Anyone who does ecommerce marketing can have better success promoting and boosting sales with a full understanding of the terms associated with the business. Here’s a list of some of the most commonly used terms that you can use when communicating with customers, suppliers, team members, and business partners.
A/B Testing - a method of comparing two versions of a web page or app to see which one performs better in terms of a specific goal, such as conversion rate. Tests are conducted randomly using different variables for analyzing the best approach to higher sales conversions.
Affiliate Manager: An affiliate manager is a person or team responsible for managing and overseeing an affiliate program. Their role includes recruiting new affiliates, managing existing relationships, and providing support and guidance to help affiliates succeed.
Affiliate Marketing: Affiliate marketing is a strategy that involves a business cooperating with online publishers to endorse products and send customers to the ecommerce store. Affiliate publishers receive a commission for visitors or sales generated from the promotion.
Affiliate Networks: Affiliate networks are platforms that connect businesses (advertisers) with affiliates, who are individuals or companies that promote the advertiser's products or services in exchange for a commission. The affiliate network acts as the intermediary between the advertiser and the affiliate, managing the tracking, reporting, and payment of commissions. This allows advertisers to reach a larger audience and allows affiliates to earn money by promoting products or services they believe in.
Affiliate Program: An affiliate program is a type of performance-based marketing in which a business (referred to as the "merchant" or "advertiser") rewards its affiliates (also known as "publishers" or "partners") for each customer brought about by the affiliate's own marketing efforts.
Analytics: The process of measuring and analyzing data to inform marketing decisions.
AOV (Average Order Value): AOV is a sales metric derived from the formula of total business revenue divided by the number of individual customers.
Attribution: Attribution allows marketers to understand which touchpoints (i.e. ads, email, website) are most effective in driving conversions and to allocate their budget and resources accordingly. There are several attribution models that can be used to assign value to different touchpoints.
B2B (Business-to-Business): B2B can refer to brands or a marketing strategy aimed at selling products and services to other businesses.
B2C (Business-to-Consumer): B2C brands like retail stores, subscription services, and dealerships are targeted at delivering products directly to everyday consumers.
Big Data: Big data refers to extremely large and complex data sets that are difficult to process using traditional data processing tools. It includes structured data, semi-structured data, and unstructured data such as text, images, audio, and video. The volume, variety, and velocity of big data make it challenging to store, manage, and analyze.
CAC: CAC stands for "customer acquisition cost." It is a metric that measures the cost a business incurs to acquire a new customer. It is calculated by dividing the total cost of sales and marketing efforts by the number of new customers acquired during that period.
Cart Abandonment: This is when a customer adds items to their online shopping cart but then leaves the website without completing the purchase
Churn Rate: Churn rate, also known as customer attrition rate, is a metric that measures the rate at which customers stop doing business with a company. It is typically expressed as a percentage of the total number of customers at the beginning of a period.
Content Marketing: A strategy that involves creating and distributing valuable, relevant, and consistent content to attract and engage an audience, and ultimately drive profitable customer action.
Conversion: a conversion refers to a specific action taken by a customer as a result of being referred by an affiliate. This action is typically a sale or a lead, but it can also refer to other desired actions such as signing up for a newsletter or filling out a form.
Conversion Rate: The percentage of website visitors who take a desired action, such as making a purchase or filling out a form.
CPA: CPA stands for "cost per action" and it is a pricing model used in affiliate marketing where the advertiser pays a commission to the affiliate for each specific action taken by a customer, such as a sale, lead or sign-up. CPA is also known as "pay per action" or "PPA" for short.
CPC: CPC stands for "cost per click" and it is a pricing model used in online advertising where the advertiser pays a fee each time one of their ads is clicked. In the CPC model, the advertiser pays for each click on their ad regardless of whether that click leads to a sale or not.
CPG: CPG stands for "consumer packaged goods." It refers to physical goods that are sold to consumers for personal or household use. These are the products that consumers typically purchase regularly, such as food, beverages, cleaning supplies, personal care products, and over-the-counter drugs.
CRM (customer relationship management): A strategy and technology used to manage and analyze interactions with current and potential customers.
CRO (Conversion Rate Optimization): - the process of increasing the percentage of website visitors who complete a desired action, such as making a purchase.
Cross-selling: Cross-selling refers to promoting similar or complementary products to customers who have already made a purchase.
CTA (Call-to-Action): A button or link on a website that encourages a user to take a specific action, such as making a purchase or signing up for a newsletter.
CTR (Click-Through Rate): This is a metric that measures the number of clicks a specific link or call-to-action (CTA) receives divided by the number of times it is viewed or served. It is commonly used to measure the effectiveness of online advertising and email marketing campaigns. It is typically expressed as a percentage.
Customer Relationship Management (CRM): the process of managing interactions and relationships with customers, including tracking customer data and sales history.
Customer Retention: Customer retention refers to the ability of a business to keep its existing customers engaged and coming back for more. It is the process of maintaining a long-term relationship with customers to ensure they continue to do business with the company.
Cybersecurity: Measures taken to protect a website or app from unauthorized access, hacking, and other cyber threats.
Digital Wallet: A digital version of a physical wallet that stores credit card, debit card, and other payment information.
Diversified Approach: A marketing strategy that uses a combination of different channels and tactics to reach customers.
DNVB: DNVB stands for "digital native vertical brand." It refers to a company that was founded and operates primarily online, and sells a specific product or service within a specific vertical market.
Dropshipping: a method of ecommerce in which a business does not keep products in stock, but instead transfers customer orders and shipment details to a supplier or manufacturer who then ships the product directly to the customer.
Email Marketing: A strategy that involves sending targeted messages to customers through email.
Fraud Detection: The process of identifying and preventing fraudulent activities such as unauthorized transactions and identity theft.
Fulfillment: the process of storing, packaging, and shipping products to customers.
GMV: GMV stands for "Gross Merchandise Volume." It is a metric that measures the total value of goods sold through a platform or marketplace during a certain period of time. It is calculated by taking the total revenue generated by the platform and subtracting any discounts, returns, or other adjustments.
Influencer Marketing: The process of working with online personalities, known as influencers, to promote a brand or product.
Inventory Management: the process of tracking and managing a business's inventory, including monitoring stock levels and reordering products as needed.
KPI (Key Performance Indicator): a metric used to measure the performance of a business or specific aspect of a business, such as website traffic or sales.
Landing Page: A single web page on a website where a visitor arrives after clicking a link from an email or elsewhere online.
Lead: A lead is a potential customer who has shown interest in a company's products or services. In the context of online marketing, a lead typically refers to a person who has provided their contact information, such as their name, email address, or phone number, in response to an advertisement or marketing campaign.
Lifetime Customer Value (LCV): Lifetime customer value is a metric that estimates the total value a customer will bring to a business over their lifetime as a customer. It is calculated by multiplying the average purchase value by the number of purchases a customer is expected to make over their lifetime, and subtracting the costs associated with acquiring and servicing that customer.
Logistics: The process of planning, implementing, and controlling the movement and storage of goods, services, and related information from their point of origin to the point of consumption.
LTV: LTV stands for "lifetime value." It is a metric that estimates the total value a customer will bring to a business over their lifetime as a customer. It is calculated by multiplying the average purchase value by the number of purchases a customer is expected to make over their lifetime, and subtracting the costs associated with acquiring and servicing that customer.
M-commerce: M-commerce or mobile commerce refers to the use of cellphones, smartphones, and tablets as the main drivers for buying and selling online products.
Marketplace: An online platform that allows multiple vendors to sell their products to a common customer base.
Mobile Optimization: the process of optimizing a website or app for use on mobile devices.Email marketing - the use of email to promote a business's products or services.
Net Promoter Score (NPS): Net Promoter Score (NPS) is a customer loyalty metric that measures the likelihood that a customer will recommend a company's products or services to others. It is calculated by asking customers a single question: "On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?"
Omnichannel: a multichannel approach to sales that seeks to provide the customer with an integrated shopping experience, whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks and mortar store.
Order Management System: A software system that automates and streamlines the process of receiving and fulfilling customer orders.
Payment Gateway: An e-commerce service that authorizes payments for online retailers, traditional brick and mortar, and other businesses.
Personalization: The process of tailoring a website or app's content, products, or services to an individual user based on their interests and behavior.
POE: POE stands for "proof of engagement." It is a method of measuring the effectiveness of a marketing campaign by tracking the level of engagement that it generates among its target audience. Proof of engagement can take many forms, such as likes, shares, comments, or views on social media, email open rates, click-through rates, or time spent on a website.
POS: POS stands for "point of sale." It refers to the physical location or system where a customer makes a payment for goods or services.
PPC (Pay-Per-Click): a method of online advertising in which advertisers pay each time a user clicks on one of their ads.
Product Data Management: The process of managing and maintaining the data that describes a product or service, including information such as product name, description, images, pricing, and availability.
RAAS: RAAS stands for "Retention as a Service." It is a business model where a company provides a service to help other businesses retain their customers. This service may include various customer retention strategies, customer engagement and loyalty programs, customer research and analytics, and customer support and service.
Retargeting: a form of online advertising in which a business shows ads to users who have previously visited their website.
ROAS: ROAS stands for "return on advertising spend." It is a ratio that calculates the amount of revenue generated for every dollar spent on advertising. It is calculated by dividing the total revenue generated by the total cost of advertising.
ROI (Return of Investment): is a financial metric that measures the efficiency of an investment. It is calculated by dividing the gain from the investment (return) by the cost of the investment (total amount invested), and expressing the result as a percentage.
SEO (Search Engine Optimization): the process of optimizing a website to rank higher in search engine results.
SEM: Search engine marketing or SEM is a type of digital marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) through the use of paid advertising. This is typically done through the use of paid search ads and can also include the use of other techniques such as search engine optimization (SEO). The goal of SEM is to drive more traffic to a website and increase conversions, leads or sales.
Shopping cart software: Software that allows customers to purchase products or services online by adding them to a virtual shopping cart.
SKU: SKU is a unique number that identifies specific stock in a retailer’s inventory or catalog. No two items have the same SKU.
SMS marketing: A strategy that involves sending targeted messages to customers through text messaging.
Social media marketing: the use of social media platforms to promote a business's products or services.
Sub-Affiliate Networks: Sub-affiliate networks, also known as sub-affiliate programs or sub-affiliate marketing, are a type of affiliate marketing where an affiliate (referred to as the "sub-affiliate") promotes the products or services of another affiliate (referred to as the "super affiliate") in exchange for a commission. This can happen when a super affiliate has their own affiliate program and allows other affiliates to join and promote their products or services.
Subscription-based business model: A business model in which customers pay a recurring fee for access to products or services.
Tracking Link: A tracking link is a unique URL that is provided to an affiliate as part of an affiliate program. This link contains a unique code that is used to track the customers referred by the affiliate to the merchant's website.
UPC (Universal Product Code): A unique12-digit number assigned to merchandise representing the product and the vendor
UX (User Experience): the overall experience a user has when interacting with a website or app, including ease of use and overall design.