When I first dipped my toes into the marketing world, I was quickly overwhelmed by how many unfamiliar words and terms there were…
CTA what? Buyer persona who?
Many, many Google searches later, I became familiar with the marketing jargon—and my work became a whole lot easier.
Like learning any new language, it takes a while to get up to speed. But once you know the following marketing concepts, you’ll be able to recognize and apply them to your small business.
An A/B test (also known as a split test) compares two similar versions of something to see which is more successful. For example, you might send 50% of your email subscribers an email that asks them to “Call us for more information” and 50% an email that asks them to “Call us for a free consultation.” Then you’d see which email generated more responses.
This is the text of an ad, whether it’s online or in print. Effective ad copy is clear, concise, engaging, and most importantly, relevant to the target audience.
This is a term everyone knows, but many people don’t understand. Your company’s brand is its reputation. How do customers perceive you? How do future customers perceive you? What’s different about your products and/or services—in other words, why should people buy from you and not your competitors?
The increase in how well-known a brand is.
This metric represents the percentage of visitors who go to a page on your website and then leave without clicking a single link or going to another page. A high bounce rate is typically bad; after all, the longer visitors stay on your site, the likelier they are to buy.
A buyer persona represents an imaginary customer. Building out your buyer persona(s) typically involves coming up with demographic information like age, profession, relationship status, income, background, challenges, goals, and even personality. Once you’ve created a buyer persona, use it to craft your messaging and campaigns. Ask yourself, “Would my persona like this? What’s the best way to engage him/her?” and so on.
A call-to-action (typically referred to as a “CTA”) is any word, phrase, or line encouraging the reader to immediately, you guessed it, take action. CTAs are plentiful on commercials; you’ll hear “Order a XYZ right now!” and “Pick up the phone in the next 10 minutes to get your ABC!”
Typically you only want to include one CTA per message to avoid confusing your audience and diluting your results.
So, if you’re putting together an email campaign, in the first email, your CTA might be “Click the button to read the post” and in your next email, your CTA might be, “Click here to subscribe to the blog.”
This is the practice of using content to achieve your business goals. That might sound a bit abstract, but you’re familiar with content marketing if you’ve ever read a blog post on a company’s site (like this one!) or downloaded a PDF from a business in exchange for your email address and name.
Content marketing is all about putting out useful material—whether it be in written, image, video or audio form—and drawing people in rather than disrupting potential customers with more traditional marketing schemes, like commercials, billboards, direct mailers etc.
A potential customer “converts” when they take a predetermined (by you) step that moves them closer toward purchasing. For instance, you might track how many customers who receive your marketing emails clicking through to your website.
This is the percentage of visitors who actually take the action you’ve deemed a conversion. Maybe 1,000 people receive your email, but only 100 go to your site. Your conversion rate is 10%.
Cost per acquisition
Your CAC is the average dollar amount required to acquire each customer. It’s calculated by adding up your entire sales and marketing costs for a given period of time (your marketers’ and sales reps’ salaries and variable compensation, as well as marketing campaigns, advertising, and so forth) then dividing that sum by the number of new customers you acquired in the same period. The bigger your average sale, the higher your CAC can afford to be.
Cost per click
The CPC equals how much you’ll pay when someone clicks on your PPC ad. It’s calculated based on the quality of your ad and which other advertisers are competing for your target audience’s attention.
Cost per impression
Instead of paying per click, you can pay per impression (most typically, for every thousand impressions). That means you’ll pay each time an ad is displayed to a potential customer. If you pay per thousand of impressions, the rate is known as CPM.
Your customer personas define your ideal customers. They’re based on the research and data you have on your existing buyers, as well as surveys and interviews.
This is the process of finding potential customers and attracting them to your product or service. When a lead is generated, it typically goes into your sales pipeline so you can forge a relationship and down the line, persuade them to buy.
The average lifetime value, or LTV, of a customer measures how much they will likely spend over their time as your customer. In other words, how much revenue will one person or account generate from their first purchase to their last?
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This includes every potential customer who’s interacted with your company in some way. Leads at the top of the funnel are just starting to investigate their need and require more nurturing before they’re ready to buy. Leads at the bottom of the funnel are on the brink of purchasing.
If you set up a PPC ad, you pay every time someone clicks it. PPC advertising is a guaranteed way to get traffic; after all, if no one clicks, you won’t spend anything.
A lead is qualified when they meet important criteria that make them a good fit for your business. For instance, you might consider someone a qualified lead if they simple agree to speak to one of your sales reps.
When you retarget someone, you show them ads based on their expressed interest in your products or services. To give you an idea, you might show Facebook ads to every user who’s visited your website in the past month but hasn’t become a customer.
Return on investment
The ROI equals how much money you generate from a marketing campaign or promotion, sales contest, business investment, etc. Your ROI should be positive. Although it typically refers to a dollar amount, it can also be abstract, such as brand lift.
Social media marketing
This is simply using social media platforms to attract and engage potential customers.
This is the idea that people are influenced by others’ opinions. If you have glowing Yelp reviews, for example, that’s social proof your products or services are high-quality. Leverage social proof as much as possible to gain potential customers’ trust and increase their desire to buy.
Unique selling point
To win over your competitors, you must know your unique selling point(s). What distinguishes your product or service from theirs? Maybe you have better customer service, quicker response times, more individualized care, greater expertise… You get the idea.
Your value proposition (commonly abbreviated to “value prop”) represents the core selling point of your product or service. Why is it in your customer’s interest to purchase or use it?
Use this glossary to teach yourself the fundamental terms of marketing. Although you won’t learn them all overnight, take it from me: Using them will become second nature.