Assigning Rank in Customer Velocity Pricing

Use Customer Velocity Pricing to build matrix cells based on customer ranking. With velocity pricing, sales prices update to reflect changes in a customer's rank. Customer velocity pricing can achieve the following:

• Reward highly ranked customers with lower prices.

• Minimize the number of matrix cells needed for pricing.

• Ensure that up-to-date customer performance information is being used to set pricing policy.

Set up customer rank in the Customer Ranking program to measure sales and credit reliability. Velocity pricing and customer ranking work together to change the sell matrix cell formula as customer rank changes over time, as follows:

• Customer additional velocity pricing - The system adds a formula to each progressive sell matrix cell that increases the price as the customer's rank falls.

• Customer alternate velocity pricing - The system changes the formula on the original sell matrix, including formulas for quantity breaks, based on the customer rank. For each customer/product matrix cell, you can set up alternate velocity pricing for either a customer or product, but not both. Alternate velocity pricing overrides additional velocity pricing.

This topic contains the following procedures:

• Displaying the appropriate velocity pricing dialog box

• Applying customer additional velocity pricing.

• Applying customer alternate velocity pricing.

To display the velocity pricing dialog box:

1. From the Maintenance > Price Maintenance menu, select Sell Matrix to display the Sell Matrix Maintenance window.

2. Enter the necessary information to display the sell matrix you want to use.

3. Select Edit > Velocity Pricing to display the Velocity Pricing selection dialog box

4. Select one of the following:

5. Customer Additional - Displays the Customer Velocity Pricing dialog box. Continue with the additional velocity pricing procedure.

6. Customer Alternate - Displays the Customer Velocity Pricing - Alternate dialog box. Continue with the alternate velocity pricing procedure.

To apply customer additional velocity pricing:

1. In the Rank Number field on the Customer Velocity Pricing dialog box, enter a customer ranking method number.

Note: Customers are ranked A through H. Ranking methods use numbers 1 through 5.

View customer ranks on the A/R Customer Ranking window (A/R > A/R Inquiry).

2. In the Additional Formula column, enter the formula that applies to the matrix for each rank to lower or raise the price according to the profitability of the product.

For example, you might adjust the following ranked customer's pricing as follows:

Note: If both customer and product velocity formulas are assigned to a matrix cell, the system combines the additional formula from each dialog box and calculates a selling price.

3. Save your changes and exit the dialog box.

To apply customer alternate velocity pricing:

1. In the Rank Number field on the Customer Velocity Pricing - Alternate dialog box, enter the number of a customer ranking method.

Note: Ranking methods are numbered 1 through 5. Customers are ranked A through H.

Select File > Ranking to view current customer ranks.

2. In the Basis column for each rank (A through H), enter the basis for determining the selling price.

3. In the Formula column for each rank (A through H), enter the formula to use with the basis for determining the selling price.

For example, you might replace the pricing for a rank 1 customer as follows:

4. Save your changes and exit the dialog box.

The alternate velocity pricing entries replace the original matrix cell's pricing set up when the customer places an order.

See Also:

Ranking Customers

Product Ranking Overview

Assigning Rank in Product Velocity Pricing

Creating Sell Matrix Cells