1. What are Percentile Measures?
Percentile measures divide your data into parts, highlighting the values below which a certain percentage of observations fall. In AngularView, Percentile measures are calculated for the following financial metrics:
- Order Subtotal: The total value of items in an order before shipping, taxes, or discounts.
- Current Total Price: The total paid for an order, including all taxes and discounts.
The key Percentile measures include:
- Percentile25: The value below which 25% of the data points fall.
- Percentile50 (Median): The value below which 50% of the data points fall.
- Percentile75: The value below which 75% of the data points fall.
- Percentile90: The value below which 90% of the data points fall.
These measures help merchants understand the distribution of their financial data, offering valuable insights into customer spending patterns.
2. Value to Merchants
- Understand Spending Distribution:
Percentile measures reveal how customer spending varies, helping merchants identify spending patterns across different segments. - Refine Pricing and Promotion Strategies:
By analyzing spending thresholds, merchants can design targeted promotions to encourage customers to move to higher spending brackets. - Optimize Resource Allocation:
Percentile analysis helps merchants identify high-value customers (e.g., customers in the top 10% of spending) and allocate resources effectively to retain them.
3. Why These Measures Matter to Your Business
AngularView calculates Percentile measures across selected metrics and dimensions, offering a detailed view of financial trends. For example:
- Percentile25 for Order Subtotal: Identifies the spending threshold for the bottom quartile of orders, helping merchants understand minimum spending behavior.
- Percentile75 for Current Total Price: Highlights the spending threshold for the top 25% of orders, indicating the higher-value customer segments.
Combining Percentile measures with other metrics provides deeper insights:
- Percentile90 + CLV: Identify customers in the top spending bracket and develop personalized strategies to enhance their lifetime value.
- Percentile50 + AOV: Understand if the median order value aligns with the average order value to refine pricing strategies.
- Percentile75 + Refund Rates: Evaluate whether higher spending thresholds correlate with higher refund rates and adjust product or service quality.
4. How Percentile Measures are Calculated
AngularView calculates Percentile measures by:
- Sorting Data:
- The selected financial metric (e.g., Order Subtotal or Current Total Price) is sorted in ascending order.
- Applying Percentile Calculation:
- The measure identifies the value below which a specified percentage of data points fall.
- Dimension-Specific Calculations:
- Percentiles are recalculated across selected dimensions (e.g., time periods, product types) for granular insights.
Formula Example for Percentile90:\text{Percentile90} = \text{Value Below Which 90% of Data Points Fall}
5. Practical Examples of Percentile Measures in Action
- Percentile25 for Current Total Price: A merchant identifies that 25% of orders are below $20. They introduce promotions targeting this group to encourage higher spending.
- Percentile50 (Median) for Order Subtotal: The median order subtotal is $45. The merchant adjusts product bundles to encourage more orders in this range.
- Percentile90 for Current Total Price: Customers in the top 10% spend over $200 per order. The merchant launches exclusive loyalty rewards to retain these high-value customers.