There are a lot of terms used in marketing, and it can be tough to keep track of all of them. Here’s a quick guide to some of the most essential marketing terminology, from A to Z – from ‘A/B testing’ through to ‘UX’.
What Is Marketing And Why Is It Important To A Business?
Marketing is the process of creating value for a company through the creation and distribution of products or services. It is the function that determines what a company will produce, how it will be priced, where it will be sold, and what promotions will be used to sell it. Marketing is important to a business because it is the process that creates customers and drives sales. Marketing is the lifeblood of any business, and without it, a company cannot survive.
There are many reasons why marketing is important to a business. Marketing allows a business to communicate with its customers and build relationships with them. Marketing also allows a business to reach new markets and expand its customer base. Marketing is also important to a business because it helps to build brand awareness and create customer loyalty. Finally, marketing is important to a business because it helps to generate leads and sales.
Who Needs To Know About Marketing Terminology
Marketing teams need to be aware of digital marketing terms so they can better understand the landscape and how to reach their target audiences. Additionally, anyone responsible for creating or executing digital marketing campaigns should have a strong understanding of these terms. This includes business owners and digital entrepreneurs, so you can understand how better to market your business or products.
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Why It’s Important To Understand Digital Marketing Terms
- It’s important to understand digital marketing terms because they are the foundation of effective digital marketing. If you don’t understand the terms, you won’t be able to effectively market your business online.
- Not understanding digital marketing terms can lead to wasted time and money. You could end up investing in ineffective digital marketing strategies or using inefficient tools.
- Not understanding digital marketing terms can also lead to missed opportunities. You might not be aware of new marketing trends or effective strategies that could benefit your business.
- Understanding digital marketing terms can help you better communicate with your team and vendors. If you’re able to explain your marketing goals and objectives using the proper terminology, you’ll be able to get everyone on the same page.
- Understanding digital marketing terms can also make you a more well-rounded marketer. By expanding your knowledge of the industry, you’ll be better equipped to handle any challenges that come your way.
List Of Marketing Terms To Know
If you operate a business or are a marketer then you probably hear a lot of different sales and marketing terms being referenced. A lot of these terms are often abbreviations which can cause some confusion, but are quite easy to understand.
Use the A-Z index below for explanations of some of the common marketing and sales terms you are likely to hear. This list will continuously be updated over time.
|A/B Testing||First on the list of marketing terminology is A/B testing. This refers to two different versions of something being used to find the one that works best. Usually used to test landing pages and email marketing etc to find the best performing version.|
|Affiliate Marketing||Affiliate marketing is a type of marketing where a business pays an affiliate (such as a blogger) to advertise their products and create leads. Learn more about affiliate marketing.|
|Affiliate Network||An affiliate network is a platform that combines many different affiliate programs in one location from across many businesses. Find the top free affiliate networks.|
|B2B (Business-to-Business)||Business-to-business is often referred to as B2B and describes when businesses sell to other businesses.|
|B2C (Business-to-Consumer)||Business-to-consumer is often referred to as B2C and describes when a business sells directly to consumers. An example of this is a retailer such as Amazon.|
|Blog||A blog or 'web log' is a collection of written articles that are published on a website. Blogs can be created by anybody for both personal or professional purposes. They are a great way to make money, often through the use of affiliate marketing and advertising.|
|Bottom Of The Funnel||This is the last stage of the buying process. It is where a lead is about to become a customer after showing sufficient interest. It's at this stage that the lead can be offered a demo, consultation or sales call to close the lead.|
|Bounce Rate||The bounce rate is the percentage of people that land on your web page without clicking or navigating on your website. Bounce rates also apply to emails that bounce due to being undelivered to the recipient. A high bounce rate usually results in low conversion rates. This is because not enough people are spending time engaging with your content.|
|CAC (Customer Acquisition Cost)||This is the total cost of turning leads into customers over a given time period. To calculate, add together all sales and marketing spend. Then divide this by the number of new customers acquired during that time period.|
|Churn Rate||The churn rate is the percentage of customers that a business loses during a specified time period. It is calculated by dividing the number of customers lost during a time frame by the total number of customers at the beginning of that time frame. It is a commonly used metric for subscription businesses to calculate customer retention.|
|Conversion||A conversion is the point when a visitor takes an action on your website and becomes a customer.|
|Conversion Rate||Conversion rate is the percentage of visitors that perform the desired action such as subscribing or making a purchase.|
|CPC (Cost Per Click)||Cost per click or CPC is a metric used by marketers to determine how much they pay for ads based on the number of ad clicks.|
|CPL (Cost Per Lead)||Cost per lead or CPL is the cost paid for acquiring a lead.|
|CRM (Customer Relationship Management)||Customer relationship management is often abbreviated to CRM. It is software that helps marketing by storing and tracking customer information such as contact details, emails, call logs etc.|
|CSS||CSS stands for cascading style sheet. It is used to amend the style and layout of web pages such as colors and fonts that can be cascaded easily across all of your web pages.|
|CTA (Call-to-Action)||A Call-to-Action or CTA is something that encourages your visitors to take action and become a lead. These are usually in the form of a link, image or button on a web page that entices the visitor to take the desired action such as subscribe.|
|CTR (Clickthrough Rate)||Clickthrough rate or CTR is the percentage of users that click through a web page to the next step in the marketing campaign.|
|Demographic||Demographic refers to the profile of your customers such as their age, income level, gender and more. It is important to segment this information in order to target the required audience in your marketing.|
|Domain||A domain is the name of a website - it allows a website to be identified easily.|
|Dropshipping||Dropshipping is a form of eCommerce. The seller doesn't store or ship inventory - this is handled by a third party. When a customer places an order on the sellers store, the seller would then order this from a supplier that will ship the item directly to the customer. It can be a profitable business model as sellers do not have to pay any upfront costs of inventory nor do they store, handle or ship products. Before starting a dropshipping store, read our post of the 10 dropshipping beginner mistakes to avoid.|
|eCommerce||Electronic commerce, usually shortened to eCommerce is simply the buying and selling of goods and services over the internet.|
|email Marketing||email marketing is a key part of the marketing mix. Electronic messages are sent direct to an individuals inbox promoting your product or service.|
|Engagement Rate||The engagement rate is a metric used to gauge the amount of interaction your content receives. Engagement constitutes actions such as likes, shares and comments.|
|Evergreen Content||Evergreen content refers to content that is intended to provide a use value long into the future with little need for upkeep. It doesn't matter if a user discovers it several years down the line as it provides quality, timeless content. Evergreen content that is well optimized for keywords has better chances of ranking higher on search engines and continuing to bring in leads in future.|
|Friction||Friction relates to any part of your website that is hard to read or navigate, distracting, confusing or anything else that negatively affects the visitor and causes them to leave. This can include poor colour schemes and fonts or too many pop ups etc.|
|Gated Content||Gated content is any content that is only accessible to users after providing their information, usually email addresses but may be more detailed information. It can be free or paid content. Visitors will usually have to register using a form to gain access making it a good lead generation tool.|
|Google Analytics||Google analytics is a free to use web platform for measuring and reporting of your website traffic.|
|HTML||HTML stands for hypertext markup language. It is a commonly used type of coding used to create web pages.|
|Hyperlink||A hyperlink is an element of a web page such as text or images that when clicked on will re-direct you to another web page. They can be linked to another area on the seam page, a different page on the same site or a different website altogether.|
|Inbound Marketing||Inbound marketing is when your customers are drawn into your website and content. This can be achieved through creating and publishing quality and useful content such as blog posts and social media that add value to the visitor and help to build a positive relationship.|
|Keyword||Keywords are specific words or phrases that are the topics of your web pages. These help you get ranked in search engines such as Google.|
|KPI (Key Performance Indicator)||Key performance indicator is often shortened to KPI. It is a type of measurement used to evaluate the performance and success of an activity or individual in achieving goals.|
|Landing Page||A landing page is a web page containing a form that is used for lead generation. Offers such as free eBook downloads and webinar registrations are commonly used to encourage people to sign up and capture their information.|
|Lead||A lead is somebody that has shown an interest in your products or services. This may be through completing a registration form or subscribing to a blog or newsletter.|
|Lead Generation||This is the process of attracting prospective customers to your business.|
|Lead Nurturing||Lead nurturing is the method for keeping leads engaged and pushing them further down the sales funnel. This can be achieved through careful communication such as email to help build on the relationship.|
|LTV (Lifetime Value)||Lifetime value or LTV is the predicted net profit associated with the future relationship of a customer. It can be calculated as (customer revenue - gross margin) / churn rate.|
|Market Share||Market share is the percentage of sales or revenue that a business makes within a particular market. Example - a market has annual sales of 100,000 units, your company makes 20,000 sales of these per year therefore you have a 20% share of the market.|
|Meta Tag||A meta tag is a form of HTML code containing a page description, keywords and it's URL which helps search engines rank and display your content.|
|MOFU (Middle of the Funnel)||Middle of the funnel sometimes gets abbreviated to MOFU. This is the stage after a buyer has identified a problem and is looking for the solution. You can now position your business to provide the solution.|
|Native Advertising||Native advertising fits seamlessly into the web page it appears on in order to feel less like ordinary advertising. It is usually unobtrusive, appearing alongside editorial content and offering more relevance to the consumer.|
|Niche||A niche is a specific segment of a market that appeals to a smaller, more concentrated audience.|
|NPS (Net Promoter Score)||Net promoter score (NPS) is a metric used to measure customer loyalty. This score is derived from survey results from your customers scoring you from 0-10 on how likely they would recommend you. 0-6 would be classed as detractors, 7-8 are passives and 9-10 are promoters. To calculate your NPS, simply subtract the percentage of detractors from the percentage of promoters. For example, your survey results show that 20% are detractors and 50% are promoters. It is calculated as promoters - detractors. So 50 - 20 = 30.|
|Organic Search||This is the natural way of ranking a web page on search engines without any other paid means. Pages can be ranked higher through good SEO practices.|
|PPC (Pay-per-Click)||Pay per click or PPC is an advertising method where you would pay for each click on your ad.|
|Qualified Lead||A qualified lead is somebody that is likely to buy as they have shown sufficient interest in learning more about a product.|
|ROI (Return On Investment)||Return on investment is a metric used to determine the profitability of an investment.|
|SEO (Search Engine Optimization)||Search engine optimization is usually referred to as SEO. It is a way to enhance and improve a web page to perform better in search results. It is an important method to consider for any website owner to rank higher on search engines like Google.|
|SMB (Small-to-Medium Business)||Small to medium business is usually shortened to SMB. It simply refers to smaller sized businesses. What constitutes a small business varies but they are usually denoted as having fewer than 500 employees. They are sometimes also referred to as SMEs (Small to medium enterprises).|
|TOFU (Top Of The Funnel)||Top of the funnel or TOFU for short is the first stage of the buying process. This is the first step where an individual is identifying a problem and looking for more information.|
|USP||USP is referred to as either unique selling point or unique selling proposition. It is the point that makes your business better than the competition and makes it stand out.|
|UX||The final one on the list of marketing terminology is UX. UX is the user experience and is the overall experience a customer has at every stage with your business.|
Further Reading On Marketing Terms
We hope this has now given you a better understanding of marketing terminology and why it is important to you and your business. You may also like to view pricing models and strategies you can implement in your business.
The above list is intended to give a good overview but it is recommended to commit to further reading to get an enhanced view of a particular subject area. Check out the best books for success. If you struggle to find the time to read books, why not see how executive book summaries can help as an alternative.
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