62 Marketing Terms You Need to Know — Explained

Ever feel like the people around you are speaking gibberish? With all the marketing and sales terms thrown around the industry, it can be hard to keep up. Lindsay Kolowish at Hubspot.com feels our pain and came up with a glossary of 62 common sales and marketing terms. Check out the full list here and see a few must-knows below:

Adoption process
Another way of saying “the buying process.” The stages a potential buyer goes through, from learning about a new product or service to either becoming a loyal customer or rejecting it. The potential buyer may or may not end up purchasing/adopting that product or service.

Customer Acquisition Cost (CAC)
This is your total Sales and Marketing cost. To calculate, follow these steps for a given time period (month, quarter, or year):

Add up program or advertising spend + salaries + commissions + bonuses + overhead.
Divide by the number of new customers in that time period.
For example, if you spend $500,000 on Sales and Marketing in a given month and added 50 customers that same month, then your CAC was $10,000 that month.

Lifetime Value (LTV)
A prediction of the net profit attributed to the entire future relationship with a customer. To calculate LTV, follow these steps for a given time period:

Take the revenue the customer paid you in that time period.
Subtract from that number the gross margin.
Divide by the estimated churn rate (aka cancellation rate) for that customer.
For example, if a customer pays you $100,000 per year where your gross margin on the revenue is 70%, and that customer type is predicted to cancel at 16% per year, then the customer’s LTV is $437,500.

Used to refer to the practice of aligning Sales and Marketing efforts. In a perfect world, marketing would pass off tons of fully qualified leads to the sales team, who would then subsequently work every one of those leads enough times to close them 100% of the time. But since this isn’t always how the cookie crumbles, it’s important for Marketing and Sales to align efforts to impact the bottom line the best they can through coordinated communication.

When a sales rep sells an existing customer a higher-end version of the product that customer originally bought. For example, if you bought a cell phone plan and a sales rep successfully persuaded you to upgrade to a plan with more minutes or data, then that’s an up-sell.

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