This glossary helps pricing leaders and revenue teams quickly look up definitions across industries. Browse by industry, then scan terms and concise definitions.
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- ARIMA: A time‑series method that models trends and patterns to forecast demand.
- ARPA: Average revenue per account (customer).
- ARPU: Average revenue per user in a given period.
- Account Segmentation: Grouping customers by value or needs to tailor price and service.
- Anchoring: Behavioral bias where people rely heavily on first information presented
- Annual Contract Value (ACV): Annual Contract Value; value of a contract per year.
- Annual Recurring Revenue (ARR): Annual Recurring Revenue; the yearly value of all active subscriptions/contracts.
- Application Programming Interface (API): Is a software that allows different applications to communicate and exchange data
- Approval Matrix: Who must approve certain discounts or deal levels.
- Assortment Optimization: Pick the right set of SKUs (Stock Keeping Unit) to maximize goals within space limits.
- Attach Rate: How often an add‑on is purchased with a base product.
- Auto‑Renewal: Contracts renew automatically unless cancelled.
- Available to Promise (ATP): The uncommitted portion of a company’s inventory and planned supply that can be confidently used to fulfill new customer orders within a specified timeframe
- Average Deal Size: Average revenue per closed deal.
- Baseline Analysis: Establishing a reference point (e.g., sales, costs, demand) to measure impact of pricing or promotional changes.
- Baseline Sales: Expected sales without promotions or unusual events.
- Bayesian Updating: Statistical updating of beliefs as new data arrives
- Behavioral Pricing: Applying behavioral economics (loss aversion, framing, decoy effects) to increase conversion and willingness to pay.
- Billing Interval: The frequency at which billing occurs (monthly, quarterly, etc.)
- Bookings-to-Billings Ratio: Leading indicator comparing signed value to billed revenue.
- Break-Even Analysis: The price/volume combination where profit = 0; supports investment and markdown calls.
- Bundle Discount Rate: Discount applied when buying multiple items in a bundle
- Bundle Pricing: Price multiple products/services together as a package.
- Burn Multiple: How efficiently a company turns cash burn into growth.
- Buyer Journey: The steps prospects take from awareness to purchase.
- Buying Center: Roles involved in a B2B purchase decision.
- CAC Payback: Months needed to recover CAC (Customer Acquisition Cost) from gross margin.
- COR (Cost of Revenue): The direct cost associated with generating revenue
- Causal Forecasting: Forecasts that include causes like price, promo, and events.
- Ceiling Price: The maximal allowable price in a market or contract
- Channel Conflict: Tension between channels (e.g., direct vs reseller) over price or margin.
- Channel Margin: Margin allocated per distribution channel
- Choice-Based-Conjoint (CBC): Survey‑based model that reveals value for features and price trade‑offs.
- Churn Rate: Percent of customers or revenue lost in a period.
- Cluster Analysis: Statistical grouping of similar customers or products.
- Configure Price Quote (CPQ): Configure‑Price‑Quote software that guides pricing and quoting.
- Conjoint Analysis: A market research method that estimates part-worth utilities and WTP (Willingness to Pay) by testing attribute/price trade-offs; core to price pack architecture and offer design.
- Constraint Programming: Optimization technique with constraints (e.g. capacity, rules)
- Contribution Margin: Revenue minus variable costs; used for pricing and mix decisions.
- Contribution Margin 1 (CM1): Profit after direct variable cost
- Contribution Margin 2 (CM2): Profit after direct channel cost
- Contribution per Unit: Profit contribution on a per unit basis (revenue minus variable costs)
- Cost Per Mille (CPM) Elasticity: price elasticity of demand in the digital advertising context, where changes in the CPM (price) affect the number of impressions (demand)
- Cost of Goods Sold (COGS) : the direct costs incurred in producing or purchasing the goods that a company sells during a specific period
- Cost‑Plus Pricing: Set price by adding a markup to cost.
- Cost‑to‑Serve: All costs to fulfill and support a customer/order after gross margin.
- Co‑op Marketing: Joint marketing funded by supplier and retailer.
- Cross-Elasticity: When the price of one item changes, demand for related items moves too (substitutes, complements). no changes for unrelated goods
- Cross-Validation (Forecasting): Hold‑out testing to check model accuracy on unseen data.
- Cross-sell Rate: Percentage of customers who buy related products
- Customer Acquisition Cost (CAC): average sales and marketing cost to win a customer.
- Customer Lifetime Value (CLTV): total profit expected from a customer over the relationship.
- Deadweight Loss: Loss in economic efficiency from suboptimal pricing or taxes
- Deal Desk: Team that reviews and approves non‑standard deals.
- Decomposition (Price × Volume × Mix): An analytics framework to separate revenue variance into price effect, volume effect, and mix.
- Decoy Effect: Offering a third option to steer customers toward a target option
- Deferred Revenue: Cash collected for goods/services not yet delivered.
- Demand Forecast: Estimated demand based on history, seasonality, and drivers like price.
- Demand Forecasting: Predicting future sales using time-series, causal, and ML models; inputs to capacity, inventory, and pricing.
- Demand Sensing: Using near‑real‑time signals to adjust short‑term forecasts.
- Direct‑to‑consumer (D2C): Business model where brands sell their products directly to their end customers online, through their own website/stores, bypassing traditional intermediaries.
- Discounting: Lowering prices to stimulate demand or close deals.
- Dual Variable: Value from the dual problem in optimization, often shadow prices
- Dynamic Pricing: Automatically adjust prices with demand, inventory, or competition.
- EBITDA Margin: EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) as a percent of revenue.
- Earnings Before Interest, Taxes, Depreciation, Amortization (EBITDA): Earnings Before Interest, Taxes, Depreciation, and Amortization; financial metric used to measure a company’s operating performance
- Elasticity Estimation: Statistical estimation of demand response to price.
- Elasticity Modeling: Statistical estimation of price and promo elasticities (and cross-elasticities) to simulate scenarios and price ladders.
- Entry Multiple: Acquisition price divided by a financial metric.
- Everyday Low Price (EDLP): Pricing strategy where retailers maintain consistently low prices on products over a long period, eliminating the need for frequent sales or discounts
- Exit Multiple: Expected sale multiple at exit.
- FX Impact: Effect of currency movement on revenue or margin.
- FX-Neutral Growth: Growth after removing currency effects.
- Feature Importance: Shows which inputs matter most to the prediction.
- Fill Rate: Percent of demand fulfilled immediately from stock.
- Floor Price: The minimal price below which a product cannot go
- Floor‑Ceiling Contract: A commercial term that defines rights, obligations, or pricing protections.
- Foreign Exchange (FX): Referring to the process of converting one country’s currency into another and the global market where these conversions occur
- Freight Terms: Agreement on who pays freight and how it’s billed.
- Gabor-Granger: A direct-elicitation technique asking purchase intent at different prices to model demand curves and optimal price points.
- Gain Chart: Cumulative version of lift; how much signal is captured.
- Game Theory Pricing: Pricing strategies considering competitive responses
- Good-Better-Best Ladder: A clear ladder of feature/price tiers.
- Good‑Better‑Best (GBB): Tiered packages aligned to different willingness to pay.
- Gross Margin: (Revenue − COGS (Cost of Goods Sold)) ÷ Revenue; shows product profitability before overheads.
- Gross Revenue Retention (GRR): Gross Revenue Retention; revenue kept from existing customers, excluding expansions.
- Growth Margin: Incremental margin from growth investments
- Hedging: Use financial instruments to offset commodity or Foreign Exchange (FX) risk.
- Hierarchical Forecasting: Forecast at multiple levels (SKU, category, total) coherently.
- Hi‑Lo Pricing: Businesses set high initial prices for products and then periodically reduce them through sales, promotions, and discounts to attract customers, create excitement, and drive sales
- Holt-Winters: Exponential smoothing method for level, trend, and seasonality.
- ICP (Ideal Customer Profile): Description of the best‑fit customer type.
- Incoterms: International rules defining delivery responsibility and risk.
- Indexation: Automatic price adjustment using an external index.
- Index‑Based Pricing: Link prices to an external index (e.g., commodity).
- Inventory Optimization: Calculate stock targets that hit service goals at lowest cost.
- Isoelastic Demand: Demand function with constant elasticity over price
- Kits & Bundles: Pre‑combined Stock Keeping Unit (SKU) sold together.
- Known Value Items (KVI): Used by shoppers to compare prices.
- Land and Expand: Start small with a customer and grow via expansion.
- Lead Time: Time from order to delivery.
- Leakage Audit: Systematic review to find and close revenue/price leaks.
- Lift Curve: Chart of model’s ability to capture positives vs random.
- Line Architecture: How products are structured across features and prices.
- List Price: Public/reference price before any discounts or adjustments.
- Loss Aversion: Behavioral economics concept: losses loom larger than gains
- MAE: Mean Absolute Error; average absolute difference between actual and forecast.
- MAPE: Mean Absolute Percentage Error; average percent error of a forecast.
- Margin Improvement: Initiatives to increase profit margins through pricing, cost reduction, or mix optimization.
- Margin Waterfall Bridge: Bridge showing how margin evolves through deductions and costs
- Markdown Cadence: The schedule of markdown steps.
- Markdown Optimization: Plan markdowns to clear inventory while protecting margin.
- Market Segmentation: Dividing customers into distinct groups for targeted pricing
- Menu Costs: Friction or cost of changing prices (e.g. updating catalogs)
- Micro-Segmentation: Fine‑grained segmentation using multiple attributes.
- Minimum Advertised Price (MAP): Minimum Advertised Price; floor on public advertised price.
- Mix: The sales composition across products, segments, or channels.
- Mix Optimization: Shift sales mix toward higher‑margin items.
- Mixed-Integer Programming: Optimization with yes/no or integer decisions (e.g., pick a price tier).
- Monthly Recurring Revenue (MRR): Monthly Recurring Revenue; recurring revenue recognized per month.
- Most Favored Nation (MFN): Customer receives the best price given to any buyer.
- Multi-Period Optimization: Optimization across multiple periods (intertemporal)
- Net Price: Price after all on‑invoice discounts or allowances.
- Net Price Realization: How much of list/reference price is actually captured after all leakage.
- Net Price Realization: Actual price captured vs. list.
- Net Revenue: Revenue after returns, discounts, and allowances.
- Net Revenue Retention (NRR): Net Revenue Retention; revenue kept from existing customers after expansion and churn.
- Next-Best-Offer: Offer predicted to be most relevant for a given customer.
- Off‑Invoice Allowance: Discount taken directly on the invoice.
- Omnichannel: Unified customer experience across online and offline channels.
- Open marketplace (OMP): A broad, inclusive online platform where a diverse range of sellers offer their ad inventory to any interested buyers through automated, real-time bidding auctions
- Operating Margin: Operating income as a percent of revenue.
- Optimization Algorithms: Mathematical solvers (linear/nonlinear, stochastic, reinforcement learning) that recommend profit-maximizing prices subject to constraints.
- Option Value: Value from preserving flexibility (e.g. waiting to sell)
- Organic Growth: Growth excluding acquisitions/divestitures and FX.
- Outlier Detection: Spot and treat abnormal data points that distort analysis.
- Overage: Fees for usage beyond the plan allowance.
- Panel Regression: Regression leveraging panel (time + unit) structure
- P&L Bridge: Walk from previous to current results explaining drivers like price, volume, mix, FX.
- PINC: Price increase needed to offset a change in cost while keeping margin constant.
- Parity Clause: Contract term requiring equal or better price than others.
- Payback Period: Time needed for profits to recover an investment.
- Payment Terms: When invoices must be paid (e.g., Net 30).
- Penetration Pricing: Intro price set low to gain share quickly.
- Persona: Short profile describing goals and needs of a buyer type.
- Per‑Seat Pricing: Charge per user or seat.
- Pipeline Coverage: Qualified pipeline divided by bookings target for a period.
- Pocket Margin: Profit after all discounts, rebates, and costs to serve on a transaction.
- Pocket Price: Net price minus post‑invoice items like rebates or freight allowances.
- Price Band: Observed spread of realized prices for comparable items.
- Price Communication: Internal/external messaging for price changes.
- Price Corridor: The allowed price range by segment/channel/region.
- Price Elasticity: How much demand changes when price changes (e.g., −1.5 means demand falls 1.5% for a 1% price rise).
- Price Escalator: A pricing concept or policy that affects how prices are set or realized.
- Price Guardrails: Rules that limit discounts and guide approvals.
- Price Hold: A pricing concept or policy that affects how prices are set or realized.
- Price Implementation: Rolling new prices through systems and channels.
- Price Increase Communication (PINC): Best practices in structuring and delivering price increase messages to minimize churn/attrition.
- Price Index / Competitor Index: Relative price vs a benchmark or market basket; used to balance value perception and profitability.
- Price Leakage: Price or margin lost through discounts, rebates, errors, or terms.
- Price Match Policy: Retailer promise to match a competitor’s price.
- Price Mix: Change driven by different price points/tiers gaining share.
- Price Optimization: Use data and rules to recommend prices that hit goals.
- Price Parity: Keeping the same price across channels or sites.
- Price Point: A commonly accepted price level in the market that consumers expect or accept
- Price Realization: The percentage of list price that companies actually capture after discounts, rebates, and negotiations.
- Price Recommendation Engine: System that suggests price points using data and rules.
- Price Rigidity: Tendency of prices to adjust slowly due to costs, contracts, or norms
- Price Sensitivity Score: Index of how responsive a segment is to price changes.
- Price Simulation / Scenario Planning: “What-if” modeling of price, promo, mix, and cost changes to forecast revenue and margin outcomes.
- Price War: Competitive reduction in prices leading to margin erosion
- Price Waterfall: Step‑by‑step view from list price to pocket price and margin.
- Price‑Volume Trade‑off: Balance between higher price and potential volume loss to hit targets.
- Pricing Architecture: Structuring sizes, formats, and price points to match Willingness To Pay and channel missions; e.g. foundational in Consumer Packaged Goods
- Pricing Governance: Simple rules, guardrails, and approvals that control discounting and protect margin.
- Pricing Strategy: The plan for how a company sets and updates prices to win customers and improve margin without hurting demand.
- Pricing by Value Chain Step: Distributor’s price adjustment methodology
- Private marketplace (PMP): An invite-only, real-time bidding (RTB) auction where publishers offer premium digital ad inventory to a select group of advertisers under agreed-upon terms
- Pro Forma Revenue: Revenue as if recent acquisitions/disposals were included all period.
- Promo Depth: How deep the discount is during a promotion.
- Promo Frequency: How often promotions run for a product or category.
- Promo ROI: Profit gained from a promotion divided by the cost of running it.
- Promo Uplift: Extra units sold because of a promotion versus normal sales.
- Propensity to Buy: Likelihood that a target will purchase soon.
- Propensity to Churn: Likelihood a customer will leave soon.
- Prophet: Forecasting model that handles seasonality and holidays.
- Quality of Earnings (QoE): Validate that earnings are accurate and sustainable.
- Quote Validity: How long a quote remains valid before it must be updated.
- RFM (Recency, Frequency, Monetary): Segmenting customers by recency, purchase frequency, and spend.
- RMSE: Root Mean Squared Error; emphasizes larger errors.
- Rebate: Post‑purchase credit or payment tied to behavior (e.g., volume, growth).
- Reference Price / Anchoring: The mental benchmark price customers expect; anchoring and decoys can shift perceived value.
- Return On Investment (ROI): Performance measure showing how much profit (or value) is gained compared to the cost of the investment.
- Revenue Leakage: Revenue lost due to process errors, disputes, or policy gaps.
- Revenue Mix: Share of revenue by product, channel, or segment.
- Revenue Optimization: Find the best mix of price and demand to maximize revenue.
- Revenue Run Rate: Projected annual revenue based on the current period.
- Rule of 40: SaaS health rule: growth rate + profit margin ≈ 40% or more.
- Run-Rate EBITDA: EBITDA normalized for steady‑state operations.
- SKU Rationalization: Reduce or replace low‑value SKUs (Stock Keeping Unit) to improve performance.
- Safety Stock: Buffer inventory to meet the service level under uncertainty.
- Sales Cycle Length: Average time from first qualified meeting to closed won.
- Sales Enablement: Training and content that help sales sell value and price.
- Scenario Planning (Pricing): Build ‘what‑if’ pricing cases to assess impact.
- Seasonality Index: Regular seasonal pattern that lifts or lowers demand.
- Seat Expansion: Increase in purchased seats/licenses over time.
- Segmentation: Grouping customers based on shared characteristics such as industry, behavior, or willingness to pay.
- Sensitivity Analysis (Pricing): Test how results change when a key number (price, cost, volume) moves.
- Service Level: Probability of meeting demand without stocking out.
- Shadow Price: Implied value of relaxing a constraint (e.g. resource limit) in optimization
- Should‑Cost: Model of what an item should cost based on inputs and process.
- Skimming: Start high to capture early adopters, then lower later.
- Statement of Work: Statement of Work; A formal document that defines the specific deliverables, scope, timelines, responsibilities, and pricing for a given engagement under a broader agreement
- Sticker Shock: Psychological effect when price seems unusually high
- Stochastic Programming: Optimization under uncertainty (e.g. demand distributions)
- Stock Keeping Unit (SKU) – A unique identifier used to track individual products in inventory, typically combining attributes such as brand, style, size, and color.
- Stockout: Inventory runs out and sales are lost or delayed.
- Surcharges: Additional fees charged on top of base price.
- Surge Pricing: Temporarily raising prices when demand is very high
- Surplus Capture: Portion of value between willingness to pay and cost captured by seller
- Target Price: The desired or goal price point set by a company to achieve margins or market positioning.
- Tariff: Government-imposed tax on imported or exported goods, designed to regulate trade, protect domestic industries, or generate revenue. Learn more about how tariffs works.
- Theil’s U: Relative forecast error compared to a naive benchmark.
- Tiered Pricing: Pricing where different levels or tiers are offered (e.g. Silver / Gold / Platinum)
- Tiered Rebate: Rebate rate that increases at higher purchase levels.
- Time Decay: Concept that value (or utility) decreases over time (e.g. for perishable service)
- Time-Series Forecasting: Forecasting methods that use time‑ordered data.
- Total Contract Value (TCV): Total Contract Value over the full term, including one‑time fees.
- Trade Spend: Money paid to retailers for promotions and distribution support.
- Trade-Up Path: Planned steps that move buyers to higher‑value offers.
- Trial Conversion: Trials that become paid customers.
- True‑Up: Periodic reconciliation of contracted vs. actual usage, billing the difference.
- Two‑Part Tariff: Fixed fee plus a variable usage fee.
- Unit Economics: Per‑unit profitability view (e.g., per customer or order).
- Upsell Rate: Percentage of customers who upgrade or purchase add-ons
- Usage‑Based Pricing: Charge in proportion to usage (e.g., per GB, per Application Programming Interface (API) call).
- Value Capture: The process of extracting economic value from each stage of the value chain through pricing and margin management.
- Value Creation Plan (VCP): Structured plan to grow EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) and value post‑deal.
- Value Messaging: Clear explanation of value that justifies price.
- Value‑Based Pricing: Set price based on the value delivered to the customer.
- Van Westendorp: Survey asking four price questions to find an acceptable price range.
- Van Westendorp (PSM): Price Sensitivity Meter collecting acceptable/too-cheap/too-expensive thresholds to define perceived value bands.
- Volume: Total units sold in a period.
- Volume Mix: Change in performance caused by a shift in sales composition.
- Volume‑Mix‑Price (VMP): Bridge that explains revenue or margin change by volume, mix, and price.
- WMAPE: Weighted Mean Absolute Percentage Error (MAPE) (110); errors weighted by volume.
- Walkaway Price: The price below which a customer leaves (reservation price)
- Waterfall Analytics: Measurement of each step from list to pocket price.
- Web Scrapping: the automated process of extracting data and content from websites, transforming it into a structured format like a spreadsheet
- What-If Simulator: Tool that lets you play out scenarios and see results.
- Willingness to Pay (WTP): The most a customer will pay; measured with surveys or experiments to find optimal price points.
- Win Rate: Share of opportunities won out of total qualified opportunities.
- Win-Loss Analysis: the systematic process of analyzing why sales deals are won or lost to understand the specific reasons, especially regarding pricing, that influence buyers’ decisions
- Yield Management: Method of maximizing revenue by controlling inventory and price over time
- sMAPE: Symmetric Mean Absolute Percentage Error (MAPE); balances over/under‑forecasting.
B2B
- Configure-Price-Quote (CPQ): Software that standardizes quoting with rules and approvals so reps price deals correctly.
- Net-Net Price: Price after all discounts, rebates, and allowances (fully net)
- Pocket (Net) Price: What you actually collect after all discounts, promos, rebates, and fees.
- Pricing Group: A segment of customers/products grouped together for pricing purposes.
- Rebate Clawback: Reclaiming rebate funding when conditions not met
- Relationship-Based Pricing (RBP): Pricing based on the overall customer relationship rather than per product
- Value Messaging Framework: Structured way to articulate value for pricing justification
- Value-Based Pricing: Pricing based on the value customers get, not just costs. Done right, it lifts revenue and price realization.
Business Services
- Average Daily Rate (ADR): Key indicator in the hospitality industry, measuring the average revenue earned per paid occupied room on a daily basis
- Backlog (Services): Value of confirmed service work not yet delivered.
- Bench: Staff not currently assigned to billable work.
- Bid Price: The marginal value threshold used in revenue management to accept or reject demand
- Billable Utilization: Percent of time worked that is billed to clients.
- Blended Rate: Average hourly rate across roles/levels.
- Cancellation Fee: Charge applied when a client cancels scheduled work.
- Change Order: Formal client‑approved change to scope, timing, or cost.
- Chargeability: How much employee time is charged to revenue work.
- Delivery Surcharge: Extra fee for expedited or high‑complexity delivery.
- Engagement Letter: Contract that outlines scope and terms of an engagement.
- Fixed Bid: Provider delivers defined scope for a fixed price.
- Gainshare: Pricing where provider shares in client’s measured gains.
- Holiday Premium: Higher rates for work on holidays.
- Hypercare: Intensive support immediately after go‑live.
- Knowledge Transfer: Structured handoff of know‑how to client teams.
- Managed Services: Ongoing outsourced services under long‑term contract.
- Master Services Agreement (MSA): Umbrella contract governing multiple SOWs.
- Milestone Billing: Invoice when specific milestones are completed.
- Negotiated Discount: Custom discount agreed upon in contract negotiations
- Onshore/Offshore Mix: Split between local and offshore resources.
- Outcome-Based Fee: Fee tied to achieving agreed outcomes.
- Over-Under Billings: Difference between revenue recognized and billed.
- Overtime Premium: Higher rate for hours beyond standard time.
- PSA (Professional Services Automation): Software to manage projects, resources, and billing.
- Pass-Through Costs: Expenses billed to the client at cost.
- Price Fences: Rules to offer different prices to different groups (e.g., student discounts, volume, channel, timing) based on their WTP. Thereby maximizing revenue from different segments
- Priority Fee: Extra charge for urgent work.
- Project Margin: Project profit: revenue minus direct costs.
- Ramp-Up: Period when resources spin up and productivity rises.
- Rate Card: List of billing rates by role/service.
- Rate Realization: Extent to which actual billing matches standard rates.
- Realization Rate (Services): Fees collected vs. standard billable amount.
- Resource Pyramid: Mix of junior/mid/senior staffing on a project.
- Retainer: Prepaid fee that secures access to services.
- Revenue per Head: Revenue divided by number of employees.
- Rush Fee: Extra fee for expedited turnaround.
- SLA Penalty: Penalty when agreed service levels are missed.
- SOW Change Control: Process to manage changes to a Statement of Work.
- Scope Creep: Unapproved expansion of scope.
- Service Catalog: Structured list of services offered with standard terms.
- Service Level Credit: Credit provided when service levels are missed.
- Service SKU: Unique identifier for a defined service offering.
- Show-Up Rate: In services or bookings: percent of scheduled customers who actually arrive
- Subcontractor Margin: Profit after paying subcontractors.
- Time & Materials (T&M): Bill for actual hours and expenses.
- Time Rounding Policy: Rules for rounding logged time (e.g., 15‑minute blocks).
- Transition Services: Temporary services to support a transition or cutover.
- Travel & Expense Policy: Rules for incurring and reimbursing travel.
- Utilization Target: Expected billable utilization for roles/teams.
- WIP (Work in Progress): Value of work done but not yet invoiced.
- Warranty Support: Included support for a limited time post‑delivery.
- Weekend Premium: Higher rates for weekend work.
- Write-Offs / Write-Downs: Reductions to billed revenue after disputes or adjustments.
Consumer Goods
- ACV Distribution: Percent of total store sales represented by stores that carry the product.
- Authorized SKU List: Retailer‑approved list of products that may be carried.
- Base vs Incremental Volume: Base is normal sales; incremental is promo‑driven lift.
- Bid-ask Spread: Difference between the buy and sell price (in marketplace / exchange)
- Bill-Back Allowance: Post‑event payment from supplier to retailer to fund promotion.
- Buy Rate: Average amount purchased per buying household.
- Buyer Conversion: Percent of shoppers who buy after consideration.
- Case Allowance: Discount per case purchased by the retailer/distributor.
- Case Cost: Supplier’s trade price or cost per case.
- Case Pack: Number of units inside one case.
- Category Captaincy: When a supplier leads category planning for a retailer.
- Category Share: Brand’s percent of total category sales.
- Channel Pricing: Adjusting pricing based on the distribution channel (e.g., direct-to-consumer vs. wholesale vs. e-commerce).
- Clip Strip: Hanging strip used to display small items near shelves.
- Co-op Advertising: Brand and retailer share the cost of advertising to boost sales.
- Competitive (Market) Pricing: Set prices with your competitors in mind so you stay attractive while protecting profit.
- DC Allowance: Discount to a distribution center for handling product.
- Deduction Management: Process to resolve retailer deductions/chargebacks.
- Delisting Fee: Fee applied when a product is removed from a channel or SKU list
- Digital Coupon: App/online coupon applied at checkout.
- Display Only: In‑store display without a price discount.
- Double Marginalization: When multiple layers in a value chain (manufacturer + distributor) add markups, leading to higher end-customer prices and reduced demand.
- EDI 852/867: POS/inventory (852) and product movement (867) Electronic Data Interchange (EDI) reports.
- EDLP (Everyday Low Price): Keep prices consistently low and run fewer promotions. Builds trust and reduces promo dependence.
- Endcap: Display at the end of an aisle; high visibility.
- Everyday Price: Regular shelf price without promo.
- FSI (Free-Standing Insert): Printed coupon in newspapers/magazines.
- Facings: Number of product units shown on the shelf front.
- Fare class segmentation: Price tiers in airlines/hotels to balance utilization and revenue.
- Feature Only: Promoted in ads but no in‑store display.
- Flash Sale: Limited period discounting event to drive demand
- Hedonic Pricing: Pricing based on product attributes (e.g. features, quality)
- High-Low Pricing: Keep regular prices higher, then run big promotions to spike traffic and sales.
- Household Penetration: Percent of households that bought in a period.
- Inner Pack: Smaller pack inside a case.
- Lift Curve / Response Curve: The relationship between discount depth and incremental volume; used to pick profit-optimal promo depth.
- Load Factor: Percentage of available capacity (seats, rooms) sold.
- Loyalty Load-to-Card: Digital coupon loaded to a shopper’s loyalty account.
- Loyalty Program Lift: Incremental revenue from loyalty program members vs non-members
- MAP Holiday: Temporary suspension of MAP rules.
- MSRP (Manufacturer’s Suggested Retail Price): The price recommended by a manufacturer for resale of its product.
- Manufacturer Suggested Retail Price (MSRP): the price a manufacturer recommends a product, like a car or appliance, be sold for at the retail level.
- Markdown / Clearance: A planned price cut to move inventory while protecting as much margin as possible.
- Market Depth: Volume available at differing price levels in a market
- Master Carton: Outer shipping carton that may contain case packs.
- Minimum Advertised Price (MAP): Set by a manufacturer or brand that determines the lowest price a retailer can advertise a specific product
- Mix / Mix Shift: Changes in product, channel, or customer composition that affect average price and margins independent of list price.
- Mix Management: Deciding which products / services to emphasize, which margins to push, how to structure offerings
- Net Revenue Retention (NRR): Revenue retained from existing customers.
- New Item Authorization: Retail approval to add a new product.
- OOS (Out of Stock): Product unavailable on the shelf.
- Offshore Brand: A brand manufactured abroad (often in lower-cost regions) and marketed in domestic markets.
- Omnichannel Pricing: Pricing that works across store, web, and marketplace without confusing customers or hurting profit.
- PDQ Display: Pre‑packed display that is fast to set up.
- POS: Point‑of‑sale
- POS Feed: Point‑of‑sale data shared by retailers.
- Panel Data: Household panel data on purchases.
- Penetration Rate: Percent of potential market or base that is captured
- Planogram: Diagram showing where products sit on the shelf.
- Price Dispersion: Variation in prices for the same product across sellers or markets.
- Price Gap: Difference between two prices (e.g., brand vs private label).
- Price Matching Guarantee: Policy to match competitor’s lower price
- Price Parity / Price Matching: Keeping the same price across channels or matching competitor prices to stay credible.
- Private Label Gap: Price gap between branded and retailer private label.
- Promo Uplift & Incrementality: The true gain from a promotion after subtracting baseline sales and stockpiling; key to trade ROI.
- Promotional Cliffs: Sudden volume drop after promotion ends
- Repeat Rate: Percent of households buying more than once.
- Retail Syndicated Data: Third‑party retail sales data (e.g., Nielsen, IRI).
- Revenue Growth Management (RGM): A structured way to grow sales and profit using pricing, promotions, product mix, and pack sizes – often with help from a pricing consulting partner.
- Scan Price: Price recorded at checkout.
- Scan Promotion: Promotion executed and tracked at POS.
- Share of Requirements: Share of a household’s category purchases going to one brand.
- Shelf Price: Displayed shelf price.
- Shrink: Inventory lost to theft, damage, or error.
- Temporary Price Reduction (TPR): Short‑term on‑shelf price cut.
- Total Distribution Points (TDP): Weighted measure of distribution breadth and depth.
- Trial Rate: Percent of households purchasing at least once.
- Velocity per Store: Average sales per store carrying the item.
- Volume Kickback: Additional discount or rebate when volume target is exceeded
Life Sciences
- 340B (US Healthcare): Program allowing eligible entities to buy at discounted prices.
- 340B Ceiling Price: Maximum price 340B entities should pay.
- Adherence: Patients taking medication as prescribed over time.
- Average Selling Price (ASP): Average net selling price after discounts and rebates.
- Best Price (Medicaid): Lowest price given to any buyer, used in Medicaid rebates.
- Buy-and-Bill: Provider buys drug, administers it, then bills payer.
- Chargeback (Pharma): Wholesaler reimbursed when selling below WAC due to contract.
- Co-Pay Card: Manufacturer assistance that reduces patient co‑pay.
- Compliance Fee: Fee paid to distributors for compliance services.
- DRG: Diagnosis‑Related Group; hospital payment classification.
- DSA (Distribution Service Agreement): Contract for distribution services/fees.
- Fair Market Value (FMV): Reasonable market‑based rate for services/fees.
- Fair Pricing Compliance: Ensuring pricing aligns with competition law, anti-discrimination rules, and contractual obligations.
- Formulary Tier: Coverage level that affects patient cost share.
- Free Goods: Product provided at no charge under certain programs.
- GPO (Group Purchasing Organization): Entity that negotiates prices for member providers.
- Gross-to-Net (GTN): Deductions from list to arrive at net revenue (rebates, chargebacks).
- HCPCS: Healthcare Common Procedure Coding System; billing codes.
- Health Economics and Outcomes Research (HEOR): Multidisciplinary field that evaluates the economic and humanistic value of healthcare interventions
- Health Technology Assessment (HTA): National or regional health value assessment.
- Hub Services: Centralized patient support services.
- IDN (Integrated Delivery Network): Provider network integrating care delivery.
- Indication-Based Pricing: Price varies by approved disease indication.
- Institute for Clinical and Economic Review (ICER): Independent non-profit research organization focused on drug value and cost-effectiveness, or the Incremental Cost-Effectiveness Ratio
- International Reference Pricing (IRP): Use other countries’ prices as benchmarks.
- Inventory Service Fee: Fee paid for inventory management services.
- J-Code: Reimbursement code for drugs administered by providers.
- Launch Sequence: Order of country or channel launch to optimize price and access.
- Medicare Part B: Covers provider‑administered drugs.
- Medicare Part D: Covers retail pharmacy drugs.
- NDC: National Drug Code; unique product identifier in the US.
- Outcome-Based Contract (Payer): Payment tied to patient outcomes.
- Parallel Trade: Buying in low‑price markets and reselling in high‑price ones.
- Patient Assistance Program: Support for patients with affordability issues.
- Patient Journey Mapping: Understanding steps a patient takes through care.
- Payer Mix: Composition of payers (e.g., Medicare, commercial).
- Persistence: Duration patients continue therapy.
- Prior Authorization: Payer approval required before coverage.
- Quality‑Adjusted Life Year (QALY): Health economic measure that combines the quantity and quality of life into a single metric, used to assess the cost-effectiveness of medical interventions
- Rebate Safe Harbor: Legal protection for certain rebate structures.
- Reimbursement Rate: Amount a payer reimburses for a product/service.
- Sample Allowance: Free samples given to prescribers.
- Specialty Pharmacy: Pharmacy focused on high‑cost, complex therapies.
- Step Therapy: Payer requires lower‑cost therapy before higher‑cost.
- Step-Down Pricing: Lowering price as competition increases or volume grows.
- Sunshine Act: US law requiring reporting of payments to physicians.
- Switch Rate: Rate at which patients move to another therapy.
- Tender Pricing (Hospitals): Competitive bidding for hospital supply contracts.
- Value Dossier: Evidence package supporting product value.
- WAC: Wholesale Acquisition Cost; manufacturer’s list price to wholesalers.
- WAC to ASP Spread: Difference between list (WAC) and average net (ASP).
- Wholesaler Fee: Fee paid to wholesalers for distribution services.
Manufacturing & Distribution
- Aged Inventory: Stock that has been on hand too long.
- Alloy Surcharge: Extra charge based on alloy input costs.
- Backorder: Order that cannot be filled now and is queued for later shipment.
- Bid Price Optimization: The practice of setting bids at the point where win probability and profit margin best align.
- Bracket Pricing: Price breaks for larger quantities.
- Contract Pricing: Prices fixed by contract terms.
- Core Charge: Deposit/fee refunded when core is returned (e.g., auto parts).
- Cost-Plus Matrix: Matrix that sets price as cost plus a margin.
- Cost-Plus Pricing: Add a markup to your cost. Simple to run, but can miss higher prices customers would happily pay.
- Counter Sales: Walk‑in retail sales at a branch counter.
- Credit Hold: Order stop due to overdue balance or risk.
- Cross-Dock: Move goods through a Distribution Center without long storage.
- Customer-Specific Pricing (CSP): Contracted prices tailored to a customer.
- Cut-to-Length: Custom cut materials to specified length.
- Dead Stock: Inventory with no demand.
- Deviation: Authorized discount that deviates from the standard price.
- Drop Ship: Supplier ships directly to customer for distributor.
- Economic Order Quantity (EOQ): Optimal order size to minimize combined ordering + holding cost
- Fill/Kill: Ship what is available and cancel the rest.
- Freight Class: Standard that sets freight pricing by commodity.
- Freight Prepay/Add: Vendor prepays freight and adds cost to invoice.
- Fuel Surcharge Index: Index used to calculate fuel surcharges.
- Gross Margin Return on Inventory Investment (GMROII): retail KPI that measures how effectively a company generates profit from its inventory
- Hazmat Fee: Hazardous material handling surcharge.
- Inside Sales: Sales handled remotely by reps.
- Inventory Carrying Cost: Cost of holding inventory (storage, obsolescence)
- Job Pricing: Quote pricing for custom jobs/projects.
- Kitting: Assemble components into ready‑to‑ship kits.
- List-Discount-Net (LDN): Pricing structure that moves from list price to discounts to net price.
- MDF (Market Development Funds): Funds manufacturers give retailers to promote products (ads, endcaps, email blasts).
- MOQ/MPQ: Minimum order or pack quantity.
- Matrix Override: Manual change to a system‑calculated price.
- Mill Increase: Supplier‑announced base price increase (e.g., metals).
- Obsolete Inventory: Stock unlikely to sell due to age/spec change.
- Order Minimum: Minimum order size to process.
- Outside Sales: Field sales team handling accounts on site.
- Parcel Surcharge: Extra fees charged by parcel carriers.
- Pass-Through: How much of a cost increase you can successfully pass to customers via price.
- Pass-Through Pricing: Adjusting prices along the value chain to reflect input cost changes (e.g., raw materials or FX fluctuations).
- Pick-Pack-Ship: Warehouse order fulfillment steps.
- Price Exception: Approval for a price outside policy.
- Price Matrix: Grid of prices by customer/segment/product.
- Price Rounder: Rule that rounds calculated prices to clean endings.
- Quote-to-Cash: Process from quote creation to payment received.
- Restocking Charge: Fee for returned goods to cover handling costs.
- Scrap Credit: Credit for returned scrap materials.
- Setup Charge: Fee for machine or process setup.
- Ship-and-Debit (Distribution): Post‑sale credit to distributor when selling under contract price.
- Special Pricing Agreements (SPAs): Agreements providing special prices to targeted deals.
- Tariff Pricing: Pricing that reflects import/export duties, FX, and trade policy; essential for global manufacturers and distributors.
- Tooling Charge: Fee to create or maintain custom tooling.
- Transfer Pricing: The practice of setting prices for goods and services exchanged between entities within the same organization, often for tax compliance and profitability analysis.
- Truckload vs LTL: Full truck vs less‑than‑truckload shipment.
- Turns & Earns: Measure of inventory turns and gross margin dollars.
- Versioning: Offering slightly different versions of a product at different price / feature points
- Will Call: Customer picks up order at the facility.
- Zone Pricing: Different prices by geographic zones.
Private Equity
- Add-On Strategy: Acquire smaller businesses to build scale.
- Bank Case: Management‑approved plan shared with lenders.
- Board Pack: Recurring board materials summarizing performance.
- Bridge to Business Plan: Walk from historicals to the plan.
- Buy-and-Build: Acquire, integrate, and grow via roll‑ups.
- Carve-Out: Separation of a business unit from a parent company.
- Channel Expansion Case: Enter new channels to grow sales.
- Commercial Due Diligence (CDD): Assess market size, structure, and competitiveness.
- EBITDA Margin: EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) as a percent of revenue.
- Earnings Before Interest, Taxes, Depreciation, Amortization (EBITDA): Earnings Before Interest, Taxes, Depreciation, and Amortization; financial metric used to measure a company’s operating performance
- Equity Story: Clear narrative for why the asset will create value.
- Exit Readiness: Prepare reporting and operations for sale.
- Go-to-Market Diligence: Assess sales model, coverage, and conversion.
- Integration Playbook: Standard steps to integrate an acquisition.
- International Expansion Case: Enter or grow in new geographies.
- KPI Tree: Linked set of metrics that ladder up to goals.
- Mergers and Acquisitions (M&A): Business transactions where one or more companies combine, either by creating a new entity or one company absorbing another
- Mix Upgrade Case: Shift mix to higher‑margin products/customers.
- Net Working Capital: Current assets minus current liabilities excluding cash
- Objectives and key results (OKR) Cascade: Strategy that involves aligning the goals of different teams and individuals in an organization with the company’s overall strategic objectives
- Operational Turnaround: Actions to restore performance of underperforming assets.
- Price Uplift Case: Business case for raising prices to increase margin.
- Pricing Due Diligence (PDD): Assess price strength and risk in M&A or private equity deals to size value-creation upside.
- Pricing Operating Model: Org, processes, and tools to run pricing well.
- Pricing PMO: Program office to coordinate pricing initiatives.
- Procurement Savings Case: Cut input costs through sourcing and negotiation.
- Roll-Up: Combine multiple smaller firms into a larger platform.
- SKU Rationalization Case: Reduce low‑value SKUs to improve margin and focus.
- Salesforce Effectiveness Case: Improve conversion, coverage, and quota attainment.
- Stranded Costs: Overheads left behind after carve‑out.
- Tech Enablement Case: Use systems/data to improve operations.
- Vendor DD: Due diligence done by the seller for buyers.
- Working Capital Play: Free up cash by improving collections/inventory/payables.
SaaS
- API Metering: Tracking usage for billing (e.g., calls, GB).
- ARPU Growth: Growth in average revenue per user/account over time
- Affiliate Commission: Fee paid to affiliates for referred sales.
- Annual Recurring Revenue (ARR): Annualized subscription revenue.
- Annual vs Monthly Billing: Billing frequency options with different discounts.
- App Store Take Rate: Platform’s revenue share of transactions.
- Audit Log Add-on: Paid add‑on for audit logging.
- Average Revenue per User (ARPU): Average revenue generated per customer/user over a period.
- Backup/DR Surcharge: Fee for backup and disaster recovery services.
- Beta Pricing: Special pricing for early testers.
- Bundle Builder: Tool to configure custom bundles.
- Bundling / Unbundling: Sell items together for one price (bundle) or split them apart to match different budgets. Learn more about bundling in SaaS.
- Business-As-Usual (BAU): the normal execution of standard functional operations within an organisation
- CAC Ratio: Ratio of CAC to revenue or growth, measure of acquisition efficiency
- Churn / Retention rate: The rate at which customers leave or stay; directly impacts LTV and pricing power.
- Committed Use Discount: Discount given for committing to usage or volume over term
- Cross-Sell Offer: Offer encouraging purchase of related products.
- Customer Acquisition Cost (CAC): Total cost to acquire a new customer
- Customer Lifetime Value (CLV): Predicted net revenue from a customer over their relationship.
- Data Overage: Charge for exceeding data limits.
- Early Access Discount: Discount for joining early access.
- Enterprise SKU: Package tailored to large enterprises.
- Entitlement Matrix: Which features are included in each plan.
- Fair Use Policy: Rules limiting overuse on flat‑rate plans.
- Feature Flags: Switches that control access to features.
- Hybrid Plan: Combination of seat and usage pricing.
- Implementation Fee: One‑time fee to set up the customer.
- Invoicing vs In-App Purchase: Pay by invoice or via an app store flow.
- Legacy Price Protection: Keep older customers on legacy pricing.
- Marketplace: Online store where third‑party apps are sold.
- Marketplace Listing Fee: Charge for listing in a marketplace.
- Monetization Strategy: The blueprint for how value becomes revenue—tiers, meters, bundles, and commercial policies tied to ICPs.
- Monthly Recurring Revenue (MRR): Subscription revenue standardized monthly.
- Multi-Product Discount: Discount for buying multiple products.
- Net Retention: Measure of revenue expansion + contraction from existing customers
- Net Revenue Retention (NRR): Revenue from existing customers after churn, downgrades, and expansions; links pricing to customer success.
- Overage Policy: How extra usage beyond plan is billed.
- Pay-as-You-Go: Usage model where customers pay per unit of consumption
- Payment Rails: Payment methods and processors used.
- Platform Fee: Base fee for platform access.
- Premium Support: Higher‑touch support tier.
- Prepay Discount: Lower price for paying in advance.
- Price Grandfathering: Honor old pricing for existing customers.
- Price Localization (FX): Local currency pricing and rounding rules.
- Price Testing (A/B / Multivariate): Running controlled price experiments online or in-store to measure uplift, margin impact, and elasticity.
- Professional Services Pack: Pre‑scoped services bundle.
- Ramp Pricing: Pricing that steps up as usage or value grows.
- Rate Limiting: Control over how fast APIs can be called.
- Reseller Discount: Discount given to resellers for resale.
- Revenue Management as a Service: Ongoing support where a specialist team (like Revenue ML) monitors, tests, and tunes pricing and promos each month.
- SLA Uptime Credit: Credit if uptime falls below commitment.
- Sandbox Access: Non‑production environment access.
- Seat True-Up: Periodic alignment of seats used vs purchased.
- Seat-Based Plan: Price per user or seat.
- Solution Package: Pre‑bundled modules around a use case.
- Success Plan: Ongoing plan to ensure customer outcomes.
- Tiered Pricing / Good-Better-Best: Multiple versions at different prices so customers can trade up.
- Unit Economics (ARPU, LTV): Customer-level profitability metrics—Average Revenue per User, Lifetime Value, Customer Acquisition Cost—to guide monetization strategy.
- Usage-Based Plan: Price based on consumption (e.g., API calls).
- Usage-Based Pricing: Monetization tied to consumption (API calls, seats, GB); often paired with tiered pricing and overage.
