer size factor you select applies to all customers who have a customer category assigned in Customer Maintenance. |
To set up customer size thresholds:
From the Maintenance > Price Maintenance > Strategic Pricing menu, select Strategic Pricing Maintenance to display the Strategic Pricing Maintenance window.
In the left plane, click Customer Categories to display the Customer Size Thresholds table.
In the Calculate customer size using field, select how you want to determine a customer's size:
Invoice Dollars - Determines a customer's category and size combination by the total amount of sales dollars invoiced to that customer.
Invoice Quantity - Determines a customer's category and size combination by the total number of products invoiced to that customer.
For each customer category and size combination, enter the lower limit threshold value. Each row within a column must be greater than the row above it.
For example,
you have a customer category called Contractor.
The threshold you set for medium sized contractors must be greater than
the threshold you set for small size contractors. Thus, creating a scale
as the categories grow in size as shown in this example
Setting a threshold value for Very Tiny for any customer category is optional. Leaving this cell blank makes the lowest threshold limit zero.
From the File menu, select Save to save the threshold limits.
See Also:
Updating Customer Sizes Overview
