1. What is CPM Calculation?

CPM (Cents Per Mile/Point) calculation helps determine the value of reward points or miles by comparing the cash price of an item to the number of points required. This metric is essential for maximizing the value of reward programs.

2. How Does the Calculator Work?

The calculator uses the CPM formula:

Where:

• Cash Price — The dollar amount of the purchase
• Points — The number of points/miles required

Explanation: The formula calculates how many cents each point/mile is worth when redeemed for a specific purchase.

3. Importance of CPM Calculation

Details: Calculating CPM helps reward program members make informed decisions about when to use points versus cash, ensuring they get maximum value from their rewards.

4. Using the Calculator

Tips: Enter the cash price in dollars and the number of points required. Both values must be positive numbers greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is a good CPM value?
A: Generally, a CPM of 1.0 cent or higher is considered good value. Values below 0.7 cents may indicate poor redemption value.

Q2: How does CPM compare across different reward programs?
A: Different programs have different baseline values. Airline miles typically range from 1-2 cents, while credit card points vary more widely.

Q3: Should I always choose the option with the lowest CPM?
A: Not necessarily. Consider your points balance, expiration dates, and alternative redemption options before making a decision.

Q4: Does CPM calculation work for all types of rewards?
A: Yes, the CPM calculation can be applied to any reward program where you can compare cash price to points required.

Q5: How often should I calculate CPM?
A: Calculate CPM for each major redemption opportunity, as values can vary significantly between different purchases and redemption options.