What is expected value in SAP SRD-CRM - CRM-Customer Relationship Management?

SAP Term: expected value

• Component: SRD-CRM

• Component Name: CRM-Customer Relationship Management

• Description: The anticipated financial worth of an opportunity.

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• Key Concepts: 
  Expected value is a term used in SAP Customer Relationship Management (CRM) to refer to the estimated value of a customer or customer segment. It is calculated by multiplying the probability of a customer making a purchase by the expected revenue from that purchase. 
  
  How to use it: 
  Expected value can be used to prioritize customers and customer segments for marketing and sales activities. It can also be used to determine which customers are most likely to respond positively to certain offers or promotions. 
  
  Tips & Tricks: 
  When calculating expected value, it is important to consider both the probability of a customer making a purchase and the expected revenue from that purchase. This will help ensure that the expected value is an accurate representation of the customer's potential value. 
  
  Related Information: 
  Expected value is closely related to other concepts such as customer lifetime value and customer segmentation. Understanding these concepts can help businesses better understand their customers and make more informed decisions about how to best serve them.