Like all industries, eCommerce comes with tons of acronyms, buzzwords, and industry jargon that can leave even an eComm veteran looking to Google for help. From CAC to ROAS, 0P Data and NPS, navigating the ecommerce landscape can feel like deciphering complex code. Do not fret. Most of the time they’re just fancy acronyms given to simple concepts.
We’ve put together this deep dive guide on every eCommerce acronym or buzzword under the sun.
Let’s dive in!
0P Data: Zero-party Data
0P Data is information voluntarily shared by individuals directly with a company, providing valuable insights into their preferences, interests, and intentions. Post purchase surveys are a great way to get this data.
1P Data: First-Party Data
1P Data is information collected directly by a company from its own sources, such as its website or mobile app, enabling the company to better understand its own customers' behavior and preferences. An example of 1P data is data collected from your website, such as page views, session duration, bounce rates, and conversion rates. It provides insights into user behavior, navigation patterns, and the effectiveness of your website.
2P Data: Second-Party Data
2P Data is another company's first-party data that is shared with another organization, allowing for targeted marketing and insights into a different customer base. Facebook data from Ads Manager is an example of this data for an eCommerce business. The data is Facebook’s first-party data, and when it is shared with you it becomes your second-party data.
A 301 Redirect is a method used in web development to permanently redirect one URL to another, helping maintain search engine rankings and ensuring users are directed to the correct webpage.
3P Data: Third-Party Data
3P Data is information collected by external sources and then sold or shared with other companies, providing additional insights about consumer behavior, interests, and demographics.
A 404 error is an HTTP status code that indicates that the requested webpage or resource could not be found on the server. It is commonly displayed when a user attempts to access a webpage that no longer exists, has been moved, or has a broken link, and it serves as a notification that the requested content is unavailable.
A/B Testing is a technique used in marketing and web development to compare two versions of a webpage, advertisement, or user experience to determine which one performs better, helping optimize campaigns and improve conversion rates. You compare an A version to a B version for a focus metric (clicks, average revenue per visitor etc.) and choose a winner based on the data. The best eCommerce companies rigorously A/B test their ads and website.
Formerly known as Enhanced Brand Content, A+ Content is a feature on Amazon that allows sellers to create visually rich and informative product descriptions using enhanced images, graphics, and additional text. It aims to improve the overall presentation of a product listing and increase customer engagement and sales. Sellers must register their brand to qualify for A+ content. Studies by Amazon show a 5.6% increase in conversion from A+ content.
Above the Fold
Above the Fold refers to the content on a web page that is immediately visible to users without scrolling. It is the portion of the page that appears on the screen when the page loads, and it is crucial for capturing users' attention and conveying important information before they take further action. The term comes from newspapers that would fold in half and the important content of a newspaper would appear ‘above the fold’.
ADA compliance refers to conforming to the standards set by the Americans with Disabilities Act (ADA) to ensure that digital content, such as websites and applications, are accessible to individuals with disabilities. It involves making design and development considerations to provide equal access and usability to all users. Ecommerce companies could face legal action if their websites are not ADA compliant.
Advantage Plus Shopping
Advantage+ shopping campaigns are offered by Meta (Facebook) and leverage machine learning to help you reach audiences with greater efficiency. This takes control out of the media buyer's hands and gives it to Meta. Instead of creating custom audiences, you give meta your creative and let its algorithm find the best customers for your product based on the data they have about their users and your company & creative.
Affiliate marketing is a performance-based marketing model where individuals or businesses, known as affiliates, promote products or services of other companies and earn a commission for each sale or action generated through their referral.
AOV: Average Order Value
AOV stands for Average Order Value. It is a metric that calculates the average amount of money spent by customers in a single order.
Total revenue / total orders = AOV (Average Order Value)
API: Application Programming Interface
An API is a set of rules and protocols that allows different software applications to communicate and interact with each other, enabling data exchange and functionality integration. Most eCommerce softwares rely heavily on APIs to integrate with each other. For example Klaviyo pulls order data from the Shopify API to trigger post purchase flows.
ASIN: Amazon Standard Identification Number
ASIN is a unique alphanumeric identifier assigned by Amazon to each product in its catalog. ASINs are used for product identification and are needed for listing and selling products on Amazon.
ASP: Average Selling Price
ASP represents the average price at which a product or service is sold. ASP is often used as a performance metric to track changes in pricing trends and revenue generation.
Revenue from product / quantity of product sold = Average Selling Price (ASP)
ATT: App Tracking Transparency
ATT refers to a feature introduced by Apple in their 14.5 update that requires user consent for apps to track their activities and access device-specific data for targeted advertising and analytics purposes. While ATT enhances user privacy and puts control over data sharing in the hands of the user, it made advertising on platforms like Meta (Facebook) more difficult because they weren’t able to track as much data on the user.
AVS: Address Verification Service
AVS is a security measure used by merchants to validate the billing address provided by a customer during a transaction. AVS helps verify the authenticity of the address and reduces the risk of fraudulent transactions and of packages being delivered to the wrong or non-existent addresses.
BFCM: Black Friday Cyber Monday
BFCM refers to the period encompassing the Friday after Thanksgiving and the following Monday, which is known for being a major shopping weekend with significant sales and promotions offered by retailers both in-store and online.
Bid cap is the maximum limit set on the amount of money an advertiser is willing to spend on a single specific advertising event (conversion, click etc.) on platforms like Facebook or Google. Bid caps help control ad spend and ensure your cost-per-bid never goes above the bid cap amount.
BNPL: Buy Now, Pay Later
BNPL is a payment option that allows customers to make a purchase and delay the payment, typically in installments over a specified period of time, often interest-free or with minimal fees.
BOGO: Buy One, Get One
BOGO is a promotional offer where customers can purchase one item and receive another item of equal or lesser value for free or at a discounted price.
Bounce Rate (Email)
Bounce rate for email is the rate at which your emails are not delivered. Typical email bounce rates should be less than 5%.
Bounce Rate (Website)
Bounce rate for a website is the percentage of website visitors who navigate away from your webpage after viewing only that page, without taking any further action. The average eCommerce bounce rate is 43%.
The Buy Box refers to the box on the right hand side of the Amazon product detail page where customers can add items for purchase to their cart. It is extremely competitive to be at the top of the Amazon buy box. 82% of Amazon sales go through the Buy Box, and the percentage is even higher for mobile purchases.
CAC: Customer Acquisition Cost
CAC is the cost incurred by a business to acquire a new customer. CAC is calculated by dividing the total marketing and sales expenses by the number of new customers acquired during a specific time period.
Total marketing spend $ / number of new customers acquired = Customer Acquisition Cost (CAC)
Check out this deep dive on True Classic to see how they think about CAC
Some refer to a “Fully Loaded CAC” that will include salaries of the sales and marketing team, cost of tools, and overhead like office expenses in the marketing spend calculation.
CAN-SPAM stands for Controlling the Assault of Non-Solicited Pornography And Marketing Act. It is a law in the United States that sets rules and requirements for commercial email messages, such as providing recipients with the ability to opt-out and including accurate sender information.
CDP: Customer Data Platform
A CDP is a software system that collects, consolidates, and organizes customer data from various sources to create unified customer profiles. CDPs enable you to gain a comprehensive view of their customers, personalize marketing efforts, and enhance customer experiences through data-driven insights and segmentation.
A Chargeback occurs when a customer disputes a credit card transaction and requests a refund from their bank or credit card issuer. Chargebacks are typically initiated in cases of fraud, unauthorized transactions, or dissatisfaction with the purchased product or service. Typical chargeback rates in eCommerce are below 1%. Anything above that is a red flag. Average chargeback rates in retail are 0.5%.
Total chargebacks / total transactions = Chargeback rate
CLV: Customer Lifetime Value
CLV is a metric that estimates the total value (revenue) a customer will bring to your business over their entire relationship.
Click Rate (Email)
Similar to the CTR (click through rate), Click Rate measures how often email recipients click on emails that they receive. The difference between the two metrics is in the denominator. Click rate measures the total number of clicks versus emails sent while CTR measures the total number of clicks versus emails opened.
Total emails clicked / total emails sent = Click Rate (email)
COGS: Cost of Goods Sold
COGS represents the direct costs associated with producing or acquiring the products or services that a company sells. COGS includes expenses such as materials, labor, and manufacturing overhead directly attributed to the production process.
Cohort Analysis is an analytical technique that involves grouping customers or users based on a shared characteristic or behavior and analyzing their behavior patterns over time. Typical cohort analyses look at users acquired in a certain month or through a certain channel. We prefer Cohort Analysis to just looking at the repeat purchase rate (% of sales from returning customers) because it provides a clearer picture of LTV trends. The repeat rate is highly dependent on how aggressively you are acquiring new customers, whereas a Cohort Analysis is a truer picture of how customers are spending with your business.
Cookies are small text files that are stored on a user's device when they visit a website. Cookies contain information about the user's interactions with the website and enable personalized experiences, such as remembering items in shopping carts or wish lists or tracking user behavior for analytics and advertising purposes.
Cost Cap is a bidding strategy used on Facebook where you enter the maximum amount you are willing to pay for an action (click or conversion) and Facebook will use its algorithm to bid for you and ensure the average cost per action is below your cap. When using Cost Caps individual auction bids may be above or below your stated Cost Cap (unlike Bid Caps), but they will average out to below your Cost Cap.
CPA: Cost Per Acquisition
CPA is a metric that measures the average cost a business incurs to acquire a customer. In eCommerce, CPA and CAC are often used interchangeably.
Total cost of ad campaign / total customers acquired from ad campaign = CPA (Cost per Acquisition)
CPC: Cost Per Click
CPC is calculated by dividing the total ad spend on a channel by the total number of clicks in a channel. In certain platforms like Google you pay per click while other platforms charge per impression. The CPC helps to measure the cost effectiveness of your advertising.
Total ad spend / total clicks = Cost Per Click (CPC)
CPL: Cost Per Lead
CPL measures the average cost a business incurs to generate a lead through marketing. Ecommerce companies sometimes look at the CPL as the cost to acquire a customer email address.
Total ad spend / total leads = Cost Per Lead (CPL)
CPM: Cost Per Mille (Thousand)
CPM is the cost to deliver 1,000 ad impressions (Mille means 1,000 in Latin). CPM is often used in display advertising and helps advertisers assess the cost-effectiveness of their campaigns in terms of reaching a large audience. Typical eCommerce CPMs on Meta (Facebook) are $14-15.
CRM: Customer Relationship Management
CRM is a system that helps businesses manage and analyze interactions with their customers. CRM software enables organizations to track customer data, improve customer interactions, and enhance customer satisfaction. CRMs are typically used in the B2B world and use things like lead scoring to manage customer relationships.
CRO: Conversion Rate Optimization
CRO is the process of improving the percentage of website visitors who take a desired action, such as making a purchase or filling out a form. CRO involves analyzing user behavior, making design and content adjustments, and conducting experiments like A/B tests to increase conversion rates.
Cross-sell is a sales technique where you offer your customer additional or related products or services to complement their original purchase. It aims to increase customer value and revenue by encouraging customers to buy more than one item or upgrade their purchase.
CSAT: Customer Satisfaction Score
CSAT is a customer experience metric that measures how happy customers were with a product, service, or experience. Typical eCommerce CSAT surveys are given after a customer engages with customer service and ask something like “How would you rate your overall satisfaction with the service you received?” The answer options are typically from 1 (very unsatisfied) to 5 (very satisfied). Typically eCommerce companies target CSAT scores in the 75-85% range.
Number of satisfied customers (4 and 5 scores) / number of survey responses = Customer Satisfaction Score (CSAT)
CTA: Call to Action
CTA is a prompt or directive that encourages users or customers to take a specific action, such as clicking a button, subscribing to a newsletter, or making a purchase. CTAs are strategically placed to guide user behavior and drive desired actions.
CTR: Click-Through Rate
CTR measures the percentage of users who click on a specific link or ad, typically displayed as the number of clicks divided by the number of impressions. Typical eCommerce CTRs for Meta (Facebook) ads are around 1%. Typical ecommerce email campaign CTRs are between 2-4%. For both, the higher the CTR the better.
Total clicks / total impressions = Click-Through Rate (CTR) [Ads]
Total email clicks / total email opens = Click-Through Rate (CTR) [Email]
CVR: Conversion Rate
CVR measures the percentage of users who complete a desired action. In eCommerce it typically refers to the % of customers that make a purchase. CVR helps measure the success of your customer acquisition funnel. Typical eCommerce conversion rates are around 2% but depend a lot on the price of the products you sell.
DAM: Digital Asset Management
DAM is a system or software that helps businesses organize, store, and distribute their digital assets, such as images, videos, documents, and other media files. DAM streamlines asset management, enables efficient collaboration, and ensures consistency in branding and content.
A Data Feed is a file or stream of structured data that contains information about products, services, or other data elements. Data feeds are commonly used in eCommerce to provide real-time or updated information to various platforms or systems.
A Dedicated IP refers to an IP address that is exclusively assigned to a particular domain or user. It provides a unique and dedicated identity for the domain or user, offering more control, reliability, and security for their online activities, such as email sending or website hosting.
A Drip Campaign is an automated marketing campaign that delivers pre-scheduled, targeted messages to customers over a specific period of time. Drip campaigns are designed to nurture potential customers, maintain customer engagement, and guide users through the customer journey.
DTC refers to a business model where companies sell their products or services directly to consumers without relying on intermediaries, such as retailers or distributors. DTC brands have control over the entire customer experience, from manufacturing and marketing to sales and customer support. We think the biggest advantage of being direct-to-consumer is the ability to talk directly to your customers and get feedback to improve your product and shopping experience.
Dwell Time refers to the amount of time a user spends on a web page before navigating away. It is a metric used to measure user engagement and the relevance of the content on a webpage. It can be found in Google Analytics under “Average Session Duration”. Average dwell times are typically between 2-4 minutes.
Dynamic Content refers to website or email content that is personalized and tailored to individual users based on their preferences, behavior, or other data. It allows for real-time customization and provides a more personalized and relevant user experience.
ERP: Enterprise Resource Planning
ERP is a software system that integrates and manages various core business processes, such as inventory management, financials, human resources, and customer relationship management, in a centralized and unified platform. Ecommerce companies typically bring in ERPs like Netsuite once they have scaled above $50M in annual revenue.
ESP: Email Service Provider
ESP is the software you use for email marketing, and includes tools for creating, sending, and managing email campaigns. ESPs often provide features like email automation, segmentation, and analytics.
Evergreen Content refers to content that remains relevant and valuable to users over a long period of time. It is not time-sensitive and continues to attract traffic, engagement, and organic search rankings even after its initial publication.
FBA: Fulfilled by Amazon
FBA is a service provided by Amazon where sellers store their products in Amazon's fulfillment centers. Amazon takes care of the inventory storage, packaging, and shipping on behalf of the sellers, allowing them to leverage Amazon's logistics infrastructure.
FBM: Fulfilled by Merchant
FBM is a fulfillment method on Amazon where sellers are responsible for storing, packaging, and shipping their own products. With FBM, sellers have more control over the fulfillment process but may need to handle logistics themselves.
First Click Attribution
First Click Attribution is an attribution model in digital marketing that attributes the conversion or sale to the first interaction or click a user had with a marketing channel or ad. It gives credit to the first touchpoint that introduced the user to the brand or product.
Form Submit Rate
Form Submit Rate refers to the percentage of users who successfully submit a form on a website or landing page. Also known as the opt-in rate. It is a metric that measures the effectiveness of a form and indicates the conversion rate of form submissions. The average form submit rate for eCommerce email collection popups is 3%.
GA: Google Analytics
GA is a web analytics tool provided by Google that tracks and reports website traffic, user behavior, and other relevant metrics. GA helps businesses gain insights into their website performance, audience demographics, and marketing effectiveness.
GA4 is the latest version of Google Analytics, introduced as an upgrade to the previous Universal Analytics. It offers advanced tracking capabilities, enhanced data analysis, and a more flexible data model, allowing you to gain deeper insights into user behavior and better understand the customer journey.
GDPR: General Data Protection Regulation
GDPR is a comprehensive data protection law enacted in the European Union (EU) that went into effect in 2018. It regulates the collection, processing, and storage of personal data of EU citizens, with the aim of safeguarding their privacy rights and giving them greater control over their data.
Gross Margin / Gross Profit
Gross Margin or Gross Profit refers to the difference between the revenue generated from sales and the cost of goods sold (COGS). It represents the profit earned before deducting other expenses and indicates the profitability of a business's core operations.
HARO: Help a Reporter Out
HARO is an online platform where journalists and reporters can connect with sources to obtain information and quotes for their news articles. HARO is a great way for eCommerce businesses to get backlinks by contributing quotes to reporters.
Headless refers to an architectural approach in web development where the front-end and back-end of a website or application are decoupled. It allows for greater flexibility and scalability, as the front-end can be developed and deployed separately from the back-end, enabling the use of different technologies and providing a more customizable user experience.
HTML Email refers to an email format that is created using HTML (Hypertext Markup Language), allowing for rich formatting, images, links, and interactive elements. HTML emails provide more design flexibility and can result in visually appealing and engaging email campaigns.
Incrementality is a concept in marketing that measures the additional impact or lift generated by a specific marketing activity compared to a baseline or control group. It helps determine the true effectiveness and return on investment of a marketing campaign or tactic by isolating the incremental results it produces.
KPI: Key Performance Indicator
A KPI is a measurable metric or data point used to evaluate the performance and progress of a business or specific objectives. KPIs are selected to align with business goals and provide insights into performance, enabling informed decision-making.
LP: Landing Page / Lander
Landing Page or Lander is a web page specifically designed to capture the attention of visitors and encourage them to take a desired action, such as making a purchase or filling out a form. It is optimized for conversions and often contains focused content and persuasive elements.
Lead Magnet refers to a valuable and enticing piece of content, such as an ebook, guide, or webinar, offered to visitors in exchange for their contact information. It is designed to attract and capture leads, helping businesses build their email lists and nurture potential customers.
Linear Attribution is an attribution model in marketing that distributes equal credit to each touchpoint or marketing channel in the customer journey. It assumes that all interactions contribute equally to a conversion or sale, without emphasizing any specific touchpoint.
Liquid is a templating language used in web development to dynamically generate and render content on web pages. It provides a flexible way to manipulate and display data, enabling developers to create dynamic and personalized web experiences.
LNDC: Last Non-Direct Click / Last Click Attribution
LNDC is an attribution model that assigns credit for a conversion or sale to the last marketing channel or touchpoint that the user interacted with before converting, excluding direct traffic. LNDC puts all the credit on the channel that was last clicked to cause a conversion.
LTV / CLTV: Lifetime Value / Customer Lifetime Value
LTV represents the total value a customer is expected to generate for a business over the course of their relationship. LTV helps businesses assess the long-term profitability of their customer base and make informed decisions about customer acquisition and retention strategies.
LTV:CAC is a ratio that compares the Customer Lifetime Value (LTV) to the Customer Acquisition Cost (CAC). It is one of the holy grail metrics in eCommerce. A higher LTV:CAC ratio indicates better profitability and return on investment. If you have a low LTV to CAC ratio the business is likely not sustainable in the long term. Anything above 3:1 is considered a good LTV to CAC ratio.
Customer Lifetime Value (LTV) / Customer Acquisition Cost (CAC) = LTV to CAC ratio
MAP: Minimum Advertised Price
MAP is the lowest price at which a retailer is allowed to advertise a product, set by the manufacturer or brand. MAP policies help maintain price integrity and prevent price-based competition among retailers.
Mega Menu refers to an expanded and visually rich menu that displays multiple navigation options and subcategories in a dropdown format. It allows users to navigate through a website's content more efficiently and provides a better user experience, especially for websites with extensive content or product offerings.
MER: Marketing Efficiency Ratio
MER is a financial metric that measures the proportion of a company's total revenue that is spent on marketing and advertising expenses. MER helps evaluate the efficiency and effectiveness of marketing investments and assess the financial impact of marketing activities.
Total revenue / total ad spend = Marketing Efficiency Ratio (MER)
MMM: Marketing Mix Modeling
MMM is a statistical analysis technique used to measure and evaluate the impact of various marketing activities and channels on sales or other business outcomes. MMM helps you optimize your marketing strategies by identifying the most effective marketing channels.
Modal refers to a type of dialog box or popup window that appears on top of a web page to provide additional information, capture user input, or prompt a specific action. Modals are commonly used to display messages, gather user feedback, or present offers to enhance user engagement.
Money Pages are landing pages or webpages specifically designed to drive sales or revenue for an e-commerce business. They are optimized for conversions and typically contain persuasive content, compelling offers, and clear call-to-action elements. One goal of eCommerce SEO is to drive visitors to your money pages.
MOQ: Minimum Order Quantity
MOQ is the minimum number of units or quantity of a product that a buyer must purchase in a single order. MOQ is set by manufacturers or suppliers to ensure profitability and efficiency in production, distribution, and logistics.
MTA: Multi-Touch Attribution
Multi-Touch Attribution is an attribution model in marketing that assigns credit for a conversion or sale to multiple touchpoints or marketing channels that a customer interacted with throughout their journey. It recognizes that customers often engage with multiple marketing channels before making a purchase, providing a more comprehensive view of the customer journey.
nCAC: New Customer Acquisition Cost
Some people define CAC as the cost to acquire all customers (new and returning) and would refer to it as a blended CAC. nCAC is then defined as the cost to acquire only new customers.
Total ad spend in a given period of time / new customers acquired in the period = nCAC (New Customer Acquisition Cost)
NPS: Net Promoter Score
NPS is a metric originally developed by the consulting company Bain and is used to measure customer loyalty and satisfaction by asking customers to rate their likelihood of recommending a product or service on a scale of 0 to 10. It provides insights into customer sentiment and helps you gauge your customer’s satisfaction and identify areas for improvement. It is typically measured with a survey given 30, 60, or 90 days post purchase. People would refer to this as 30, 60, or 90 day NPS.
OKR is a goal-setting framework that helps organizations set clear objectives and define measurable key results to track progress and drive alignment throughout the company. It was popularized by Google who implemented the framework based on a suggestion from venture capitalist John Doerr who wrote about it in his book Measure What Matters.
OMS: Order Management System
OMS is a software platform that enables businesses to manage and track the entire order fulfillment process, including order processing, inventory management, shipping, and customer service.
OOH advertising are campaigns that target consumers when they are outside their homes, such as billboards, transit ads, or digital signage. OOH advertising helps you reach a wide audience and increase brand visibility in public spaces.
OOS: Out of Stock
OOS refers to a situation where a product or item is temporarily unavailable for purchase because the inventory has been depleted. OOS can occur due to high demand, supply chain issues, or inventory management challenges.
Open Rate is a metric used in email marketing that measures the percentage of recipients who open an email out of the total number of emails delivered. It provides insights into the effectiveness of subject lines, sender reputation, and email content in capturing the recipients' attention.
Total email opens / total email sends = Open rate
Organic Traffic refers to the visitors who come to a website through unpaid channels like organic search or social.
PDP: Product Detail Page
The PDP is a webpage that provides detailed information about a specific product, including its features, specifications, pricing, and images. PDPs are crucial in eCommerce to showcase products and influence purchase decisions.
Personalization refers to the process of tailoring content, recommendations, or experiences to individual users based on their preferences, behavior, or demographics. Personalization enhances user engagement, improves customer experiences, and increases the likelihood of conversions.
PIM: Product Information Management
PIM is a software system that centralizes and manages all product-related information, including attributes, descriptions, images, and pricing. PIM systems help you streamline product data management, ensure data accuracy and consistency, and support multichannel sales.
PLP: Product Listing Page
PLP is a webpage that displays a collection or list of products in an e-commerce store, typically categorized or filtered based on specific criteria. PLPs provide users with an overview of available products and serve as entry points for product exploration.
PMax: Performance Max
PMax is a campaign type from Google that is similar to Facebook’s Advantage Plus Shopping in which you cede control of targeting and bidding to the Google algorithm. You set a conversion goal and Google’s algorithm bids across Google channels (search, display, Youtube etc.)
PO: Purchase Order
PO is a commercial document issued by a buyer to a seller, indicating the intent to purchase products or services. A PO typically includes details such as item descriptions, quantities, prices, and terms of the agreement.
POS: Point of Sale
POS is the physical or virtual location where a customer completes a transaction or purchases a product or service. A POS device or hardware is the credit card reader or cash register you use to charge customers.
Post-Purchase Flow refers to a series of emails that are sent after a customer makes a purchase. It aims to enhance the customer experience, provide support, and encourage repeat purchases or customer loyalty.
PPC is an online advertising model where advertisers pay a fee each time their ad is clicked. PPC pricing is the foundational pricing model for search companies like Google.
PR: Public Relations
PR involves managing and maintaining a positive public image and relationships between an organization and its stakeholders. PR strategies often include media relations, brand reputation management, and communication efforts to influence public perception.
ROAS: Return on Advertising Spend
ROAS is a marketing metric that measures the revenue generated in relation to the amount spent on advertising campaigns. ROAS helps businesses evaluate the effectiveness and profitability of their advertising efforts. According to a study by Nielsen, the average ROAS across all industries is 2.87:1.
Revenue generated from ad campaign / cost of ad campaign = ROAS (Return on Ad Spend)
ROI is a financial metric that calculates the profitability or efficiency of an investment by comparing the gain or return with the cost of the investment. ROI is used to assess the performance of various initiatives, including marketing campaigns, business projects, or capital investments.
SaaS: Software as a Service
SaaS refers to a software delivery model where businesses use cloud-based applications or platforms to manage various aspects of their business. Most eCommerce software today is delivered via the SaaS model. Rather than a one time fee SaaS companies charge on an ongoing basis typically monthly or yearly.
Segmentation is the process of dividing a target audience or customer base into distinct groups based on specific characteristics or behaviors. In ecommerce, segmentation allows businesses to tailor their marketing messages, offers, and experiences to different customer segments, improving relevance and increasing the likelihood of conversions.
SEM: Search Engine Marketing
SEM encompasses various strategies and techniques used to increase visibility and drive traffic to a website through search engines. In ecommerce, SEM typically involves paid advertising campaigns, such as Google Ads, to appear in search engine results and attract potential customers.
SEO: Search Engine Optimization
SEO is the practice of optimizing a website and its content to improve its visibility and organic (unpaid) ranking in search engine results. Ecommerce businesses employ SEO techniques to attract more organic traffic, increase their online presence, and enhance their chances of conversions.
SERP (Search Engine Results Page)
SERP is the page displayed by a search engine in response to a user's query. Ecommerce businesses strive to rank high in SERPs to increase visibility and drive more organic traffic to their website.
Shared IP refers to an IP address that is used by multiple domains or websites. In ecommerce, a shared IP means that multiple online stores or websites are hosted on the same server and share the same IP address. This setup is often used in shared hosting environments. Shared IP in email means that multiple companies' emails will be sent from the same IP address.
Shopify Flow is an automation tool provided by Shopify, our recommended eCommerce platform, that enables users to create custom workflows and automate various tasks and processes within their online store.
SKU: Stock Keeping Unit
SKU is a unique identifier used to track and manage inventory items. It is often a combination of letters and numbers assigned to a specific product or variant.
Social proof is the concept of leveraging positive feedback, testimonials, reviews, and social media metrics to build credibility and influence purchasing decisions.
SSL (Secure Sockets Layer)
SSL is a cryptographic protocol that ensures secure communication between a web server and a user's browser by encrypting data transmitted over the internet, providing a layer of protection for sensitive information.
A static ad refers to a display advertisement that remains unchanged and does not have interactive or dynamic elements. It typically features fixed content, such as images, text, or graphics, without any interactive features like videos or animations.
TAM: Total Addressable Market
TAM represents the total market demand for a particular product or service, indicating the maximum revenue potential for a business if it captures 100% market share.
TCPA: Telephone Consumer Protection Act
TCPA is a US federal law that regulates telemarketing calls, auto-dialing systems, and unsolicited text messages, requiring businesses to obtain prior consent from individuals before contacting them via phone or text for marketing purposes. TCPA compliance is super important for SMS marketing. Our recommended SMS marketing platform ensures you won't run afoul of TCPA.
Time Decay Attribution
Time Decay Attribution is an attribution model used in marketing analytics that assigns a higher weight or value to the touchpoints or marketing channels closer in time to the conversion event, assuming they have a more significant influence on the final outcome.
ToS: Terms of Service
ToS are the legal agreements that outline the rules, rights, and obligations governing the use of a product, service, or website, establishing the terms under which users can access and use the provided resources.
Tout refers to a brief and persuasive message or pitch used to promote a product, service, or idea. It is typically a concise and attention-grabbing statement that aims to generate interest and convince the recipient to take action. Touts can also refer to the sections in a PLP that don't directly list a product and are instead ‘billboards’ on the PLP.
Transactional emails are automated emails sent to users after a specific transaction or action, such as order confirmations, shipping notifications, password resets, or account updates. They serve to provide users with important information related to their interactions with a business.
A trigger, in marketing and automation, refers to an event or condition that initiates an action or series of actions. Triggers are often used to automate responses, such as sending an email when a user signs up or updating a customer record based on specific actions taken.
UGC: User Generated Content
UGC is any content, such as reviews, testimonials, images, videos, or social media posts, that is created and shared by users or customers rather than the brand itself. UGC is often leveraged by eCommerce companies to build trust, engage their audience, and amplify their brand message.
Unsubscribe rate represents the percentage of recipients who choose to opt-out or unsubscribe from receiving further emails or communications from a particular sender. It is a metric used to measure the effectiveness of email campaigns and the level of subscriber disengagement. The average unsubscribe rate in eCommerce is 0.27%.
Upsell refers to the sales technique of encouraging a customer to purchase a more expensive or upgraded version of a product or service or add additional products to their existing purchase, resulting in increased revenue for the business.
USP: Unique Selling Proposition
USP is a distinctive feature, benefit, or characteristic of a product, service, or brand that sets it apart from competitors and provides a clear reason why customers should choose it over alternatives.
UX: User Experience
UX refers to the overall experience and satisfaction that a user has when interacting with a product, website, or application, encompassing aspects such as usability, accessibility, efficiency, and emotional engagement.
Value Prop: Value Proposition
A Value Prop is a statement that outlines the unique value, benefits, or advantages that a product or service offers to its customers, addressing their needs, pain points, or desires and differentiating it from competitors.
Whitelist refers to the process of allowing specific entities, such as email addresses, IP addresses, or domains, to bypass certain filters or restrictions and ensure that their communication or content is accepted, trusted, or prioritized. It is often used to prevent legitimate messages from being marked as spam or blocked.
In the context of social media, whitelisting refers to the practice of granting permission or special access to specific users. In eCommerce, brands will whitelist their influencers accounts and use the influencers profile to run the brands ads. Whitelisted ads help to build trust because the ad isn't coming from the brand itself but a third-party.
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