CCM Pricing Strategy & Revenue Management Flashcards
6 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CCM Pricing Strategy & Revenue Management flashcards as text
What does 'Customer Lifetime Value' (CLV) measure in revenue management?
Answer: The net present value of all future revenue expected from a customer relationship
CLV quantifies the total discounted profit a company expects to earn from a customer over the entire duration of the relationship.
Which pricing model charges customers a recurring fee, typically monthly or annually, for continuous access to a product or service?
Answer: Subscription pricing
Subscription pricing generates predictable recurring revenue and can be optimized through tiered plans, trials, and renewal incentives.
A commercial manager observes that a competitor has significantly undercut their price. What is the FIRST step before deciding on a response?
Answer: Analyze whether the competitor's lower price is sustainable and how customers are responding
Understanding whether a competitor's price undercut is sustainable and if it is actually shifting customer behavior prevents unnecessary margin erosion from reactive discounting.
What is 'yield management' primarily designed to achieve in revenue optimization?
Answer: Selling the right capacity to the right customer at the right price and time to maximize revenue
Yield management uses variable pricing and capacity controls to maximize revenue from a fixed or perishable inventory, common in hospitality and transportation.
Which financial metric is commonly used alongside CLV to assess the efficiency of customer acquisition spending?
Answer: Customer Acquisition Cost (CAC)
The CLV-to-CAC ratio indicates whether the lifetime value generated from a customer justifies the cost of acquiring them, with a ratio of 3:1 or higher typically considered healthy.
In revenue management, what does 'price realization' refer to?
Answer: The actual average price received after all discounts and concessions are applied
Price realization is the effective price the seller actually collects, often lower than list price due to discounts, rebates, and credits applied during the sale.