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Customer Class Settings

Updated

Summary

 The Customer Class Settings screen is where you configure how StockIQ scores and stratifies (ABC classes) your
 customers based on their purchasing activity.

 It is accessible by clicking Admin --> System Configuration --> Customer Class Settings.

Unlike Item Class Settings, customer classing does not support per-group overrides — there is a single set of classing settings that applies to all customers. The related Global Customer Class Settings screen controls whether customer classing is enabled at all, how often it recalculates, and how new/dead/slow customers are treated, and where the ABC breaks fall once classing runs.

Once calculated, a customer's ABC class, score, and rank drive the Customer Stratification grid, the Top Customers view, and related Customer Analysis reporting giving you a way to prioritize service, outreach, or account review by the same weighted criteria you configured here.

 

ABC Options

The first box has basic configuration information for your customer classes:

  • Num Months of History: How far back to look into sales history when gathering the data used for classing. Typical is 12 months.
  • Classing Method: Determines how customers are sorted into classes:
    • Relative- customers are ranked by score and classes are assigned based on cumulative percentage breaks (e.g. the top 80% of the combined score = "A").
    • Absolute- customers are assigned a class based on a fixed spend/revenue threshold, regardless of how other customers rank. Switching to Absolute hides the ABC Classing Criteria box, since Absolute classing is driven by revenue only.

ABC Break Values

When using the Relative classing method, the ABC Break Values box lets you define where the breaks between classes occur, based on each customer's cumulative score.

StockIQ scores every active customer according to the classing criteria you define below, sorts customers by that score from high to low, and keeps a running total. When the running total crosses a break value, the next class begins.

  • Break values must be strictly ascending (A < B < C < D).
  • Only the last active class's break value may equal 100% — it must equal exactly 100%, since the last class has to absorb all remaining customers.
  • The number of classes shown (A/B/C or A/B/C/D/E) is controlled by Number Of ABC Classes on the Global Customer Class Settings screen.

 A typical setup looks like:

  •  A = 80%
  • B = 95%
  • C = 99%
  • D = 100%

When Classing Method is set to Absolute, this box replaces ABC Break Values. Here you set a fixed revenue/spend threshold for each class — any customer with revenue at or above the A Threshold is class A, at or above the B Threshold (and below A) is class B, and so on.

  • Thresholds must be strictly descending (A Threshold > B Threshold > C Threshold > D Threshold).
  • Any customer whose revenue doesn't clear the lowest configured threshold falls to "X".
  • Absolute classing always scores customers by revenue — there's no criteria mix to configure, since the threshold itself defines the class.

ABC Classing Criteria

Available only under the Relative classing method, this box lets you choose which measures determine a customer's score — and therefore where they land in the ranking. As with item classing, you can use as many or as few of these as you like, but the weights must add up to 1.0 (100%).

The available criteria are:

  • % Hits- the number of order-line "hits" the customer generated. A hit is a unique appearance of an order line for that customer; a sales order with 5 lines contributes 5 hits, regardless of quantity.
  • % Cogs- the customer's total cost of goods sold.
  • % Revenue- the customer's total sales revenue.
  • % Margin- the customer's total gross margin.
  • % Quantity Sold- the total units purchased by the customer.

Each customer's score for a given measure is their percentage contribution to the company-wide total for that measure. For example, if total company-wide Hits across all customers is 1,000, and a given customer generated 10 of those hits, their Hits score is: 10 / 1,000 = 0.01

When multiple criteria are used, the individual scores are prorated by the weight you've assigned to each. So if you're weighting 75% Hits and 25% Revenue, and the customer's Hits score is 0.01 and Revenue score is 0.04, their combined score is: (0.01 * 0.75) + (0.04 * 0.25) = 0.0175

Customers are then sorted by combined score, descending, and StockIQ walks down the list accumulating score until each ABC Break Value is crossed — exactly as described above.

How Special Classes Are Assigned

Not every customer gets classed purely by score. A few overrides happen automatically and aren't configured on this screen:

  • New customers ("N")- any customer still within the New Customer Age (Days) window (set on Global Customer Class Settings) is classed "N" rather than scored, since there isn't yet enough history to rank them fairly.
  • Zero-activity customers ("X")- a customer with no measurable score (e.g. no sales in the history window) is classed "X".
  • Critical customers ("!") - if a customer is flagged Critical in customer master data, their class always displays as "!", overriding whatever class was calculated.
  • ERP-supplied class- if the customer record has an ABC class supplied directly from the ERP, that value overrides the calculated class (similar to how an Order Policy override behaves for items).