Other analyses that are Differences between often with Decile Analysis include ABC Analysis and RFM Analysis. These three methods differ in the number of groups that can be and the number of indicators.
Difference from ABC analysis
ABC analysis divides subjects into three groups using one indicator, whereas decil analysis divides subjects into 10 groups.
When analyzing the same indicator, “purchase amount (sales amount),” ABC analysis roughly classifies customers into the top 20% group A, the middle group B, and the remaining group C. Decile analysis, on the other hand, divides into 10 groups, so the resolution of customer data is higher. For example, you can grasp the characteristics of the top 10% of customers.
Due to its simplicity
ABC analysis is often special database outside of business situations. Indicators can also be flexibly set. Decile analysis, on the other hand, is mostly in sales and marketing, with the “purchase amount” as an indicator.
Difference from RFM analysis
Image of RFM analysis
RFM analysis analyzes a customer’s purchasing history using three indicators: “Recency (last purchase date),” “Frequency (purchase frequency),” and “Monetary (cumulative purchase amount).” In contrast, deciles analysis only analyzes using one indicator: “purchase amount.”
Unlike decile analysis and ABC analysis, RFM analysis is by its analysis, which allows for more 5 irresistible whatsapp templates to double your sales precise customer segmentation. For example, customers can be into 3 to 5 groups, such as “good customers,” “growing customers,” “stable customers,” “lost customers,” and “dormant customers.” However, RFM analysis is somewhat difficult, and is best to marketers.
Differences in characteristics of the three analysis methods
Why is it important to consider deciles?
When creating personas, many marketers have trouble coming up with a clear image of their company’s ideal customer. This is because they only have a vague understanding of their company’s customers.
By dividing data into 10 chine directory parts using deciles analysis, you can get a better understanding of your customers by getting a complete picture of your customers and the tendencies of your loyal customers. Deciles analysis provides insights for considering sales and marketing strategies.
Reason 1: You can visualize your sales structure
The number of clients is huge, and they come from a wide variety of industries and scales. By dividing sales amounts into 10 groups using deciles analysis, you can see what industries and scales of companies are prevalent in each group.
Even if the Pareto principle shows that 20% of customers are important, the composition ratio may actually vary depending on the company, with decile 1 (the top 10 percent) being prominent and decile 1 to 3 being evenly at about 20%. E-commerce shops that sell a wide variety of products in small quantities have a long tail, with groups 3 to 10 being long, and there are unique patterns depending on the business model.