Annual Contract Value (ACV)
Annual Contract Value is the average annualized revenue per customer contract. It excludes any one time fees. For example, if you had one customer who signed a two year contract for $30,000, then, your ACV is $15,000.
Average Deal Size
Average Deal Size is a metric showing the average amount of money clients spend on your product or service.
Annual Recurring Revenue (ARR)
ARR is a subscription economy metric that shows the money that comes in every year for the life of a subscription (or contract). ARR is recurring revenue or predictable revenue that can be counted on every year.
Call to Action (CTA)
A button, a link, or an image that encourages a website visitor to take action. That action can be anything, from visiting a landing page to downloading a piece of content.
Customer Acquisition Cost (CAC)
CAC refers to the resources that a business must allocate (financial or otherwise) to acquire a customer.
Channel
The way in which a vendor communicates with and sells products to consumers.
Channel Partners
This term is used to describe a company that partners with a manufacturer or producer to market and sell the manufacturer's products, services, or technologies. Channel partners may be distributors, vendors, retailers, consultants, system integrators, technology deployment consultancies, and value-added resellers (VARs) and other organizations.
Click Through Rate (CTR)
The percentage of your audience that responds to the CTA, taking the next step in your marketing campaign. CTR is calculated by dividing the number of clicks that a page (or CTA) receives by the number of total opportunities for clicks.
Contact
A person who exists within the marketing/sales funnel of a company but who's exact stage in the sales process is unknown.
Cost-Per-Click (CPC)
The amount of money spent to get one click from digital advertising. CPC is a metric used to measure the cost effectiveness of your campaign. To calculate CPC, divide the total cost of your marketing campaign by the number of clicks you received.
Cost-Per-Thousand (CPM)
CPM is a pricing model for digital advertisements where ad space is purchased 1000 impressions at a time. Publishers only need to show the ads to consumers to get paid. CPM is most effective when trying to increase brand awareness.
Cost-Per-Lead (CPL)
CPL is a term used in digital advertising. It shows how much one lead costs from a digital ad. CPL is very similar to cost-per-click (or cost-per-action) but is more specific. For an action to qualify as a lead, they need to sign up for something on the advertiser’s website.
Conversion Rate (CR)
The conversion rate is the percentage of users who take a desired action.
Global System Integrators (GSI)
GSI is a company that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as system integration. They also solve problems of automation.
General Data protection Regulation (GDPR)
Regulations mandating data privacy laws for residents of the European Union (EU). The regulation protects EU residents’ personal data online. This means that companies must provide protection for this data. Data within EU countries and data exported outside of the EU.
Independent Software Vendor (ISV)
An independent software vendor (ISV) is an individual or business that builds, develops and sells consumer or enterprise software. Although ISV-provided software is consumed by end users, it remains the property of the vendor.
Key Performance Indicator (KPI)
Metrics that demonstrate how effectively a company is achieving key business objectives. KPIs vary between organizations based on objectives, marketing channels, and the overall level of marketing maturity.
Lead
A person who has indicated interest in your company's product or service.
Marketing Development Fund (MDF)
Marketing development funds are funds made available by a manufacturer or a brand to help affiliates, channel partners, resellers, VARs, or distributors, etc. to sell its products and create local awareness about the national brand.
Managed Service Providers (MSP)
Companies that deliver network, application, system and e-management services across a network to multiple enterprises. A “pure play” MSP focuses on management services as its core offering. In addition, the MSP market includes offerings from other providers — including application service providers (ASPs), Web hosting companies and network service providers (NSPs) — that supplement their traditional offerings with management services.
Marketing & Sales Pipeline
Marketing and Sales Pipeline refers to the stages that your sales representatives go though to convert a lead to a customer.
Monthly Recurring Revenue (MRR)
MRR is the amount of money paid monthly for subscriptions for your product or service. Calculated as a dollar amount that represents all recurring revenue, MRR normalizes for various subscription terms (like different pricing plans and billing periods) to give you a consistent value that you can track. MRR gives you a clearer perspective of your business’ health and trajectory.
Marketing Qualified Leads (MQL)
Generally defined as a prospect who has become a lead by filling out marketing offers that indicate a high-level of interest in the company’s products or services, for example, a survey. These should be defined and agreed upon by your marketing and sales teams.
Original Equipment Manufacturers (OEM)
Pay-Per-Click (PPC)
Pay-Per-Click is a model of digital marketing where advertisers pay a fee every time somebody clicks one of their ads. It’s a method of paying for visitors to your site, one that is very different from SEO and earning traffic through organic methods.
Prospect
Generally a website visitor who has either signed up to receive your company newsletters/emails/blog updates.
Sales Qualified Leads (SQL)
Generally defined as a marketing qualified lead that is deemed by the sales team to be ready for contact after thorough research and investigation. Your sales and marketing teams need to work together to identify which triggers should to be put in place to identify the transition between MQL and SQL.
Search Engine Optimization (SEO)
A mixture of strategy, techniques, and tactics used to increase the number of visitors to your website. The goal of SEO is to rank higher on a search engine’s results page (SERP) for a particular keyword. The higher your website ranks, the more traffic is (generally) generated.
Search Engine Results Page (SERP)
The results page on a search engine, generated after a keyword search. The goal of SEO is for your website to place as high as possible on the SERP.
Search Engine Marketing (SEM)
Search Engine Marketing is a form of internet marketing that involves using search engines to increase the visibility of your website. SEM primarily involves paid advertisements, but can also include elements of organic SEO.
Social Media Marketing (SMM)
SMM is a form of marketing that uses social networking platforms as a marketing tool. The goal of SMM is to create content that users will share with their networks. SMM helps brands increase exposure and broaden the reach of their marketing.
Sales Performance Incentive Fund (SPIF)
Is a financial incentive that encourages a sales representative to sell a specific item or group of items. The term is often used as a synonym for the word bonus.
Total Contract Value
Is the total value of a contract including fees and recurring revenue for the period defined by the contract. Here’s how you calculate TCV:
Total recurring revenues in the contract term + contract fees
For example, let’s say you’ve closed a deal with a $50 on boarding fee plus 14 months of a recurring subscription at $10 per month.
The Total Contract Value for this contract is $190. Calculated like so:
($10 subscription cost * 14 months) + $50 fee = $190
Value Added Reseller (VAR)
A company that adds features or services to an existing product and then resells it as an integrated product or a complete turn-key solution. This practice occurs commonly in the electronics or IT industry, where, for example, a VAR might bundle a software application with supplied hardware.
Win Rate or Conversion Rate
Win rate is the percentage of leads turning into paying customers. For example, if you start with 100 leads and 30 of them become paying customers, then the win rate is 30%.
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