Section 1 Glossary

Section 1: Glossary

ABM (Account Based Marketing) A B2B marketing approach that focuses resources on a small number of high-value target accounts rather than broad audience marketing. Instead of casting a wide net, ABM goes deep with a specific set of organisations, engaging multiple stakeholders within each one.

ARPU (Average Revenue per User) A metric used to measure how much revenue comes from a single customer. It is calculated by dividing the total revenue in a time period by the total number of users in that same time period.

CAC (Customer Acquisition Cost) The total cost of winning a new customer, including all marketing and sales spend associated with acquiring them. CAC should always be evaluated alongside LTV to understand whether your acquisition activity is commercially viable.

Churn Rate The percentage of customers lost in a given period, expressed as a proportion of the total customer base at the start of that period. A high churn rate is a signal that retention needs attention.

Conversion Rate The percentage of people who take a desired action, such as making a purchase or signing up, out of the total number who had the opportunity to do so.

CPA (Cost per Acquisition) The total amount spent on marketing divided by the number of customers or conversions generated. A key metric for evaluating the efficiency of individual marketing channels.

ICP (Ideal Customer Profile) A detailed description of the type of customer who is most valuable to your business. Built from customer data, research and insight, the ICP is used to focus marketing activity on attracting and retaining the right customers.

KPI (Key Performance Indicator) A measurable value that shows how effectively a business or marketing team is achieving its objectives. KPIs are used to track progress over time and flag when performance is off course.

LTV (Customer Lifetime Value) The total revenue you can expect to generate from a single customer across the entire length of their relationship with your business. LTV is calculated by multiplying average customer value by average customer lifetime, and is most powerful when compared against CAC.

NPS (Net Promoter Score) A measure of customer satisfaction and loyalty, based on asking customers how likely they are to recommend your business to others. Scores range from minus 100 to plus 100, with higher scores indicating stronger customer advocacy.

OKR (Objectives and Key Results) A goal-setting framework that connects individual and team activity to broader business objectives. OKRs build on KPIs by adding a clear methodology for cascading goals across an entire organisation.

Persona A fictional but data-driven representation of a specific type of customer, built from research and insight. Personas help marketing teams understand their ideal customers as real people, with specific needs, motivations and behaviours, rather than abstract demographic groups.

ROAS (Return on Advertising Spend) The revenue generated for every pound spent on advertising. Similar to ROI but focused specifically on paid advertising spend rather than total marketing costs.

ROI (Return on Investment) A measure of the revenue generated relative to the amount spent. In marketing, ROI is used to evaluate whether a campaign or channel is generating more value than it costs.

SMART Objectives A framework for setting effective objectives. SMART stands for Specific, Measurable, Achievable, Relevant and Time-bound. Objectives that meet all five criteria are significantly more useful than vague or aspirational goals.