Categories
Marketing Acronyms

Average Revenue Per User (ARPU)

AKA:
Average Revenue Per Paying User (ARPPU), Average Revenue Per Unit (ARPU)

What does it mean:
As the name suggests, it’s the average revenue each user gives you. 

The Formula:

Monthly Recurring Revenue (MRR) ÷ Active Customers = ARPU

Use it in a sentence:

To colleagues:

“We’re never going to build a big business on $1 ARPU, let’s reconsider our business model.”

To investors:

“We doubled our ARPU by adding a new team’s plan to our product offering.”


At a party:

“Oh, man do you know where the bathroom is? I’ve really got to ARPU”

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Marketing Acronyms

Annual Recurring Revenue (ARR)

AKA:
Annual revenue

What does it mean:
Used in subscription-based businesses it’s your current expected annual revenue based on current Monthly Recurring Revenue (MRR).

The Formula:

Monthly Recurring Revenue (MRR) x 12 months = ARR

Use it in a sentence:

To colleagues:

“If we can just get to $5M ARR we are almost at break-even.”

To investors:

“We are doubling our ARR year-over-year thanks to our large distribution partners.”


At a party:
“Did you hear about that startup that hired an actual pirate on the marketing team? They thought it might increase their ARR.” 

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Marketing Acronyms

Average Order Value (AOV)

AKA:
Average Cart Size

What does it mean:
Used mainly in e-commerce businesses it’s the average size of all the orders for a given period. It’s an important metric because larger AOV means more ability to spend money to acquire users. 

The Formula:

Total Revenue / Total Orders = AOV

Use it in a sentence:

To colleagues:

“Let’s try to increase AOV this month with a promotion for free shipping for 5 items or more.”

To investors:

“We increased our AOV by upselling users a bobblehead during checkout. Everyone loves bobbleheads.”


At a party:

“You don’t even want to know my AOV on Wish.com. I’m pretty sure it violates several international trade deals.”

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Marketing Acronyms

Customer Acquisition Cost (CAC)

AKA:
Acquisition (ACQ), Cost-per-action (CPA)

What does it mean:

The cost takes to acquire 1 user to your service. Typically this would just factor paid media spend but can sometimes include other costs. 

The Formula:

Media spend / Users acquired = CAC

Use it in a sentence:

To colleagues:

“We need to optimize our media spend around the channels with lower CAC.”

To investors:

“Today our CAC is $50 and steady. We have been testing new channels that may bring this down to as little as $30.”


At a party:

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“So I say to the guy in the bathroom at the marketing conference, excuse me but your zipper is down and your CAC is showing.”

Categories
Marketing Acronyms

Conversion Rate Optimization (CRO)

AKA:
A/B Testing, Funnel Optimization

What does it mean:

The practice of making improvements to key parts of your website or service such as user signup and purchase funnels.  

The toolset to do it:

Optimizely, Google Optimize, Visual Website Optimizer, Hotjar, Crazyegg, Mixpanel

Use it in a sentence:

To colleagues:

“Only 1% of users who enter our signup funnel complete the process. We need to put some time into CRO.”

To investors:

“We have been doing CRO on our payment flow and dramatically improved conversion rates. We are ready to scale our top of funnel”


At a party:

“I’ve been doing some serious CRO on my Tinder profile and as a result have several dates next week”

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Marketing Acronyms

Cost Per Click (CPC)

AKA:
Paid Per Click (PPC), Search Engine Marketing (SEM)

What does it mean:

How much you pay for each click to your website on a paid channel such as Google Adwords.

The formula:

Total Ad Spend / Total Clicks = CPC

Use it in a sentence:

To colleagues:

“Let’s try to find some cheaper CPCs in other regions for our marketing campaigns.”

To investors:

“We are seeking funding now as the CPCs in our industries are expensive and competitive.”


At a party:

“Sometimes when I’m bored I search for my competitor’s high-cost CPCs and click on their ads repeatedly.”

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Marketing Acronyms

Cost Per Lead (CPL)

AKA:
Cost Per Action (CPA)

What does it mean:

How much you pay for each lead generated on your website or service. Typically this would mean a visitor successfully filled in a form and provided their contact information. Primarily used when talking about generating leads for sales teams. 

The formula:

Total Ad Spend / Total Leads Generated = CPL

Use it in a sentence:

To colleagues:

“I have found that LinkedIn generates the best quality leads but the CPL is typically higher than other platforms.”

To investors:

“Across all of our marketing channels we have an average CPL of $10.”


At a party:
“I spent $200 on this dress and only two guys have flirted with me tonight. That’s an expensive $100 CPL if you ask me.” 

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Marketing Acronyms

Cost Per Mille (CPM)

AKA:
Cost Per Thousand, Cost Per 1000, Cost Per 1000 Impressions, Effective CPM (eCPM)

What does it mean:

Used in media buying, especially banner advertising, this is the cost of 1000 impressions of your advertisement.  

The formula:

Total Media Cost / (Impressions x 1000) = CPM

Use it in a sentence:

To colleagues:

“For our rebrand campaign let’s buy some premium CPMs on awesome media sites.”

To investors:

“We make money from our users showing them ads and on a CPM model”


At a party:

“Remember the good ol’ days when CPMs were low and banner ad Click Through Rates (CTR) were high? Good times, good times.”

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Marketing Acronyms

Call To Action (CTA)

AKA:
Button

What does it mean:

Typically placed in a large button on a website or service, the Call to Action is meant to prompt an immediate response or encourage a fast sale. 

The formula:

Often an imperative verb such as ‘Call Now’, ‘Buy Today’, ‘Tell Me More’

Use it in a sentence:

To colleagues:

“Let’s A/B test the CTA on our homepage to make sure we’ve used the right words there.”

To investors:

“We know what CTA our users best respond to thanks to user surveys and campaign testing.”


At a party:

“I’ve got a CTA none of you can refuse. Who wants a SHOT?!?”

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Marketing Acronyms

Click Through Rate (CTR)

AKA:
Campaign performance, keyword performance 

What does it mean:

Typically placed in a large button on a website or service, the Call to Action is meant to prompt an immediate response or encourage a fast sale. 

The formula:

(Clicks / Total Impressions) * 100 = Click Through Rate (CTR) %

Use it in a sentence:

To colleagues:

“Our last AdWords campaign had a CTR of less than 1%. Let’s optimize it further and target 2% next month, ”

To investors:

“We do a lot of testing on our ad creatives to find the best CTR.”


At a party:

“Do you guys ever put subliminal messages in your banner ads just to see if it improves CTR? What? Just me?”

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