Revenue Design — the glossary
All 88 terms from the book’s appendix, defined exactly as the volume uses them. Published in full.
- Acceptance rule
- The criteria and process used when customer approval is required to complete a deliverable or milestone.
- Activation milestone
- The earliest observable event showing that a customer can use the offer's central promise.
- Add-on
- A separately priced extension with its own right, price input, and delivery consequence.
- Approved exception
- A recorded, authorized departure from an ordinary rule for a named customer and limited reason.
- Assumed
- A confidence label for a plausible material claim that still requires a pilot or later evidence.
- Assumption
- A proposition that remains to be tested.
- Billing unit
- The quantity and period represented on an invoice.
- Cancellation
- A permitted end to a future renewal or current commitment under the signed terms.
- Capacity check
- A comparison of promised work for a period with the qualified resources available to perform it.
- Cash schedule
- A view of when the company expects to collect money and pay the costs created by the offer.
- Change order
- A recorded amendment that states revised work, price, timing, rights, and approval.
- Cohort
- A group of customers or transactions sharing a relevant start period, offer version, or operating condition.
- Commercial release
- Dated permission to sell a named offer version to a stated customer group within declared volume, geography, capacity, and review limits.
- Completion rule
- The observable evidence required to mark included work complete.
- Contract mechanics
- The commercial events and responsibilities a customer agreement must express, including start, term, rights, payment, change, and end.
- Contribution amount
- The declared amount basis minus the variable and directly attributable costs selected for a management decision.
- Contribution margin percentage
- Contribution amount divided by the same declared amount basis.
- Corroborated
- A confidence label for a claim supported by more than one independent source but not yet tested in the full offer.
- Cost of revenue
- The cost category Finance uses for delivering sold products or services under the company's accounting policy.
- Current alternative
- What the customer does now, including delay or no action, and the limitations of that choice.
- Customer prerequisite
- Information, access, equipment, approval, staffing, or a decision the customer must provide for delivery to proceed.
- Customer problem
- The undesirable operating condition a buyer is trying to change.
- Customer relationship management record
- The working sales record for the account, contact, proposed offer, quantity, stage, and decision history.
- Customer-Problem Brief
- A one-page record of the customer context, observable problem, consequence, evidence, and eligibility boundaries.
- Customer-value unit
- The observable result or useful change the customer cares about.
- Dashboard
- A compact review view that places selected measures, comparison points, and exceptions together.
- Decision
- A chosen rule together with the authority to revise it.
- Definition window
- The period during which decision-bearing terms, counting rules, and populations remain on one effective version for comparison.
- Delivery boundary
- The line between included work and work requiring a new decision.
- Delivery unit
- The quantity that creates work, capacity demand, or cost.
- Design approval
- The internal decision that an offer's promise, economics, capacity, evidence, and specialist limits are coherent enough to proceed to implementation testing.
- Directly attributable cost
- A cost connected to a specific offer or customer even when it does not vary perfectly.
- Discount
- A reduction from the amount produced by the published price rule.
- Eligibility criteria
- Observable conditions a customer must meet to use the ordinary path.
- Entitlement
- A customer's usable right under the offer, such as a visit, access, transaction quantity, response, or deliverable.
- Entitlement unit
- The quantity the customer has the right to use or receive.
- Estimate
- A calculated expectation whose inputs are stated.
- Exception
- A proposed departure from a published customer, package, price, contract, or delivery rule.
- Exception register
- The searchable record of approved, rejected, and expired departures that change price, rights, work, risk, timing, or implementation.
- Exclusion
- A condition or work category the offer does not cover, with the next permitted action stated when useful.
- Fact
- A claim supported by an identifiable record or observation.
- Gross margin amount
- Recognized revenue minus the costs classified as cost of revenue.
- Gross margin percentage
- Gross margin amount divided by the same recognized-revenue basis.
- Hybrid model
- A structure that combines two or more components while keeping each component traceable.
- Individual departure
- A recorded change to one transaction for a limited period that does not alter the published offer version.
- Intended customer
- The buyer and operating situation for which the offer is deliberately built.
- Key performance indicator (KPI)
- A selected metric tied to a named business decision.
- Lagging indicator
- A result recorded after it occurs.
- Leading indicator
- An earlier condition that may help anticipate a later result without proving causality.
- Limit
- The stated boundary of a customer's usable right.
- Metric
- A consistently calculated quantity used to observe a condition.
- Observed
- A confidence label for a claim supported by a direct record, behavior, or completed transaction.
- Offer
- The complete commercial promise, including what the customer buys, pays, may use, receives, and may change or end.
- Offer Spec
- The primary internal record that reconciles the offer's customer, package, price, rights, delivery, economics, authority, and release rules.
- Offer version
- A dated set of offer rules that can be distinguished from earlier or later sets.
- One-time model
- A structure in which a discrete order, transfer, or bounded project creates the charge and right.
- Ordinary path
- A sale that follows the published package, price, contract, and delivery rules.
- Package
- A named, bounded combination of rights, quantities, customer duties, and exclusions.
- Payback period
- The time required for cumulative contribution to recover a stated upfront acquisition or implementation cost.
- Pilot
- A limited release used to test named assumptions before broad sale.
- Price amount
- The result produced by a price rule for one case.
- Price book
- The current internal record of packages, price rules, add-ons, effective dates, and standard commercial conditions.
- Price bundling
- Selling otherwise separate products together at a package price.
- Price rule
- A written calculation that converts observable facts into the amount charged.
- Pricing unit
- The quantity or condition that changes the charge.
- Product bundling
- Integrating components into one combined offering.
- Proration
- A proportional charge or credit for a partial period under a stated denominator.
- Proxy
- A measurable substitute used when the desired result cannot be priced or observed directly enough.
- Realized price
- The amount retained after discounts, credits, and concessions for a measured sale.
- Record correction
- An implementation fix that does not change the customer promise.
- Release
- Dated permission to sell a named offer version to a stated customer group within stated limits.
- Release candidate
- A named offer version whose working records and transaction tests are complete enough for the bounded commercial-release decision.
- Renewal
- A new or continuing commitment after the current term.
- Retainer model
- A structure that reserves access, response capacity, or a block of work for a period.
- Revenue model
- The rules that determine how a customer's charge and usable rights begin, continue, change, renew, and end.
- Rule revision
- A change to eligibility, package, price, term, rights, delivery, or authority that requires a new offer version.
- Scenario
- A coherent set of assumptions used to test a decision under different conditions.
- Sensitivity test
- A test that changes one input while holding the others constant.
- Subscription model
- A structure that grants a continuing right or recurring service for a stated period.
- Threshold
- The quantity or condition at which a different package, price, or review applies.
- Tier
- One of several packages distinguished by a meaningful increase in rights, service level, or customer scope.
- Transaction test
- A rehearsal that traces an ordinary, boundary, change, exception, or failure case through quote, agreement, billing, entitlement, delivery, evidence, and correction records.
- True-up
- Reconciliation of a committed or billed quantity to the eligible actual.
- Unit
- The countable basis used for one commercial decision.
- Unit economics
- Analysis of one declared amount basis and selected costs for a stated unit and period.
- Unit Map
- The five measures with their counting rules, periods, sources, and owners.
- Usage-based model
- A charge calculated partly or wholly from measured consumption.
- Variable cost
- A cost that changes with the quantity or activity being sold.