Every year, the marketing world continues to develop new innovative solutions and ideas for a continuously changing consumer landscape. We've compiled 18 marketing terms to set your team up for success in 2019 and to help you stay ahead!
Introduced this year, the flywheel represents a shift in how many marketers think about B2B marketing success. The flywheel places customers at the center of a business and highlights the opportunity for repeat business through relationship building and customer service engagement. The flywheel represents how you keep your customers coming back.
2. Product Led Growth (PLG)
Product Led Growth is a strategy coined by OpenView Venture Partners that relies on product features & usage as the primary drivers of customer acquisition & retention. It leverages a free product for initial usage and begins enforcing paywalls only after value has been delivered.
3. Product Qualified Lead (PQL)
A Product Qualified Lead is someone who has tried your product and becomes interested in buying based on their usage. These leads tend to close at a higher rate since they have already interacted with your product.
4. Conversation Qualified Lead (CQL)
Conversational marketing and chatbots are becoming increasingly important in today's marketing landscape. A Conversation Qualified Lead is someone who has expressed interest in buying via a conversation with an employee or a bot. These leads are coming to you with specific questions that they want answers to in real-time.
5. Churn Rate
Churn rate is a measurement used to calculate customer retention and is significant for recurring revenue companies. It helps companies identify how many customers they are losing in a given time period. To calculate churn rate you divide the number of customers lost during a time period by the number of customers you had at the beginning of the time period.
6. Customer Acquisition Cost (CAC)
Customer Acquisition Cost is exactly what it sounds like - the cost associated with turning a lead into a customer. CAC is typically expressed as the ratio:
money spent on acquiring customers (e.g. marketing expenses) / the number of customers that you acquired in the time period that money was spent
Find out how to lower CAC here.
7. Customer Lifetime Value (CLV)
The Customer Lifetime Value is the predicted net profit associated with the future relationship with that customer. To calculate CLV: (Customer revenue - gross margin)/churn rate
8. Net Promoter Score (NPS)
The Net Promoter Score measures how likely someone would recommend your company to others on a 1-10 scale. Using this customer satisfaction metric, you can easily identify how loyal your customers are and divide them into three categories: promoters (9+), passives (7-8), and detractors (0-6). Checking your NPS regularly allows you to identify ways to improve your product or service. Launch your NPS survey today.
9. Top of the Funnel (TOFU)
Even though the flywheel has arrived, the funnel still represents how you turn prospects into customers. The top of the funnel refers to the first stages of the buying process. During this stage, buyers are becoming aware that they have an issue and are looking for more information. Whether it's subscribing to a blog or watching a video, you want to have helpful content that prompts visitors to take the desired next steps.
10. Middle of the Funnel (MOFU)
The middle of the funnel represents the middle stage of the buying process. Buyers have identified that they have a problem and are continuing to do more research; however, now they are looking at content, such as a case study, that brings your business in as a solution to the problem they are trying to solve.
11. Bottom of the Funnel (BOFU)
The bottom of the funnel represents the last stage of the buying process. This is when the buyer has identified a problem, researched possible solutions, and is getting ready to buy. At this stage, buyers are typically requesting either a free demo or consultation & beginning a conversation with a sales rep.
12. Conversion Rate
Simply put, conversion rate is the ratio between the number of people that complete the desired action on a given web page versus the number of people that visit that web page. That desired action could include filling out a form on a landing page, or clicking a CTA on a blog post.
13. Conversion Rate Optimization (CRO)
Based on the principles of the scientific method, conversion rate optimization focuses on systematically increasing the percentage of website visitors who take a desired action. By identifying key metrics, you can better understand how customers interact with your site & the actions they take. These metrics help to test & determine what design techniques work best in generating leads & closing customers.
14. Cost per Lead (CPL)
Cost per lead refers to the amount spent on acquiring a lead. This cost is factored heavily into CAC & is considered an important metric to check. The most common use case for cost per lead can be found in paid advertising where there is a direct correlation between the amount of money you are spending in something like Google Ads, and the number of leads you are generating from that spend.
15. Key Performance Indicator (KPI)
Key Performance Indicators are used to track progress towards marketing goals. By setting the right KPIs for your business, you can continuously evaluate performance and make adjustments to optimize your marketing strategy.
16. Landing Page
A landing page is a web page optimized for lead generation. Using a form, companies are able to leverage meaningful content in exchange for visitor information. Successful landing pages have well-defined content and clear conversion paths - follow these landing page best practices to generate the right leads.
17. Thank You Page
After submitting information on a landing page, customers are immediately redirected to a thank you page that a) thanks them for their submission and b) provides them with instructions on next steps. Thank you pages are important in your lead nurturing strategy - follow these best practices to get the most out of your thank you page!
18. Responsive Design
Responsive design refers to the way a website automatically adjusts to the screen size you're viewing it from. This will ensure that no matter what device your visitor is using, whether it's their computer, their phone or their tablet, your website will always look great.
With these 18 key marketing terms, you're ready to begin your inbound marketing journey! If you're looking for actionable ways to leverage these terms, then check out our Essential Guide to Demand Generation.