The ultimate eCommerce Glossary

Understand the ins and outs of all things eCommerce business and operations.

Apoorva from Lifesight avatar
Written by Apoorva from Lifesight
Updated over a week ago

Abandoned browse / Browse Abandonment

Abandoned browse or browse abandonment happens when someone visits your website or app and surf on it but ends up buying nothing. They usually see the pricing, offers, discounts, availability of the product to decide the purchase. An eCommerce CDP will detect browse abandonment if the casual browser is registered on your site or otherwise identifiable. Then, either manually or automatically, send an email with the products viewed in an attempt to convert the person.

Abandoned Cart / Cart Abandonment

An online shopping cart is called an "abandoned cart" when a customer adds items to it, but then leaves the process without completing the purchase. When a site or app visitor puts items or services in their online cart but doesn't check out, this is called "abandoning the shopping cart.”

ACH payment

An ACH transfer is an electronic bank transfer that happens through the Automated Clearing House and typically takes three to four business days to complete. In order to complete an ACH transfer, you’ll need your routing number (nine digit, different for every bank) and account numbers, account type and the transaction amount. ACH transfers include anything from bill payments to direct deposits or personal payments.

Accrued revenue

Accrued revenue is revenue that has been earned by providing a good or service, but for which no cash has been received. Accrued revenues are recorded as receivables on the balance sheet to reflect the amount of money that customers owe the business for the goods or services they purchased.

" It comes from accrual accounting and the revenue recognition principle, which says that revenue transactions should be recorded in the same accounting period in which they are earned, not in the period in which payment is received. Accrued income is common in SaaS.

Accrued revenue, unearned/deferred revenue, and accrued expenses

In contrast to accrued revenue, realized revenue and recognized revenue both refer to revenue that has been paid for. Meanwhile, unearned revenue and deferred revenue are terms used to describe revenue for which payment has been received but goods or services have yet to be delivered. An accrued expense is one that has been incurred or recognized but has yet to be paid.

Acquisition Channel

A customer acquisition channel is where you “meet” your customers for the first time, whether that’s at a trade show, on social media or through an organic search. Customer acquisition channels are the sources through which you bring in customers.

You need to know where your customers are spending the most of their time in order to understand how to reach them. Customer acquisition can occur both on and offline, and the channels you can leverage include:

  • Organic search

  • Direct traffic

  • Email marketing

  • Referrals

  • Paid search

  • Social media

  • Paid social

  • Events

  • Word-of-mouth marketing

  • Direct mail

  • Cold outreach

  • PPC

  • Podcast Ads

Acquisition Marketing

Users who are aware of your brand are the ones you want to target with acquisition marketing. An acquisition marketing strategy offers a product to consumers in the contemplation sales funnel.

How can direct-to-consumer (DTC) businesses and marketers build long-term relationships with potential customers? The only way to fully succeed in reaching this aim is to adopt tactics and approaches that target the touchpoints that occur following the awareness stage.

ADA (Americans with Disabilities Act)

The Americans with Disabilities Act (ADA) became law in 1990. The ADA is a civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public.

The purpose of the law is to make sure that people with disabilities have the same rights and opportunities as everyone else. The ADA gives civil rights protections to individuals with disabilities similar to those provided to individuals based on race, color, sex, national origin, age, and religion. It guarantees equal opportunity for individuals with disabilities in public accommodations, employment, transportation, state and local government services, and telecommunications.

Add to cart

To improve the buying behavior of the customers there is a special element that you can add to a product page or within a Collection list connected to the products category is the Add to cart element. This element consists of 2 buttons allowing users to either add a product to their shopping cart or go immediately to checkout.


Refer: Add to Cart

Advertising

E-commerce advertising is the practice of creating brand awareness, typically through paid ad campaigns on social media or search engine results. This is a popular route to increasing site traffic, click-through rate, and conversions, though now becoming increasingly expensive. Popular eCommerce advertising platforms include -

  1. Google

  2. Gmail

  3. Facebook

  4. Instagram

  5. Snapchat

  6. Tik Tok

Annual recurring revenue (ARR)

Annual Recurring Revenue is a metric that shows the amount of money a contracted subscription is generating during one year. It can be calculated by dividing Recurring revenue (monthly) by 12. Tracking the Annual Recurring Revenue metric is important in showing the real-time run rate of a subscription business.

Annual Subscription

A customer agrees to pay a yearly recurring fee to a business in exchange for items or services in an annual subscription. It is common for yearly membership fees to fall under the subscription model, in which customers are charged for access to gated content, products, and services. Examples include an annual plan for the state park entrance, a supermarket delivery service subscription, SaaS price, or a magazine subscription with an annual contract.

AOV (Average Order Value)

Average Order Value (AOV) refers to the average amount of money spent when a customer places an order on a website, mobile app, or in-store. Four ways in which AOV can impact your business are:

  • Buying patterns and trends - Average Order Value shows you the time of year you need to pay the most attention to. In other words, which season(s) most resonate with your highest value customers?

  • Conversion costs- If you have a high conversion cost but low AOV, you’re literally losing revenue. Say, if you pay $100 to acquire one customer, but earn $100 (or even less) in AOV, then you’re in the red.

  • Ad spending - You're back in the red line if you're spending equal to or more than your AOV to attract a customer. You must review your margins even if you are spending less to acquire a consumer than your AOV.

  • Pricing strategy - Most brands are terrified of raising their prices because they believe it would lower their conversion rate and turn off customers. However, you can adjust your pricing depending on how you present your firm, whether it's a luxury or an economy. If you're in the middle, it might be difficult and cause you to be concerned about your margins.

Attribution

Attribution in marketing refers to the identification of touchpoints in a customer journey that lead to certain behaviors or expected outcomes. Example - Majority sales generated from a promotional campaign may be attributed to ads on a social media platform such as facebook.

Automatic payments

An automated payment is essentially what it sounds like: a payment that’s automatically sent to one of your billers from your bank account or credit card account. You can authorize an automatic bill payment to be made using your debit card, credit card, checking account, savings account or money market account. The amount due for the payment is collected automatically by the biller according to your payment schedule.

How Does Automatic Bill Payment Work?

Customers must first select a payment method, such as a bank account, credit card, or debit card, before they may set up automatic payments. As a last step, customers must provide their payment information, which may include a checking account or routing number, a credit card number, or other information. To take funds from a customer's account on a regular basis, the corporation needs explicit approval from the customer. You can set up an automatic bill payment to charge the same amount at regular intervals (such as for digital streaming services) or to charge different amounts over the course of a given length of time (for example, a utility bill that changes in pricing month-to-month depending on usage).

Automated Reorder Campaign

Using an email or series of emails, a company can notify consumers who have purchased consumables that their product supply is running low and prompt them to place a new order. One of the main goals of a replenishment campaign is to ensure that customers place their next order with you rather than the retailer closest to their home. "Subscribe-and-save" is the term for this type of agreement.Here are four things you need to keep in mind when creating a replenishment campaign:

  1. Make Reordering Easy

  2. Use Data to Time Your Campaign

  3. Get Your Subject Lines Right

  4. Drive Your Customers to Subscription Sign-Up

Behavior Segmentation

Behavioral segmentation looks at how and when a consumer decides to spend their money on a product or service. It focuses on consumers’ shopping behavior, how they make their decisions, why they choose one product over the other, and how they feel about a product, company, or service. Some examples of behavior segmentation:

  • ordered a certain product

  • converted from a particular email campaign

  • ordered more than 3 times in the last month and hasn't used a coupon

  • spent over the average customer lifetime value

  • read a blog article and ordered for the first time

  • viewed a particular product but didn't buy

  • gave you a very negative feedback score

  • has shopped a lot in the past, but not in the last 2 months

Below the fold

The term "below the fold" refers to the portion of a webpage that visitors must scroll to view. The term "below the fold" refers to the portion of a page's content that is visible after the hero picture or primary header. In many cases, this is where you may go into greater detail about what drew a visitor in the first place.

Black Friday

The day after Thanksgiving in the United States is referred to as "Black Friday" because of the heavy sales that occur. Given the massive discounts offered by many brands during this time, it's now one of the most important shopping occasions of the year for many people.

Bottom line

Bottom line is a term used to describe a merchant's net profit after all costs have been removed from total revenue. As an alternative to net income, you may have heard it referred to as net profits.

Bounce rate

The percentage of website visitors who leave a page without taking any action, such as filling out a form, navigating to a new page, or clicking a link, is known as the bounce rate. It is usually calculated by dividing the total number of sessions by the number of single-page sessions on-site.

The average eCommerce bounce rate is **between 20% and 45 percent **, with bounce rates less than 20% considered exceptional.

Brick-and-mortar

The term "brick-and-mortar" refers to a traditional street-side business that offers products and services to its customers face-to-face in an office or store that the business owns or rents.

Bundling

Bundling is the act of grouping similar or related products together (combos) and selling them at a discounted price. This introduces customers to new products and makes existing products more appealing by providing added value.

B2C

B2C, or business-to-consumer, is used to describe a commerce transaction between a business and an end consumer. Traditionally, the term referred to the process of selling products directly to consumers, including shopping in-store or eating in a restaurant. Today it describes transactions between online retailers and their customers.

Business-to-consumer vs business-to-business vs direct-to-consumer - Direct-to-consumer (DTC) and B2C (business-to-consumer) are sometimes used interchangeably, however DTC is actually a subtype of the B2C business model. B2B (business-to-business) commerce, in which organizations sell directly to other businesses—for example, SaaS companies—should not be confused with B2C (business-to-consumer) commerce.

BNPL (Buy Now, Pay Later)

"Pay Later," also known as "Buy Now, Pay Later," is a point-of-sale financing option. Customers can choose a financing plan and pay in installments instead of having to pay the entire cost up front when retailers and DTC brands offer a Pay Later solution:

  • Pay later in full after 30 days

  • Pay later in installments into three or four equal, interest-free payments

  • Finance it, spreading the cost of larger purchases over as many monthly payments as possible. There may be interest charges.

Call To Action (CTA)

A call to action (CTA) is a marketing term that refers to the next step a marketer wants its audience or reader to take. The CTA can have a direct link to sales. For example, it can instruct the reader to click the buy button to complete a sale, or it can simply move the audience further along towards becoming a consumer of that company's goods or services. The CTA can suggest that the reader subscribes to a newsletter that contains product updates, for example. To be effective, a CTA should be obvious and should immediately follow the marketing message.

Campaign Measurement

It is simply the evaluation of your marketing/advertising campaigns using various methods and metrics. A marketing campaign is only as effective as its measurement strategy.

Let's divide the measurement plan setup into a few key components:

Determining your objectives & Key Performance Indicators (KPIs)

  • The difference between a business objective & a KPI

  • The use of proxy metrics

Identifying data sources

  • Tangible, direct leads

  • Software metrics

  • Studies

Choosing a measurement approach

  • Direct measurement (against benchmarks)

  • AB testing

  • Control and exposed

  • Surveys

Pulling it all together

  • Designing a cohesive plan

Combined, these steps help you set up comprehensive campaign measurement.

Canceled Orders Rate

The rate of canceled orders as a percentage of total orders is an important eCommerce metric to monitor. Of course, a small percentage is normal. However, too many cancellations may indicate that your products have a poor reputation, which becomes apparent when customers conduct additional research online; or that a competitor offers a lower price; or that shipping costs and delivery times cause customers to regret their purchase.

It's a good idea to tag people, who cancel orders in your eCommerce CRM and see if they do it frequently - this could be a sign of fraud.

Cart abandonment

Cart abandonment is the process of customers leaving products in their shopping carts. Many customers add items to their shopping carts but do not complete their purchases. In fact, the rate of cart abandonment in eCommerce is extremely high - around 60-70 percent - leaving merchants with the difficult task of enticing customers back.

CDP (Customer Data Platform)

A customer data platform (CDP) is a pre-built technology that marketers and customer experience professionals use to understand their brand's customers and scale hyper-personalized experiences across marketing, sales, and service channels.

Customer information is frequently fragmented and siloed across multiple systems. Even if it is unified, non-technical teams will struggle to get what they need, make sense of it, and use it to create tailored experiences without learning programming languages or relying on IT and data science teams for assistance.

In short, DTC brands need technology that:

  • Unifies all customer data

  • Provides an easy-to-use interface for managing data

  • Segments audiences

  • Generates predictive insights

  • Orchestrates seamless experiences across all marketing, sales, and customer service channels

This technology is called a CDP or a Customer Data Platform.

A CDP collects more data types (behavioral and transactional in real time, structured and unstructured) and provides value across the entire customer lifecycle, not just one stage.

Types of data put together by a  customer data platform (CDP).

Why should your DTC brand use a CDP

CDPs enable business users, modern marketers, and data analysts to make the most of all available data and insights in order to make every customer interaction count.

CDPs:

  • Consolidate data silos

  • Create a 360-degree customer view

  • Democratize access to customer data for personalization across marketing, sales, and customer support channels

Finally, by consolidating data silos and automating authentic customer interactions across multiple touchpoints and channels, CDP data enables modern marketers and CX professionals at DTC brands to provide a real-time hyper-personalized experience to their customers.

A delightful customer experience is critical for acquiring, retaining, and developing long-term relationships with customers. The foundation of exceptional CX is hyper-personalization, which is impossible to achieve without unified customer data.

Cohort Analysis

Cohort analysis is the process of tracking and analyzing the behavior of a customer cohort over time. It is an important component of retention analysis, in which you can see how different customer groups behave and how their loyalty develops.

Cohort analysis is typically presented in the form of a matrix table, in which all orders from the customer cohort are recorded. As a result, you can see when people shop, how the average time between orders works in practice, and when each group is ready to re-engage.

CRM

CRM, or customer relationship management system, is a data processing tool that tracks and makes available customer data for outreach, engagement, and relationship building. A CRM allows for continuous contact with the customer, tracking their customer journey and aligning it with business objectives.

Customer insights from a CRM aid in the development of a mutually beneficial relationship in which the customer enjoys dealing with your brand and you benefit from their loyalty.

Some CRM applications in ecommerce include:

  • Tag customers based on their interest in a specific product or category and send tailored offers to those customers.

  • Follow up with customers who return a product or cancel an order to learn more and try to keep them with a voucher for the next order.

  • Monitor how feedback relates to the products ordered to find bad ones that tarnish your brand image.

  • Investigate the purchasing habits of your most loyal customers to try to replicate it for others.

  • Investigate people's shopping habits to see if there are any bottlenecks in your funnels that need to be fixed - for example, people frequently stop and search for a sizing chart because such information is missing on product pages.

A CRM allows you to see how visitors interact with your website, whether they shop or not. You can improve your experience and connect with them by learning from their behavior.

An eCommerce CRM will typically include a direct method of communication with them, such as email, so that all segmentation and insights can be used directly for marketing.

An example of a CRM tool and the detail it provides.

Customer Retention

Customer retention is the process of continuously engaging customers and encouraging repeat orders. Data is used in customer retention marketing to personalize and guide the customer journey, build a deeper relationship with the customer, and win their loyalty and repeat business.

When acquiring new customers is expensive, the market is small, the niche is too narrow, or there is too much competition, customer retention helps eCommerce brands grow. Retention basically solves the majority of the problems that a brand would face when attempting to increase revenue. As a result, we believe that any eCommerce company should prioritize a customer retention strategy.

Benefits of customer retention

  • Lower marketing costs because selling to existing customers is free and there is no CAC.

  • Every order a placed by a customer increases the profit margin.

  • You don't have to constantly acquire new customers to keep selling; returning customers keep the business going.

  • Because great products and customer service are required to earn loyalty, people become fans and spread the word about the brand.

  • Better marketing ROI puts you in a better position to invest in new products or expand.

Customer segment

A customer segment is a group of customers who exhibit similar behaviors or characteristics and are filtered for marketing purposes. For maximum results, the idea is to engage the various segments in a more relevant, tailored manner. Some customer segments most eCommerce stores identify are:

  • VIPs

  • Sale shoppers/deal hunters

  • One-timers

  • Cart abandoners

  • Blog readers

  • Customer, who referred a friend

  • Heavy coupon users

  • Segments by location/need/preference/category they shop

LTV:CAC ratio

The LTV/CAC ratio compares a customer's lifetime value to the cost of acquisition. The ideal LTV/CAC ratio is 3:1, which means you should make three times the money you spent on customer acquisition.

Chargebacks

A chargeback is a charge that is returned to a payment card after a customer successfully disputes an item on their account statement or transactions report. A chargeback may occur on debit cards (and the underlying bank account) or on credit cards. Chargebacks can be granted to a cardholder for a variety of reasons. A high volume of chargebacks can be harmful to a merchant's bottom line.

Checkout

The checkout is where a customer pays for their online purchases. They must select a payment method, enter their details, and confirm their purchase/place their order.

Cash Flow

The availability of cash in the business at any given time is referred to as cash flow in eCommerce. A positive cash flow indicates that you have the funds to pay expenses right away whereas a negative cash flow indicates that you must wait for revenue before you can pay suppliers and so on.

It is critical to monitor your cash flow because it changes on a daily basis and can stymie your entire operation. For example, you may run out of cash right before a large shipment of stock because you decided to purchase new office furniture.

A balanced cash flow, on the other hand, allows you to invest in expansion and growth even if you aren't making a lot of money. Ecommerce businesses can maintain a positive cash flow by improving customer retention, inventory management, and increasing AOV.

Click Rate

Also known as click-through rate, the click rate is the percentage of links clicked out of all opened emails. According to Oberlo, the average eCommerce CTR is 2.07%. The click rate is an indicator of the health of your email campaign performance.

CLV, LTV, or CLTV (Customer Lifetime Value)

Customer lifetime value is the total revenue earned from a single customer over their entire lifetime as your brand’s customer.

It can be tracked, as it happens, if you have eCommerce analytics tracking in place:

CLTV = Order 1 + Order 2 + Order 3 ……

Or, it can be estimated with these formulas:

CLV = Total Revenue / Total Number of Customers

CLTV = AOV x Average number of orders per customer

CLV = AOV x order frequency per month x lifespan

Customer lifetime value is significant because the higher it is, the higher the return on marketing investment. Every subsequent order compensates for the initial acquisition cost.

A high CLTV also indicates that people like your products and buy from you frequently. So you don't have to constantly go out and find new customers to generate sales. Working for CLTV entails boosting customer retention.

Complementary Products - Complementary products are related products that are frequently used together, so selling them together makes sense. Coffee beans and coffee filters, shoes and footwear-cleaning products, dog food and food bowls are examples of complementary products.

If none of your products are clearly complementary to others, conduct a related products analysis to determine what people typically buy together and cross-sell that combination.

Contacts

The term is used in reference to customers who have visited your online store and whose contact details are available in your customer data platform.

Content Drip

Content drip is a type of email campaign that consists of a series of emails containing blog articles and other content. It's the closest thing eCommerce brands can come to a newsletter. The content drip campaign's goal is to engage, inform, entertain, and educate people in between orders. It is a post-purchase retention strategy that allows you to stay top-of-mind without being too pushy with promotional emails and calls to action.

It can be tailored to the customer's interests as demonstrated by their purchasing behavior - different content drips can be set up for different segments.

Content management system (CMS)

A content management system, often abbreviated as CMS, is software that helps users create, manage, and modify content on a website without the need for specialized technical knowledge. In simpler language, a content management system is a tool that helps you build a website without needing to write all the code from scratch (or even know how to code at all). WordPress and Magento are popular examples, but popular eCommerce platforms, such as Shopify, also have a CMS component.

Conversion funnel

A conversion funnel is a way to comprehend the flow of potential prospects into paying customers. Just as a funnel guides liquid or powder into a small opening, so too does a conversion funnel guide customers to complete the last step or final, desired action (a purchase or a conversion event).

Conversion rate

The percentage of website visitors who complete a desired goal out of the total number of visitors is referred to as the conversion rate. This could include subscribing to your newsletter, purchasing a product, or contacting your team.

Conversion rate optimization (CRO)

Conversion rate optimization is the process of increasing the number of conversions by implementing various tactics. These could include changing the page's design, adding a CTA, or changing the copy and visuals.

Cost of Goods Sold (COGS)

Cost of Goods Sold is the direct costs incurred by a company while selling its goods/services.

Cost of Goods Sold = Opening Stock + Purchases (in current period) - Closing Stock

Coupons

Coupons or coupon codes are the key to unlocking a discount. The customer gains access to a specific discount by using a coupon. When you advertise a 50 percent discount, for example, you provide people with a 50OFFNOW code to use to receive the discount.

Different coupons can apply the same discount, but some may work better than others - people simply respond better to an offer presented in a specific way. That is why it is critical to monitor the performance of your coupon codes.

CTIA (Cellular Telecommunications Industry Association)

CTIA is a trade association in the United States that represents the wireless communications industry. The organization was founded in 1984 and is based in Washington, D.C. It is a 501(c)(6) nonprofit membership organization that represents wireless carriers and suppliers, as well as wireless product and service manufacturers and providers.

CTIA runs wireless industry certification programs and publishes wireless industry surveys. It has also supported a number of public service wireless initiatives.

Until 2004, it was known as the Cellular Telecommunications Industry Association, and then as the Cellular Telecommunications and Internet Association. Since then, the organization has only used its initials, but has been known as CTIA – The Wireless Association until 2015.

CTR (Click Through Rate)

The click-through rate (CTR) is the ratio of the number of people who clicked on a specific link or call to action (also known as CTA, such as the 'Learn More' text at the bottom of an email marketing campaign) to the number of times the link was exposed to them (aka the number of impressions).

Here’s a simple click-through rate formula:

💡 CTR = (click-throughs / impressions) x 100

For example, if 100 people see an online ad and 5 click to learn more about the product, the ad has a CTR of 5%.

CTR can be used to assess the success of pay-per-click (PPC) search results (such as those generated by Google AdWords or other search engines), CTAs on a landing page, or hyperlinks in blog posts and email campaigns.

Why is CTR important?

CTR is an important metric because it helps you understand your customers; it tells you what works (and what doesn't) when attempting to reach your target audience. A low CTR could indicate that you're targeting the wrong people or that you're not speaking their language convincingly enough to get them to click.

Consider a paid search ad campaign that directs visitors to your website, e-commerce store, or landing page.

The CTR of an online advertisement indicates how effective the ad is at attracting potential customers; you can then compare ad copy, ad position, and CTAs to determine which has the highest CTR.

Customer Acquisition

Customer acquisition is the process of acquiring new customers for business or converting existing prospects into new customers. The importance of customer acquisition varies according to the specific business situation of an organization. This process is specifically concerned with issues like acquiring customers at less cost, acquiring as many customers as possible, acquiring customers who are indigenous and business-oriented, acquiring customers who utilize newer business channels etc. It can be free, as in organic search or social media presence, or paid, as in PPC, affiliate marketing, events, and so on.

Customer Acquisition Cost

Customer acquisition cost (CAC) is the marketing expense incurred when acquiring a new customer. In eCommerce, the first order is usually a loss because most brands rely heavily on advertising and influencer campaigns to acquire customers.

In general, if your CAC is too high, you're in a bad financial situation because you're not making enough profit on each sale. Long-term profitability is determined by balancing CAC and CLTV. For healthy margins, CAC should be kept below 30% of CLTV. This way, you'll be able to reinvest, grow, and even pay more for acquisitions if necessary.

CAC should be tracked by marketing channels to optimize ROI and avoid wasting money on ineffective channels.

Customer Churn

Customer churn (also known as customer attrition) occurs when customers discontinue using a brand's products or services over time.

Reduced churn and improved customer retention rates boost revenue and customer lifetime value for eCommerce and direct-to-consumer brands.

Conducting churn analysis is critical for understanding the causes of customer churn, determining where churn occurs in the customer journey, and developing solutions to improve customer retention.

Customer Cohort

A customer cohort is a group of customers who have something in common, which is usually the product, campaign, coupon, or source of their first order in eCommerce. Such segmentation is useful for tracking how these factors affect customers' shopping behavior and loyalty over time.

As a result, customer cohorts serve as the foundation for cohort analysis. It compares different cohorts to determine which products, marketing channels, offers, and so on convert the best leads into the most loyal customers. As a result, you can adjust your marketing and improve your retention rate and other retention metrics.

Other advantages of tracking customer cohorts include:

  • Monitor the development of special cohorts (e.g., holiday shoppers) and plan accordingly for the following year.

  • Fight churn before it happens - Discover new opportunities you didn't know existed such as a cohort shopping primarily at certain times of the year

  • Understand when people are more likely to convert again so you don't push them too hard before they're ready

Customer Database

A customer database is an organized record of all your customer data - contact information, orders, communication, on-site activity, and so on.

It automatically tracks and processes customer behavior to make it marketable. Individual customer behavior can be investigated in a customer database, preferably session by session.

It also allows you to target customers based on their characteristics and actions. An eCommerce CRM allows you to contact them directly from the same platform.

Customer Experience (CX)

The eCommerce customer experience is the sum total of impressions created and perceptions formed or changed during interactions with your brand at various touchpoints in the customer journey.

It comprises both online and offline interactions with your brand - From viewing display ads, to the look and feel of your digital storefront, the quality of support offered during shopping on your website to receiving timely post-purchase notifications.

Data Enrichment

The process of combining first-party data from internal sources with disparate data from other internal systems or third-party data from external sources is known as data enrichment.

Data that has been enriched is a valuable asset for any organization because it becomes more useful and insightful.

Regardless of the source, whether site traffic, social media, or email lists, customer data begins in raw form. Customer data is collected and stored in a central data store, where it is largely useless. Raw data is cleaned and structured before being supplemented with external data to add more useful information.

Data enrichment improves the utility of data by adding value to it. It assists brands in better understanding their customers and delving deeper into their lives.

Data Ingestion

The process by which a CDP allows you to collect data from every channel and platform where customers interact with your brand is known as data ingestion. This includes platforms that you own, such as your website and mobile app. Your advertising channels, as well as your email, CRM, and payment systems, are all included.

Additionally, the CDP allows you to collect customer data from your servers for increased reliability and accuracy.

Simply put, a CDP is most useful when it allows you to collect complete customer data from wherever your customers interact with your brand.

Data Integration

Customer data integration is the process by which CDPs make your first-party data useful to you. Customer data integration (CDI) is the process of combining and organizing customer data from various databases into a single, more usable and accessible format to improve analytical capabilities.

The CDP is the technology layer that connects your digital properties to customer data tools. This means that a CDP allows you to collect a master set of customer data and then activate that data in the tools on which your team relies.

The ability to easily route data to the tools you use is a core competency of a CDP. Once configured, your CDP allows you to easily turn on and off new integrations – consider your CDP to be the last integration you'll ever need to do.

When there is a barrier between two or more sets of data, this is referred to as a data silo. It keeps you from getting a complete picture and making accurate decisions based on your data.

To summarize, a CDP ingests and consolidates all raw data from offline and online sources, including cross-channel data.

Why is customer data integration required?

A CDP's ability to integrate customer data is critical. It enables more informed decision-making, improves business intelligence, provides a comprehensive view of your customer's journey, and enhances the customer experience.

A CDP will integrate with the software that your company uses to run its operations, such as Shopify, WooCommerce, Salesforce, AWS, Zendesk, Google Analytics, and so on.

The data is then aggregated and collated within all of these software/tools to provide value to your brand through unified data profiles of specific customers and customer types.

Data Orchestration

A CDP facilitates the orchestration, testing, and measurement of customer experiences across all touchpoints.

This includes orchestrating ad-hoc, triggered, and journey-based experiences in real time across all marketing, sales, and customer service channels, as well as configuring tests across any channel and measuring performance with customizable business metrics or machine learning algorithms that automate experience optimization.

In layman's terms, real-time data orchestration means that the CDP enables data optimization and analytics and sends only the relevant customer data required to achieve business goals to the appropriate touchpoints.

What is the purpose of data orchestration?

An orchestration-enabled CDP can connect to multiple interactions across any channel in real time by combining offline and online data to form unique customer journeys.

This customer journey mapping feature allows you to visualize individual customer journeys across multiple channels while learning about their interaction preferences and the context of their actions.

All of this is done at scale, regardless of where your customers are in their journey, and provides detailed insights into how you can further personalize it.

Data orchestration is the process of dismantling data silos so that your data is not fragmented and can be accessed quickly.

Using automated triggers, you can decide what action to take based on the customer's real-time behavior. For example, you can set up an automated trigger to send an email and/or SMS to a customer if they abandon their shopping cart using any third-party tool.

D2C/DTC ( Direct - To - Consumer)

What is DTC (Direct To Consumer)?

D2C (Direct To Consumer; also written as DTC) is an eCommerce business model in which a merchant manufactures and sells their own products or services to consumers. This differs from other business models that allow for the use of third-party retailers or wholesalers. Direct-to-consumer brands typically have more control over their customer journey than traditional retailers because they have a direct line to customers with the DTC model, resulting in a more seamless and cohesive customer experience. The direct-to-consumer (DTC) model is becoming increasingly popular among online retailers looking to increase brand loyalty and customer retention.

Benefits of Direct-To-Consumer brands

DTC brands have complete control over the customer experience with this business model, including brand positioning, brand identity, product design, digital marketing, supply chain and shipping logistics, and more. Furthermore, they have direct access to customer data and feedback, allowing them to track product performance, customer satisfaction, and key metrics more effectively over time. As a result, DTC brands have the potential to outperform traditional brands in terms of customer experience because they have complete control over their entire process and can easily shift and adjust their offerings to suit their target audience.

Decoupled CMS

A decoupled CMS is a content management system architecture that separates or decouples the backend and frontend systems. In other words, there is one system for backend content creation and storage layer (or "body") and a separate system for frontend content delivery/presentation layer (or "head"). APIs (application programming interfaces) then connect these two elements to deliver and present the content across various devices and channels.

Headless CMS vs. decoupled CMS

The frontend and backend components of a traditional content management system, such as WordPress, are intertwined (or "coupled"). These elements are separated in a headless or decoupled CMS architecture, and content is delivered via APIs or a web service. However, a frontend component exists in a decoupled CMS, whereas there is no frontend component or presentation element in a headless CMS.

Which architecture is best for my company?

Each of these CMS solutions has advantages and disadvantages, so selecting the best one is entirely dependent on your company's needs and resources. A decoupled system, for example, typically necessitates more front-end developer work than a headless system. However, because the content creation layer and presentation layer are separated in a decoupled CMS, content editors can continue producing work while site redesigns or upgrades are taking place. While headless and decoupled content management systems can be more flexible and scalable for businesses, they can also be more expensive to build than a traditional CMS.

Destination events

Destination events are events or workflows triggered in a third-party application from the CDP.

Digital shopping cart abandonment

Digital shopping cart abandonment is when a potential customer starts a checkout process after adding at least one item in the shopping cart for an online order but drops out of the process before completing the purchase. Any item that is added to the shopping cart but never made it through the buying process is considered to be “abandoned” by the shopper.

Direct-To-Consumer advertising

Direct-to-consumer advertising (also referred to as DTC advertising) is the marketing of products or services directly to potential customers. Typically, direct-to-consumer advertising refers to marketing efforts made in industries where a middleman is involved. However, with the growing direct-to-consumer e-commerce movement, this term is sometimes used more broadly to describe the marketing and advertising efforts of any brand that is directly enticing consumers to purchase.

Examples of DTC advertising

In the traditional sense of the term, one of the most common examples of direct-to-consumer advertising is in the pharmaceutical industry, where drug manufacturers try to reach consumers with prescription drug advertising. With these prescription drug ads, the goal for pharmaceutical companies is to use their direct-to-consumer ads to educate consumers about their products and start a conversation between patients and their physicians, since a prescription from a physician is required to make the sale. Other examples of DTC advertising include diagnostic tests and financial services, or ads that aim to target consumers directly, rather than big-box retailers who purchase, then sell the products themselves.

Discount code

Discount codes are personalized or publicly-released codes offered to customers as a purchasing incentive that reduces the price of an order. Discount codes can be an effective means for eCommerce stores to attract shoppers and encourage repeat customers.

How to build an effective Discount Program?

A link can be placed at the point of checkout for the consumer to click and receive a discount code to apply to purchase, or a link to click which will send the consumer to a discounted section. There can also be a link for the consumer to print a coupon offering additional savings. To achieve maximum results from your discount program, spread the word about it via your company's website and social media accounts. In addition, make sure to reference discount code availability in any SEM campaigns you run.

Disintermediation

Disintermediation is the process of cutting out one or more middlemen from a transaction, supply chain, or decision-making process.

Example - Cryptocurrencies are disintermediating the financial sector and government from monetary transactions.

Domain key

Domain keys are encrypted domain-level authentication standards designed to validate an email and its contents. They are used for the verification of the domain used in the ‘from’ or ‘sender’ header.

Dropshipping

Dropshipping is an order fulfillment option that allows eCommerce businesses to outsource procuring, storing, and shipping products to a third party—typically a supplier.

Example - Shopify, Amazon, Flipkart, Alibaba, etc use dropshipping.

DMARC

DMARC stands for “Domain-based Message Authentication, Reporting & Conformance”. It is an email authentication, policy, and reporting protocol. DMARC helps maintain the integrity of your website and domain by keeping it from malicious hacker activity such as spoofing and phishing.

DTC eCommerce

DTC eCommerce (direct-to-consumer eCommerce; also referred to as D2C eCommerce) is a business model where merchants sell their products and services online, directly to their end customers, rather than involving third-parties, like wholesalers, distributors, and large online marketplaces.

Dunning

Dunning refers to the communication a company sends out to remind its customers to update their payment details when a credit or debit card payment is declined. Dunning is used as a tool to help reduce involuntary customer churn, thus increasing customer lifetime value. It is a particularly useful tool for subscription eCommerce stores, where customers are not entering payment information with every charge—this runs the risk of the recurring payment details becoming out of date over time. This collection process involves escalating degrees of intensity, typically involving the following iterative steps:

  • Phone calls made to customers, gently reminding them of payments due

  • Formal letters requesting payment

  • In-person visits demanding payment

  • Hiring third-party collections agencies to lean on delinquent customers

  • Threatening legal action

  • Executing litigation

DMP (Data Management Platform)

A DMP, or data management platform, is a software tool used primarily in advertising and marketing to build profiles of anonymous individuals, store summary data about each individual, and share their data with advertising systems.

A DMP can be a useful tool to have when building your marketing strategy. It’s certainly a good first step to becoming a more data-driven marketer. But it works better as part of an ecosystem, not as a stand-alone solution. Let’s compare with a similar-sounding platform that is often equated to a DMP: the Customer Data Platform, or CDP.

DMP

CDP

Data Management Platform

Customer Data Platform

DMPs are focused on anonymized audience data, it is built for audience segmentation.

CDP is built for all types of customer data as it is for building a comprehensive, 360-degree view of named, individual customers.

DMPs don’t store first-party data or personally-identifiable information (PII). They are generally cookie-based and rely on anonymized data to create audience segments.

CDP can aggregate data from a host of different sources, including first-party data and PII. CDPs are built with security and privacy features that make them a safe repository for individual customer data.

DMPs retain data for just 90 days.

CDPs rely on long-term data retention to build robust customer profiles (thus the extra security).

Ecommerce conversion rate

The ratio of transactions to sessions expressed as a percentage. For example, a ratio of one transaction to every ten sessions would be expressed as an eCommerce Conversion Rate of 10%. When benchmarking conversion rate we think it's important to explain to marketing managers that they should go beyond headline conversion rates to segment conversion by different types of visitor.

Ecommerce conversion rate = the number of conversions / the total number of visitors.

Ecommerce platform

An eCommerce platform is a digital solution for merchants to sell their goods and services to customers over the internet. Today, eCommerce platforms do more than just provide a place to feature your products. Equipped with various integrations, these platforms help manage the marketing, sales as well as operations of a business.

Popular eCommerce platforms for SMBs include:

  1. Shopify

  2. Wix

  3. Squarespace

  4. BigCommerce

  5. WooCommerce

Email deliverability

Email deliverability is the ability to deliver emails to subscribers’ inboxes. It is what some marketers use to gauge the likelihood of their email campaigns reaching their subscribers’ inboxes related to actual delivery–like ISPs, throttling, bounces, spam issues, and bulking.

Email Engagement Rate

Engagement refers to the measurement of opening or clicking on emails. you arrive at your engagement rate. With this data point, you can get a better picture of how many emails are being ignored.

Email Engagement rate = the total number of clicks and opens / the total number of emails you have sent for a campaign.

Email Service Provider (ESP)

Email service providers (ESP) enable marketers to run email campaigns by providing them with a platform equipped with email marketing tools. ESP capabilities cut across creating and modifying subscriber lists, designing email templates, tracking campaign analytics and so on. Popular ESPs include:

  1. Mailchimp

  2. Sendgrid

  3. Hubspot

  4. Drip

  5. Salesforce Pardot

ETL (Extract, Transform, and Load)

ETL (extract, transform, load) is a process your data has to go through before you can analyze it. The first step is to pull the data from several sources, then transform it into a new format, and finally import it into a data warehouse.

First-Party Data

First-party data is the firsthand information about the audience of a company. It is more valuable than less direct information collected from other parties and can be used to improve marketing, sales and product development efforts. Some effective ways of collecting First Party Data are:

  • User Registration

  • Single Sign-On (SSO)

  • Progressive Profiling

  • Event Based Tracking

  • Content Sharing

  • Surveys and Polls

  • Customer Feedback and Reviews

Forms

Forms are a handy way to collect zero-party data from customers and visitors to your eCommerce website. Once integrated with your eCommerce website, they can be used to collect reviews, place orders or make payments. Popular tools used for this purpose include:

  1. Typeform

  2. SurveyMonkey

  3. Formstack

  4. FormAssembly

  5. Microsoft Forms

Free shipping

Free shipping is a marketing and sales tactic that is primarily geared toward consumers who shop online. By eliminating shipping costs on eligible items, online retailers incentivize customers to purchase those products. Free shipping is a great way to encourage customers to spend more. For example, offer free shipping on orders over $100.

Fulfillment

Order fulfillment is the series of steps taken while receiving, processing, and delivering orders to a customer. Typically, eCommerce businesses outsource fulfillment to a third-party logistics company (3PL) to utilize one or more of the following benefits:

  1. Achieve business scalability across multiple geographies

  2. Improve customer experience and satisfaction

  3. Drive cost savings

  4. Hand-off inventory and warehouse management to experts

  5. Provide customers with more delivery options

  6. Speedy delivery

GMV (Gross Merchandising Value)

GMV (gross merchandise volume; also referred to as gross merchandise value) is a metric that refers to the total value of merchandise sold over a given period of time through a customer-to-customer (C2C) exchange site. It is a measure of the growth of the business or the use of the site to sell merchandise owned by others.

GMV = Total Sales * Price of the product

Here's an example for your reference. eBay sold 100 goods at $5 eBay's GMV would be 100 X $5 = $500. On the other hand, Etsy sold 80 goods at $4 Etsy's GMV would be 80 x $4 = $320.In this example, eBay charges a fee of 2%, and so it would bring in $10 ($500 x 2%). Etsy, on the other hand, charges a higher fee: 4% in this example. Etsy would bring in $12.80 ($320 x 4%). In this example, Etsy actually performed better because it brought in higher take-home revenues.

Gamification

Gamification describes the incentivization of people's engagement in non-game contexts and activities by using game-style mechanics.Gamification is a fun, yet often overlooked method of solving some of the most common yet challenging eCommerce hurdles.

Geotargeting

Geotargeting refers to the practice of targeting visitors online with localized or location-appropriate content based on a visitor’s geographic location. Geotargeting is often deployed by online businesses for offsite digital marketing purposes, or in order to provide a more relevant onsite experience for each visitor.

Examples of well-orchestrated Geotargeting campaigns can be seen by fashion retailers who personalize their Display Ad campaigns and onsite experience based on a visitor’s local weather conditions, i.e. highlight or promote ski and ice sports items for visitors near ski resorts in very cold climates, and swimwear for visitors in tropical areas with warm weather. The same online retailer will make sure to notify visitors that items can be purchased and shipped directly to a visitor’s location, specified dynamically.

Headless Commerce

Headless commerce is an eCommerce architecture where a store’s front-end is separate from the back-end. Headless commerce allows online stores to have more flexibility with customization, the front-end can be updated without touching the backend.

Headless CMS

A headless CMS is a content management system that manages and organizes content without a connected front-end or display layer. The headless CMS is where all of your content and assets live. Then, you use a content API to distribute that content to anywhere and everywhere you need it — your website, your mobile app, your email marketing, your CRM, etc.

Benefits of Headless Content Management Systems:

Managing content without the frontend display layer, or front-end, facilitates an omnichannel approach to content delivery. Content can easily be displayed across any platform or device, including websites, mobile devices, mobile apps, voice assistants, and more without impacting the user experience. This approach to content management also improves the developer experience, facilitating easier third-party integrations and certain updates, like adjusting the content for new devices.

Historical Ecommerce Data

Historical eCommerce data are all data points since your eCommerce site went live. It includes all sales, marketing, customer, and other data. It’s important to use an eCommerce analytics tool that makes this all-time data available and usable because, first, it’s yours, and second, it is insanely valuable for your marketing.

For example, visitor sessions from day 1 can be very useful when the visitor registers with an email and you can reach them now, using the behavioral insights you get from their browsing your site - what categories they’re interested in, where they’re located, etc.

Hard & Soft Email Bounce

A hard bounce is an email that couldn't be delivered for permanent reasons. Maybe the email's a fake address, maybe the email domain isn't a real domain, or maybe the email recipient's server won't accept emails. A soft bounce is an email that couldn't be delivered because of temporary reasons. An inbox may be full or the email file might be too large, among other reasons. If they get a soft bounce on an email send, most email providers will continue to try to deliver the email over the period of a few days. You should keep an eye on these addresses -- if you notice that the same ones are popping up over and over again, it's best to remove them.

Identity Resolution Engine

Identity resolution engine is that module of a CDP that enables the process of attributing customer behavior and interactions with your business — across all touchpoints, platforms, or channels — to a single unified customer profile.

Identity resolution allows any team across your organization to then access this profile and use it to better serve each individual customer.

Inside an Identity Resolution Engine

Involuntary churn vs Voluntary Churn

Involuntary means customer churn is due to payment failure, or some other method not related to your business. Voluntary churn is the act of customers initiating the exit. Maybe they’re not happy with the product, or not receiving the value they thought they would.

In order to decrease Voluntary churn, you can Offer a ‘pause’ option instead of cancellation. You could even offer the option to ‘skip a month’. Also, Discounted rates are attractive to customers, and fewer transactions/renewal cycles reduce churn opportunities. Make sure your subscribers understand that they have options beyond simply canceling their subscriptions. Often, subscribers are simply looking for a short-term break from their subscription due to circumstances like financial constraints or travel.

To decrease Involuntary Churn, we can start sending customers emails during the dunning cycle as an important measure to get them to update card information. Linking directly to an in-app ‘manage subscription’ page is a best practice, as it ensures there’s no friction in the update process. As long as the subscription is past due, never go more than a few days without providing guidance on how to update card information.

Keyword

A term or phrase for describing an object or element to trigger search results.

KPI (Key Performance Indicator)

KPI or Key performance indicator is a quantifiable metric used to track the performance of a specific objective over time, typically measured against a target value. KPI deviations can be tracked and analyzed to trace the impact of contributing events.

KPIs should be constantly monitored to identify areas of business improvement and also optimized to be aligned with the business’ objectives and the operating context.

Critical KPIs for eCommerce businesses include:

  1. Conversion rate (CR)

  2. Customer lifetime value (CLV)

  3. Customer acquisition cost (CAC)

  4. Retention rate (RR)

  5. Average order value (AOV)

  6. Net profit

  7. Cart abandonment rate

Lifetime value and LTV calculation

Lifetime value (also referred to as Customer Lifetime Value or CLTV) is the total revenue earned from a single customer over their entire lifetime as your brand’s customer.

It can be tracked, as it happens, if you have eCommerce analytics tracking in place:

CLTV = Order 1 + Order 2 + Order 3 ……

Or, it can be estimated with these formulas:

CLV = Total Revenue / Total Number of Customers

CLTV = AOV x Average number of orders per customer

CLV = AOV x order frequency per month x lifespan

Customer lifetime value is significant because the higher it is, the higher the return on marketing investment. Every subsequent order compensates for the initial acquisition cost.

A high CLTV also indicates that people like your products and buy from you frequently. So you don't have to constantly go out and find new customers to generate sales. Working for CLTV entails boosting customer retention.

Market demand

Market demand describes the demand for a given product and who wants to purchase it. This is determined by how willing consumers are to spend a certain price on a particular good or service. As market demand increases, so does the price. When the demand decreases, prices will go down as well. Market demand is the total of what everyone within a specific industry desires and can help guide merchants when building an eCommerce site. On the other hand, if we look at price as a base, If price increases Market Demand will decrease and vice versa.

Merchant Account

A merchant account is a type of business bank account that allows a business to accept and process electronic payment card transactions. Merchant accounts require a business to partner with a merchant acquiring bank that facilitates all communications in an electronic payment transaction.

Mobile commerce

Mobile commerce, also known as m-commerce, involves using wireless handheld devices like cellphones and tablets to conduct commercial transactions online, including the purchase and sale of products, online banking, and paying bills.

M-Commerce vs. E-Commerce:

Electronic commerce (e-commerce) refers to the buying and selling of goods and services over the internet. E-commerce may be conducted via a desktop computer, laptop, smartphone, or tablet. However, e-commerce is typically associated with a computer in which a user has to find a location with an internet connection.

Conversely, m-commerce specifically refers to transactions done via a smartphone or mobile device. With m-commerce, users can transact anywhere provided there's a wireless internet provider available in that area.

M-commerce transactions tend to be done with a few clicks, while e-commerce done via a tablet, laptop, or desktop might involve more time and exploring a company's website.

Monthly recurring revenue (MRR)

Monthly Recurring Revenue (MRR) is the predictable total revenue generated by your business from all the active subscriptions in a particular month. It includes recurring charges from discounts, coupons, and recurring add-ons, but excludes one-time fees.

MRR = Number of subscribers under a monthly plan * ARPU (Average Revenue per user)

Monthly subscription

In a monthly subscription, a customer enters into an agreement with a business where they pay a recurring monthly fee in exchange for products or services. This might involve a monthly box of physical products, a monthly membership, or access to gated content that renews on a monthly basis. Though monthly subscriptions are among the most popular cadences for subscriptions, many businesses also offer options for a weekly, bi-weekly, or quarterly subscription service. Some businesses also offer annual subscription services, as well as subscriptions on a custom interval.

What types of monthly subscription boxes exist?

A monthly subscription box can take many different forms. Some fall under the curation box subscription model, where the merchant selects an assortment of products for monthly delivery. These often take the form of a themed box, such as a monthly summer clothing box, a monthly box of natural beauty products, or a monthly, seasonal box of self-care products. Other monthly box subscriptions may fall under the replenishment model, where the same products—like razors, fresh flowers, or coffee—are sold with each delivery.

Net promoter score

Net Promoter Score (NPS) is a measure used to gauge customer loyalty, satisfaction, and enthusiasm with a company that’s calculated by asking customers one question: “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague?” Aggregate NPS scores help businesses improve upon service, customer support, delivery, etc. for increased customer loyalty.

NPS = % promoters - % detractors

Promoters

A promoter in NPS is anybody who answers the ‘how likely are you to recommend this product/company to a friend or colleague?’ question with a score of 9 or 10. As your most enthusiastic customers, promoters are likely to stick with you and act as your brand ambassadors, which in turn helps fuel growth.

Detractors

A detractor in NPS is anybody who answers the ‘how likely are you to recommend this product/company to a friend or colleague?’ question with a score between 0 and 6 (included). They’re obviously not your biggest fans. But it’s worse than that: not only are they not likely to recommend you to others—they are the first candidates for leaving you and might even actively discourage other people away from your product. One of your main goals is to make sure you have fewer detractors.

Net revenue retention

Net revenue retention is the percentage of recurring revenue from existing customers you retained over a given period.NRR considers customer upgrades, downgrades, and churn to show how much your business could continue to grow from your current customer base alone, without acquiring any new ones. NRR does not include new customers.To calculate net revenue retention, we need to have following 4 different values:

  1. Monthly recurring revenue of the last month (A)

  2. Revenue generated through upgrades and cross-sells (B)

  3. Revenue lost through downgrades (C)

  4. Revenue lost through churn (D)

So, the formulae for calculating net revenue retention rate is: NRR = (A + B – C – D) / A

For example, let’s assume company A had a monthly recurring revenue of $50,000, they expanded their business through upgrades and cross-sell at $5000. Few of their customers downgraded which resulted in a loss of $2000 and another $1000 in churn.`

So, NRR = (50,000 + 5000 – 2000 -1000) / 50,000 = 104%

This shows that the company is still growing after the losses incurred through churn and downgrades. This phenomenon is called net negative churn.

Omnichannel Marketing

Omnichannel is a cross-channel content strategy used to improve the customer experience and drive better relationships across all possible channels and touchpoints. This includes traditional and digital channels, point-of-sale, and physical and online experiences. Examples of omnichannel marketing include:

  • A customer receiving an SMS message about a sale or promotion while shopping in-store

  • A customer receiving a cart abandonment email after browsing a website and adding a product to their online shopping cart

  • A customer receiving retargeting ads for abandoned cart products they added in-app

Omnichannel marketing

Multichannel Marketing

Omnichannel marketing is 100% customer-centric. It uses a data-led, AI-driven approach to understand complex data points such as customer behavior, preferred channels and lifecycle stage which messages to send to which customers through which channels at what times. The result is a seamless, deeply personalized customer experience that has a much higher probability of driving sales.

Multichannel marketing refers to using more than one channel to execute campaigns. This is often done manually on a channel-by-channel basis. Content with little to no differentiation or personalization is published in every available channel with rudimental segmentation on a ‘quantity over quality’ basis.

One-time purchase

A one-time purchase is when a customer makes a single purchase of a product or service via a one-time payment. For example, buying the latest version of your favorite sneakers via a one-time fee falls under the one-time purchase category, while paying monthly fees in exchange for a gym membership falls under the recurring purchase category. Often, on an eCommerce site, one-time purchase options are displayed alongside subscription options for certain products, giving customers the flexibility to choose the option that best fits their budget and other needs.

Combining one-time purchases & subscriptions

Although a one-time purchase option differs from a purchase made via subscription, subscription brands will often combine the two billing strategies within their business model. When subscription brands offer one-time purchase options to their customers as a supplement to their existing subscriptions, this strategy is known as cross-selling. This tactic can increase average order value (AOV), customer lifetime value (LTV), and customer satisfaction by giving subscribers greater flexibility over their purchasing experience and providing them with targeted product recommendations.

Open rate

Open rate is the percentage of emails that were opened out of all delivered emails. Tracking fluctuations in email open rates is a useful indicator of the impact of your email marketing campaigns.

Open rates vary by industry. For the eCommerce space, open rates are typically around 15% according to Salecycle.

Order fulfillment

Order fulfillment is the steps a business takes to deliver orders to customers. The order fulfillment process begins with receiving customer orders. In between, the complete process can include sending order confirmation emails to customers, locating items in warehouses or fulfillment centers, managing the shipping process, sending the customer tracking information about their purchase, and more. Optimizing your order fulfillment strategy plays a key role in increasing customer satisfaction, boosting customer retention, and driving revenue for your business.

Order management

Order management is a process used by businesses to digitally manage the entire lifecycle of a customer’s order. The typical order management process begins when a customer places an order, and ends when the customer receives their purchase. In between, the order management process includes other essential operational functions such as order processing, inventory management (including inventory visibility), sales, order fulfillment, and returns. Because order management is so closely tied to customer satisfaction, it is an essential consideration for customer relationship management.

Order management systems (OMS)

OMS are everything that happens after the buy button. This includes downstream operational processes, people, systems, and partnerships to fulfill an order. It’s a platform for managing orders, customer records, fulfillment, inventory visibility, payments and invoicing, and customer care.

Order processing

Order processing is a key element of order fulfillment that occurs on the business end after a customer places an order. It begins when a business receives an order, and ends when the order is shipped. Several aspects of inventory management, including batch picking, as well as shipping, packaging, and sorting inventory, fall under the order fulfillment process. Depending on the size and nature of the business, order processing can be conducted by a single individual, or it can occur in order processing operations like distribution centers or warehouses. By handling order processing efficiently and accurately, businesses can decrease the amount of time it takes to fulfill customer orders.

Partial shipping

A partial shipment is the fulfillment of a single order in more than one delivery. In other words, when a customer makes a purchase of multiple products, they are delivered in multiple shipments rather than all at once. Having partial shipping capabilities can improve the customer experience when an entire order is not able to be fulfilled at one time. For example, if certain items are back-ordered or delayed but not others, or if certain items could be delivered more quickly if sourced from different warehouses, partial shipments allow the customer to receive each item in the order as soon as it is available. Partial shipping should not be confused with partial truckload shipping or less-than-truckload (LTL) freight shipping, which are separate shipping logistics processes.

PIM (Product Information Management) Platform

Product information management (PIM) is the process of managing and enriching product information and related digital assets across different teams to provide an engaging product experience and successfully sell the product across multiple sales and marketing channels. A PIM solution is a master-data-fueled, process-driven application for collaborating on product content. It serves as a single, central platform to collect, manage, govern and enrich product information and content and distribute it to marketing, sales, and eCommerce channels.

Platform Integration

Platform integrations refer to the various applications that can be connected to the host platform with the provision to import & access data from those applications.

Integrations can be identified based on the connector type which are categorized based on the purpose served. These categories include:

  1. Ecommerce platforms

  2. Shipping

  3. Advertising

  4. Customer Experience (CX) & retention apps

  5. Support

  6. Subscriptions

  7. Returns

  8. Marketing

  9. Forms

The information fields below can be used to track the health of the integration:

  1. Source and destination of the data

  2. Source events - Number of Events coming in from Integration

  3. Created at - Timestamp at which the integration was created

  4. Last updated at - Timestamp at which the last update in the integration was made

  5. Status - Status of the integration - Active or Inactive

Point of Sale (POS)

Point of sale is the time and place where the customer makes a payment in exchange for a product or service. This transaction can take place online or offline. These transactions are best tracked with the help of POS software that has multiple benefits:

  1. Manage store operations, inventory

  2. Track sales

  3. Manage customer relationships

Post-Purchase Email Engagement

Post-purchase email engagement is a form of customer engagement specifically after an order has been placed. It is an important part of customer retention strategy because any customer who has placed an order is much more valuable than a prospect.

The purpose of post-purchase engagement is to help buyers enjoy their items, to make them remember the brand and shop again. It enhances the shopping experience by helping customers use the products better and more - this adds value to the purchase. The insights on the customer’s behavior help create tailored emails that fit well with the person’s needs and interests.

The more you know, the more you can do with post-purchase engagement:

  • Keep them interested with content

  • Offer special promotions

  • Use coupons they’d like

  • Invite them to a local offline event where you’ll take part

  • Ask for feedback

  • Open early pre-orders for a complementary product, etc.

Personalized marketing

Also known as one-to-one marketing, it is the practice of using data to deliver brand messages targeted to an individual prospect. This method differs from traditional marketing, which mostly relied on casting a wide net to earn a small number of customers. With billboards, cold calls, mailings, and more, traditional marketing emphasized the number of messages over their relevance. Later, analytics became more sophisticated and data on individual prospects grew.

Examples of the companies that use personalized marketing - Snapchat’s Bitmoji, Coca Cola, Amazon, Spotify, Twiddy, and many more.

Product Recommendation Email

A product recommendation email is a personalized email that includes handpicked products a particular user might be interested in. This type of email usually serves as a friendly reminder but it can also have some intrigue or a little tease that makes a user click on the CTA. It’s the equivalent of “try this, it’ll look great on you!” from a shop assistant.

In your product recommendation email, you can encourage a user to take another look at the items they already saw a week ago as well as related but alternative products. You can also take another approach and recommend selected items in relation to a certain occasion, a global event, or an important cause.

It’s not just straightforward promotional emails you can include specific products in. You can turn any type of email into an engaging product recommendation email:

  • welcome emails → “Thanks for joining us, here’s something for you”

  • recommendation → “You may also like X”

  • transactional emails → “You still have time to add these accessories to your order before we ship it”

  • recently viewed products → “We saw you looking at X”

  • new items in stock → “We know you’ve been waiting for this”

  • back in stock → “You’ve been asking for them, and now they’re back”

  • special offer → “Only for our devoted customers, only for the next 3 days”

  • seasonal offer → “A nice addition to your Thanksgiving table”

  • abandoned cart → “Still not sure? How about these top picks”

  • loyalty program → “You are one purchase away from the Premium level, here is how to get there”

  • customer appreciation → “Thank you for sticking with us, we’ve found something you’ll love”

  • re-engagement emails → “We miss you. Catch up on our current bestsellers”

Product Reorder/Product Replenish/Product Reminder Email

Product reorder/reminder/replenishment email is a type of email that urges customers to order a certain product. The assumption is that you know roughly how long a product lasts and remind customers to reorder before they run out of it. It works very well for everyday items like personal hygiene products, food and coffee, beauty, etc.

Replenishment emails should be used with caution as not to push the same offer too often. It can be tricky if your customers often buy more than one product as well. We recommend looking at your average time between orders and retention rate by product (in retention analysis) to choose some products to run a reorder campaign for.

Profiles

A profile contains all the essential details pertaining to a specific user/customer on your eCommerce store. A profile captures various sets of attributes, identifiers and events so you can understand each customer/user better.

Purchase Frequency

The purchase frequency (PF) represents the number of times a customer buys within a given period. The higher the purchase frequency, the more opportunities to offer outstanding customer experiences that turn repeat customers into loyal customers.

Purchase Frequency = Number of Orders / Number of Customers

QTD (Quarter to date)

Selection of a quarterly period in a year i.e. a time span of 3 consecutive months.

Quality score

Quality Score is a metric derived from Google ads. It is a measure of how impactful a keyword has been based on data from past ad auctions. Regularly review the keyword quality score to optimize your ad campaigns.

Repeat Customer Rate/Repeat Purchase Rate

Retention rate (also reorder rate or repeat purchase rate or repeat customer rate) is the share of customers who shop more than once from a DTC brand compared to the total number of customers.

Retention rate is a huge indicator of ecommerce performance as it measures:

  • How loyal customers are

  • How well your efforts manage to retain customersю

  • How much people like your products

Higher retention rate means higher ROI on acquisition costs paid. It also helps keep your cash flow predictable with regular customers.

The formula for calculating retention rate is:

RPR = Repeat buyers number/ Total number of buyers

Retention Marketing

Retention marketing refers to the set of activities designed to retain a business’s existing customers, reduce churn and increase the overall lifetime value.

To run a sustainable business, retention is an important part of the equation as is acquiring new customers. Today, consumers are increasingly becoming digital-first and are prone to switching brands more frequently as brands flood the eCommerce market. As a result, customer retention has become a major revenue driver and a source of competitive advantage for several ecommerce businesses.

Besides improving the bottom line, customer retention has other benefits such as increased brand loyalty that allows the company to gather honest feedback from its customers towards improving its products and services over time.

Rich media

Digital advertising that includes a variety of interactive elements such as gifs, moving images, videos, animations and audio so that viewers are able to engage and interact with them, is collectively referred to as rich media. This may include banner ads featuring product recommendations that when clicked take you to a website for purchase or video pop-ups featuring a promotional ad campaign.

Search Engine Optimization (SEO)

Search engine optimization refers to the activities undertaken to ensure that your webpages are found by search engines and ranked high in search results based on criteria such as keywords used, content relevance, site design and more. Search engine optimized eCommerce websites can:

  1. Revive organic traffic to your website

  2. Boost sales for your business

  3. Boost brand awareness

  4. Improve user experience

  5. Reduce acquisition costs

Second party data

Second-party data is data you acquire from a trusted partner. In most cases, you know the partner, which means you know the data quality and accuracy. You also know the data is relevant because it comes from a partner with whom you have a mutually beneficial relationship.

Equally important, your partner also complies with privacy regulations like the GDPR and the CCPA, so you can be confident the information was collected with the permission of the consumers in the dataset.

You can also buy second-party data by connecting with partners through data marketplaces. When you acquire data this way, you can discuss the data with the partner and select only the information you want. If you decide to go this route, you can be sure the marketplace is trustworthy, the partners you are connected with are reliable, and their data is collected and managed correctly.

Segment

In marketing, a segment constitutes a group of customers or potential customers with some type of shared characteristics. Broadly, segmentation can be of 4 types - demographic, geographic, psychographic and behavioral. Data for creating segments is often collected through surveys, in-depth and focus interviews and digital product analytics tools.

Shipping

Ecommerce shipping is the journey of a product from the time an order is placed to the time it is delivered at the customer’s doorstep. This journey may be broken down into 3 phases:

  1. Order processing: Verifying order data, checking and picking items from inventory for an order that has been placed online

  2. Order packaging: Packaging ordered items and labeling them with recipient’s address and order details

  3. Order delivery & logistics: Fulfilling the order through a carrier that transports the package to the recipient’s physical location

Businesses differentiate themselves by providing customers with a variety of shipping options. For example, Amazon provides same day delivery options to its member customers. Some businesses waive off shipping costs to their customers based on the total order value. For certain product categories such as expensive purchases, customer experience plays an important role in the shipping process.

Short code

Short codes are short digit sequences, typically 5-6 digits used for one way SMS messaging. Short code messages would typically expect the receiver to respond with a code (YES/NO/ACCEPT/DECLINE etc.) mentioned in the message. Short codes come in two varieties - shared and dedicated. Shared shortcodes as the name suggests are shared across businesses and differentiated based on a unique keyword attached to the source of traffic. Dedicated shortcodes are more expensive and assigned to a specific business.

Since short codes do not require a response they have higher acceptance by carriers, are less likely to go to spam and have higher delivery rates. They are best suited for getting subscriber opt-ins, surveys, sales promotions, notifications and alerts.

Social Proof

Social proof refers to the tendency to conform one’s behavior to the people around in certain social contexts. The manifestation of this behavior is a lever that marketing teams can utilize to build trust and gain credibility for a business. A common example of social proof is the showcasing of testimonials on a business’ website or 5-star product ratings.

SMS

SMS stands for Short Messaging Service that allows for sharing text messages between mobile devices and also telephone and internet systems. 300 KB is regarded as the largest size carriers will reliably handle. SMS is a widely used marketing channel for alerting customers about product arrivals, promotional campaigns and even tracking every step of the product shipment process.

Source events

Source events are events recorded on external integrations to the CDP.

Third-party data

Third-party data is data you acquire from a data aggregator. Data aggregators do not collect data directly but obtain it from other companies and compile it into a single dataset. As a result, the data can come from many different data sources, some large, others small, and there’s not always a clear definition of the audience that data comes from.

Most third-party data is purchased through a DSP (demand side platform) or a DMP (data management platform) for advertising. There are also many third-party data marketplaces, including Acxiom, Nielsen, Google, and OnAudience.

Touchpoint

A touchpoint is an interaction that might alter the way that your customer feels about your product, brand, business, or service. It can happen before, during, or after a purchase.

Customer touchpoints refer to key moments of connection between your business and your customers during the shopping journey. It starts when a customer first discovers your online store/app, right up to the moment when they receive their order – and beyond.

Triggered email

Triggered emails or automated emails are sent whenever a subscriber engages with your brand’s online presence. These emails are triggered as part of a larger ‘workflow’ which is a series of automations designed after the steps a customer is likely to take at different stages in the buyer journey.

Email marketing automation tools come packaged with a plethora of options for designing email templates for automation so that they can be personalized for each recipient. Triggered emails not only save time and effort, but also accelerates scalability of the business while shortening the sales process.

Traffic

Traffic in eCommerce refers to the visitors to your store/website footfall or viewership. This metric is critical for gauging the health of your business as without website traffic, no purchases will be made from your digital storefront. More traffic is synonymous with more customers for your eCommerce business.

Transaction

In eCommerce, a transaction is the exchange of goods or services between a buyer and a seller through a digital medium. Ecommerce platforms consist of integrations that enable secure collection of payments every time a purchase is made, offering customers a variety of flexible options to make payments as per their convenience.

Unified Customer Profile

A unified customer profile helps marketers understand the entire customer journey and accurately build audiences to drive hyper-personalization. Customers expect that you accurately understand their history and real-time behavioral and transactional data when you communicate with them, irrespective of the channel.

Building a unified customer profile is enabled by a CDP (Customer Data Platform) that pulls data from all your various systems and touchpoints (transactional history, customer service interactions, IoT data from their smart devices, etc.), cleanses and organizes that data, and then combines it into a single view via a customer identity resolution engine.

UTM (Urchin Tracking Module)

Urchin tracking modules or UTMs are codes attached to the end of the URL of a website. UTMs function as handles for tracking information such as traffic source, medium (email or social media), search terms etc. UTMs are a key feature utilized by Google Analytics for collecting information on the performance of your marketing campaigns across various channels.

Upselling

Upselling is a marketing tactic for increasing the average order value placed by a customer and growing sales. Upselling can be used to provide greater value to the customer by encouraging them to make a higher quality purchase. For example - you may encourage customers to opt for a higher value purchase while they compare products or at the time of checkout. Additionally, you may upsell by bundling the product with other complementary products.

Void

A void transaction is one that is canceled by the seller before the amount is debited and processed from the customer’s account.

Website analytics

Website analytics involves tracking and optimization of an eCommerce website’s performance to drive more traffic to the website and lead potential customers to make a purchase. This also includes improving the user experience of website visitors across multiple devices.

Zero-Party Data

Zero-party data is information from customers they voluntarily and deliberately share with your business. It may include contact information, preference data, purchase intentions, and how an individual wants to be recognized by the brand.

Zero-party data is revolutionizing how businesses interact with their online customer base, creating strong shopper engagement, retention, and loyalty. It is essential to start laying the framework to collect zero-party data to navigate the future of online data collection, which is currently on the precipice of significant change.

ZMOT (Zero Moment of Truth)

The ZMOT refers to the moment in the buying process when the consumer researches a product before purchase.

A simple customer journey map may look like this:

  1. Your consumers discover your products/new products through social and display ads.

  2. They start with the generic product, category, or local searches to compare options.

  3. When they’ve narrowed their list, they may do brand-related searches and seek reviews or referrals from friends.

  4. They may sign up for emails from the brands they’re evaluating to access discounts and promotions.

  5. Finally, they make their purchase directly through your eCommerce site or app.

Note how the majority of the buying decision may have happened before a consumer lands on your site or even discovers your brand/products, and yes, they may interact multiple times with multiple touchpoints.

If you have any further queries, please write to us at [email protected] and we'll get back to you at the earliest.

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