D2C Glossary
Average Order Value(AOV)
It is the average amount a store or online customer spends per order. To calculate it, we divide the total active revenue by the number of orders.
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Net Promoter Score (NPS)
This is a score that measures loyalty and client satisfaction. We compute it by asking ,”how likely are you to recommend us?
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Return On Ad Spend (ROAS)
Return on ad spending is a market indicator that reveals the percentage of revenue received for every dollar spent on advertising.
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Cost Per Acquisition (CPA)
It is the typical cost to land one client. We obtain cost per acquisition by dividing the total marketing costs with the number of new customers.
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Cost-Per-Order (CPO)
The average cost to generate one order. To obtain it, divide the marketing expenses by the tidal number of orders.
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EBITA
EBITA indicates earnings before interest, taxes, and amortization. It means the extent of a company's profitability and operational efficiency, excluding interest, taxes, and amortization.
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Monthly Recurring Revenue (MRR)
The predictable monthly income from customers through active subscriptions or regular billing. It indicates the financial and growth potential of subscription-based businesses.
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Annual Recurring Revenue (ARR)
It is the yearly income from active subscriptions or contracts. It helps businesses to predict future revenue and track growth and stability.
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Conversion Rate Optimisation (CRO)
It is a process where we optimize web pages or apps to increase the percentage of visitors who carry out a desired action, like making a purchase.
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Repeat Purchase Rate
The percentage of customers who make more than one purchase. It measures customer loyalty and satisfaction.
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Contribution Margin (CM
The revenue left after deducting variable costs from sales. It measures the profitability of a product before fixed costs.
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Customer Lifetime Value (LTV)
It is the total revenue a company expects to make from a consumer over time. It helps in understanding customer value.
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Customer Acquisition Cost (CAC)
The total primary cost of obtaining a customer and the additional costs incurred during the sale is known as customer acquisition cost. It evaluates marketing efficiency.
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Click Through Rate (CTR)
The percentage of people who clicked on a specific link in response to the email or advertisement to the number of people who viewed it.
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Cost Per 1000 Impressions (CPM)
It specifies the budget required to broadcast an advertisement capable of reaching 1000 viewers. This term reflects the effectiveness and specific area that advertisements can target.
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Initiate Checkout (IC)
The moment a customer starts the checkout process on an online store, indicating potential intent to purchase.
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Split Testing (A/B Test)
It means looking at two versions of an app or website side by side to see which one gets more users or sales.
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Click To Open Rate (CTOR)
It means how many people open an email and click a link therein or take another expected action. It measures the effectiveness of email content.
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Lifetime Value (LTV)
Lifetime value is the total potential spending a customer may incur while using a specific business’s services. It helps to navigate the marketing and retention strategies.
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Stock Keeping Unit (SKU)
Under stock management, there is a code assigned to a specific product to differentiate it from other similar products. It helps track products and manage stock efficiently.
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Harmonised Tariff Code (HTC)
We use a global code to categorize items in trade. It determines tariffs and ensures smooth custom processing.
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Cost Of Goods (COGS)
The business incurs making costs to produce goods for the market. It includes materials and labors but excludes indirect expenses.
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Return On Investment (ROI)
It is a financial metric to measure the investment's profitability. To obtain it, divide the net profit by investment cost.
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Terms Of Service (TOS)
The rules and guidelines that people must follow before they can use a service. It outlines rights and responsibilities.
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Above The Fold
The content visible on the web page without scrolling. It is a prime factor for attracting and engaging visitors immediately.
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Churn Rate
The percentage of customers who stop using a service over a period. It helps measure customer retention and loyalty.
