What is incremental value in SAP CEC-MKT-CAT - Customer Attribution?

SAP Term: incremental value

• Component: CEC-MKT-CAT

• Component Name: Customer Attribution

• Description: The increase of conversions that can be attributed to a marketing campaign.

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• Key Concepts: 
  Incremental value is a term used in SAP CEC-MKT-CAT Customer Attribution to measure the value of a customer’s purchase relative to their previous purchases. It is calculated by subtracting the customer’s average purchase amount from their current purchase amount. This helps businesses understand how much additional value a customer has brought in with their current purchase. 
  
  How to use it: 
  To calculate incremental value, first determine the customer’s average purchase amount. This can be done by taking the total amount spent by the customer over a certain period of time and dividing it by the number of purchases made during that period. Then, subtract this average purchase amount from the customer’s current purchase amount to get the incremental value. 
  
  Tips & Tricks: 
  When calculating incremental value, it is important to consider the time frame used to calculate the average purchase amount. If the time frame is too short, then the incremental value may not be an accurate representation of the customer’s true value. On the other hand, if the time frame is too long, then it may not reflect recent changes in customer behavior. 
  
  Related Information: 
  Incremental value is just one of many metrics used in SAP CEC-MKT-CAT Customer Attribution to measure customer loyalty and engagement. Other metrics include customer lifetime value, average order size, and frequency of purchase. By understanding these metrics, businesses can better understand their customers and tailor their marketing strategies accordingly.