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  3. ABC classification



What is ABC classification in SAP (CRM-ANA - CRM Analytics)?



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SAP Term: ABC classification

  • Component: CRM-ANA

  • Component Name: CRM Analytics

  • Description: A frequently used analytical method to classify objects for example, customers, products or employees based on a particular measure revenue or profit. For example, you can classify your customers into three classes A, B and C according to the sales revenue they generate.


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  • Key Concepts: 
    ABC classification is a method of categorizing items based on their value or importance. It is used in SAP CRM Analytics to group products, customers, and other items into three categories: A, B, and C. Items in category A are the most important and have the highest value, while items in category C are the least important and have the lowest value. 
    
    How to use it: 
    ABC classification can be used to prioritize resources and focus efforts on the most important items. For example, in SAP CRM Analytics, it can be used to identify which products are the most profitable or which customers are the most valuable. This information can then be used to make decisions about how to allocate resources and focus marketing efforts. 
    
    Tips & Tricks: 
    When using ABC classification, it is important to consider both the value and importance of each item. For example, a product may have a high value but not be very important to the overall business strategy. Similarly, a customer may have a low value but be very important for customer retention. 
    
    Related Information: 
    ABC classification is related to other methods of categorization such as Pareto analysis and 80/20 rule. These methods can also be used to prioritize resources and focus efforts on the most important items.
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