What are marketing metrics? The top 10 marketing buzzwords

Top 10 marketing buzzwords
1. Churn rate
2. Clickthrough
3. Cost per lead
4. Customer acquisition cost
5. Customer life cycle
6. Impression
7. Interstitial
8. Lead generation
9. Opt-in
10. RFM

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 What are marketing metrics?

 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 the customer churn rate 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 websites for building online 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). Discover the key marketing 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 by understanding customer behavior and emotion.

 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 All-in-One Guide.