What is customer value index in SAP CRM-ANA - CRM Analytics?

SAP Term: customer value index

• Component: CRM-ANA

• Component Name: CRM Analytics

• Description: Expresses how valuable a customer is to a company. The index is based on the customer contribution margin. The customer value index is calculated as follows where CM = contribution margin; x, y, z = weighting Customer value index = CM 1 * x + CM 3 * y + CM 3 / CM 1 * z In the analytical application Churn Management, the customer value index is calculated using the data mining method Scoring. You can specify the weighting yourself.

Smart SAP Assistant

• Key Concepts: 
  The Customer Value Index (CVI) is a metric used in SAP CRM Analytics to measure the value of a customer to a business. It is calculated by taking into account the customer’s past purchases, current purchases, and potential future purchases. The CVI is used to identify customers who are most likely to be profitable and loyal in the future. 
  
  How to use it: 
  The CVI can be used to prioritize customers for marketing campaigns, target customers for upsell and cross-sell opportunities, and identify customers who may need additional support or attention. It can also be used to identify customer segments that are most likely to be profitable and loyal in the future. 
  
  Tips & Tricks: 
  When using the CVI, it is important to consider other factors such as customer satisfaction, customer loyalty, and customer engagement. Additionally, it is important to consider the customer’s lifetime value when calculating the CVI. 
  
  Related Information: 
  The CVI is closely related to other metrics such as Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC). Additionally, it can be used in conjunction with other analytics tools such as predictive analytics and segmentation analysis.