Top 10 marketing metrics buzzwords

Top 10 marketing metrics buzzwords

Churn rate
is a marketing metric that measures customer or employee attrition, and
is the number of customers who discontinue a service or employees who
leave a company during a specified time period divided by the average
total number of customers or employees over that same time period.
Changes in a business’ churn rate can provide feedback for a company as
it may indicate customer response to service, pricing, competition and
so on, as well as the average length of time an individual remains a
customer. Find out more about churn from our customer loyalty expert Michael Lowenstein.

Clickthrough
in email or internet marketing is what is counted by the sponsoring
site as a result of an ad click. In practice, click and clickthrough
tend to be used interchangeably. A clickthrough, however, seems to
imply that the user actually received the page. A few advertisers are
willing to pay only for clickthroughs rather than for ad impressions.
For more on online marketing, browse this chapter download: Email marketing: The complete guide.

Cost per lead
is a more specific form of cost-per-action in which a visitor provides
enough information at the advertiser’s site (or in interaction with a
rich media ad) to be used as a sales lead. Note that you can estimate
cost-per-lead regardless of how you pay for the ad (in other words,
buying on a pay-per-lead basis is not required to calculate the
cost-per-lead).
Learn more about using internet marketing effectively with this tip on designing Web sites that build customer loyalty.

Customer acquisition cost
is the cost associated with convincing a consumer to buy your product
or service, including research, marketing, and advertising costs. An
important business metric, customer acquisition cost should be
considered along with other data, especially the value of the customer
to the company and the resulting return on investment (ROI) of
acquisition. The calculation of customer valuation helps a company
decide how much of its resources can be profitably spent on a
particular customer. For more on customer acquisition, check out this
tip on acquiring customers from Managing Customers as Investments.

Customer life cycle
is a term used to describe the progression of steps a customer goes
through when considering, purchasing, using, and maintaining loyalty to
a product or service. Marketing analysts developed a matrix that breaks
the customer life cycle into five distinct steps: reach, acquisition,
conversion, retention, and loyalty. The customer life cycle is often
depicted by an ellipse, representing the fact that customer retention
truly is a cycle and the goal of effective CRM is to get the customer
to move through the cycle again and again.
Browse the Customer Loyalty Learning Guide for more on customer retention.

Impression
is “The count of a delivered basic advertising unit from an ad
distribution point,” according to the “Basic Advertising Measures,”
from FAST, an ad industry group. Impressions are how most internet
advertising is sold and the cost is quoted in terms of the cost per
thousand impressions (CPM). Read more on marketing metrics in this tip:
Marketing Metrics: 50+ Metrics Every Executive Should Master.

Interstitial
(something “in between”) is a page that is inserted in the normal flow
of editorial content structure on a Web site for the purpose of
advertising or promotion. It can be more or less intrusive and the
reaction of viewers usually depends on how welcome or entertaining the
message is. An interstitial is usually designed to move automatically
to the page the user requested after allowing enough time for the
message to register or the ad(s) to be read. There are several
variations of interstitials. Learn more about attracting the attention
of customers with online marketing in this book excerpt, Emotion and Reason in Consumer Behavior.

Lead generation
is the use of a computer program, a database, the Internet, or a
specialized service to obtain or receive information for the purpose of
expanding the scope of a business, increasing sales revenues, looking
for a job or for new clients, or conducting specialized research. Leads
can consist of the names and addresses (or email addresses) of
individuals, corporations, institutions, or agencies. Lists of leads
can be gathered or filtered from targeted databases such as telephone
and Internet directories. For more on sales strategy and management,
check out our Sales Force Automation Learning Guide

Opt-in
email is an internet marketing term for email that recipients have
previously requested by signing up at a Web site or special ad banner.
Typically, Web users are invited to sign up for promotional information
about one or more categories of products or services. Those who sign up
have thus “opted in.” Anyone sending them email as a result hopes that
the message will not be perceived as unwanted spam. Opt-in email has
been endorsed as the best practice for marketers by the Internet Direct
Marketing Bureau (IDMB). For more on email marketing, test yourself
with our Email marketing quiz.

RFM
(recency, frequency, monetary) analysis is a marketing technique used
to determine quantitatively which customers are the best ones by
examining how recently a customer has purchased (recency), how often
they purchase (frequency), and how much the customer spends (monetary).
RFM analysis is based on the marketing axiom that “80% of your business
comes from 20% of your customers.” Although RFM analysis is a useful
tool, it does have its limitations. A company must be careful not to
oversolicit customers with the highest rankings. Find out more on
marketing planning with our Marketing strategy guide.