How can you create a formula to rank customers based on their annual spend?

Using the RANK function is the most suitable option for creating a formula to rank customers based on their annual spend. The RANK function allows you to assign a rank to a set of values in a specified order, which is precisely what is needed when you want to determine the hierarchy of customers based on their total expenditure.

When you apply the RANK function, it evaluates the annual spend amounts for each customer and assigns a rank number – the highest spender receives a rank of 1, the next highest a rank of 2, and so on. This offers a clear and concise way to identify which customers are the top spenders in your dataset.

The other functions listed do not serve the purpose of ranking. The SUM function aggregates values but does not provide any ranking, while the AVG function calculates the average of a dataset, also without ranking. The COUNT function counts the number of items but does not provide any insight into their value or ranking relative to each other. Therefore, for the specific task of ranking customers based on spend, the RANK function is the most effective choice.