Business terminology

Below, the terms are divided into blocks on similar topics

SWOT analysis – analysis of the company’s strengths and weaknesses, as well as its opportunities and threats.

Offer – a sales proposal.

B2B – sales or marketing between two businesses.

B2C – sales and marketing between a business and customers or consumers.

Prototype – a working model, a trial version of a product, business, service, used to set up processes, identify weaknesses for improvement during or before a test run.

Prototyping is a method of designing and creating a research model.

Cold analytics – surface research. Data that is widely available and, as a rule, does not have the highest accuracy, but allows you to understand the overall picture.

It can be in the form of ready-made studies and surveys, or it can be obtained independently using the simplest methods (search in open resources, general statistics).

Hot analytics is in-depth research. The data is obtained from a specially selected audience, according to an individually designed scenario, and surveys. They usually require time and financial resources, special training, and are highly accurate.

In-depth interviews – interviews with respondents to obtain information about their true needs and deeply hidden motives and preferences. They are conducted according to certain rules (without announcing the real purpose of the survey, encouraging the respondent to share real experiences/stories) and on the basis of reference topics, without clear questions.

Expert interviews – in-depth interviews with experts in a particular field or specialists with important competencies. They are conducted to confirm/refute hypotheses related to the product/service.

Positioning is the place your product occupies in the mind of the consumer. How the consumer perceives it compared to competitors.

Unique advantages – individual properties and characteristics of a product/service that create a certain advantage over competitors’ products.

Product DNA – rational unique advantages of a product that coincide with consumer demands/insights and form the rational basis, the essence of the product.

Segmentation is the grouping of consumers into groups based on certain characteristics. Market segmentation is the process of dividing the market into homogeneous groups of customers, each of which may require separate products and marketing packages.

Insight is an ulterior motive, a very deep subconscious impulse to act.

User scenario – a scenario of consumer behaviour before, during and after a purchase/interaction with a product.

Trend – a tendency, development, direction in something that develops at a certain time.

Competitive position – the position of a product/business in relation to the competitive environment. Simplified: competitiveness.

Mapping is a method of visualising data by creating a map from vectors of opposing trends.

Benchmarking is the study of competing companies, products in your industry and in other categories in order to borrow processes/techniques and adapt them to achieve your own goals.

Empathy map – a tool for visualising the consumer’s portrait and needs, which allows you to put yourself in the user’s shoes and look at the problem your product solves through their eyes

MVP – minimum viable product – a product that has minimal but sufficient functions to satisfy the first consumers. The main task is to get feedback to form hypotheses for further product development.

MDP minimum desirable product – a product that is attractive enough to appeal to the consumer.

VRIN / VRIO algorithm – algorithms for evaluating company resources according to certain criteria.

Customer avatar = Brand Hero = creating an image/portrait of a customer using detailed characteristics. As a rule, Brand Hero is more often used in a communication strategy – it is with him that a brand or company communicates about its products.

Points of Differentiation – the main properties of a product that distinguish it in the market from competitors in the same segment.

ARPU is the company’s average revenue per customer. The formula looks like this: ARPU = total revenue / number of customers.

Brand Identity – the characteristics and personal traits that define your brand online and offline. It is the message and aesthetics offered to your audience.

Churn Rate – an indicator that determines the number of customers who have cancelled a subscription or service.

Conversion Rate is the percentage of customers who have taken a certain step (not necessarily a purchase).

Cross-Channel Marketing is a marketing strategy that promotes the same message in several media, such as a website and outdoor advertising.

Customer Journey is the path a potential customer takes to purchase your product. It includes all the interactions a customer has with an organisation.

Lifecycle Stages – the stages that the target audience goes through when searching for and considering your offer, as well as during and after the purchase.

Marketing Funnel – the path of your potential customer, each step of which brings them closer to making a purchase.

Pain Points – problems faced by your target market (customer) that can lead them to your product or service.

ROI (Return Of Investments) – the ratio of money earned to money spent.

ROMI (Return Of Marketing Investments) – the ratio of money earned to money spent on marketing.

ROAS (Return Of Advertising Spends) – the ratio of money earned to money spent on advertising.

Engagement Rate is the share of subscribers who actively interact with your content. It is calculated using the following formula: Engagement = total interactions/total reach * 100.

CTR (click-through rate) – the number of clicks on a link in relation to the total number of people who saw it.

CRO (conversion rate optimisation) is a tactic aimed at increasing the percentage of customers who visit your website and then convert.

Organic search – users who come to a website not through advertising or paid content, but from organic search results.

PPC (pay-per-click) is a marketing tactic in which a company advertises its resource and pays for each click on a link.

CPC (Cost per Click) Cost per click is a model of payment for online advertising campaigns, in which an advertiser pays a certain amount for each click on an ad. Payment is made to the owner of the website where the ad is placed.

CPM (Cost per thousand Impressions) Price per 1,000 impressions – a payment model for advertising campaigns. The amount that an advertiser pays for every 1,000 impressions of their ad.

Native Advertising – advertising that copies the visual design or style of a platform (website, social media page) and takes the form of natural content.

Inbound marketing is a new type of customer acquisition by generating useful content, resources and creating other points of intersection with customers without selling directly to them. Content and resources can include blog articles, YouTube videos, answers to questions on forums, podcasts, presentations, etc.

Outbound marketing is a traditional advertising technology and strategy that has been used since time immemorial, even before the invention of the Internet. The main channels of Outbound Marketing are

“Cold” phone calls.

Direct mail, physical mailing.

Mass media and television.

Exhibitions, presentations – places of mass gathering of people.

Acquisition – It is usually used in the context of tools aimed at attracting customers.

Retention – It is usually used in the context of tools aimed at returning customers.

Product marketing – marketing actions aimed at improving the marketing characteristics of a product (customer retention, increasing loyalty, increasing conversion).

Key Visual – a key graphic image from the company’s corporate identity.

ATL (Above The Line) is the delivery of marketing information through mass media. Describing ATL (above the line) advertising, it is noted that historically the first and traditional type of marketing communication – one-sided, direct, from the manufacturer, seller of goods, influence on the mind of the buyer without including him in a direct dialogue with the seller of goods, trade organisation, manufacturer – is considered impersonal in relation to consumers.

BTL (Below The Line) – indirect advertising, influence on customers that differs from direct advertising.

Customer Lifetime – the average lifetime of one customer on your project.

AOV (Average order value) is the average check.

CAC (Customer Acquisition Cost) is the total amount of all marketing efforts that were required to attract one customer. It is one of the determining factors of whether your company has a viable business model that can maintain a low CAC level while scaling your business.

CTA (Call to action) is a call that motivates a visitor to respond immediately – to fill out a form, call back, etc. CTA buttons are the main elements of a website or advert that lead to a conversion action.

Up-sell is the motivation of a customer to spend more money in your store, for example, to buy a more expensive model of the same product, add options or services to the product you are buying.

Cross-sell is also about motivating customers to spend more money, but by selling products from other categories than the one originally selected by the user, i.e. primarily selling related products.

Retention Rate is an indicator that determines the number of customers who use a subscription or service

Conversion Rate – the percentage of customers who have completed a certain step, a conversion (not necessarily a purchase).

Customer Journey – the path of a potential customer to a purchase. It includes all interactions of the consumer with the product.

Marketing Funnel – the path of your potential customer, each step of which brings him or her closer to making a purchase.

KPIs (key performance indicators) are measurable indicators of success in a particular activity or in achieving certain goals. It is a quantifiable indicator of the results actually achieved.

Lifecycle Stages – the stages that the target audience goes through when searching for and considering your offer, as well as during and after the purchase.

CRO (conversion rate optimisation) is a tactic aimed at increasing the percentage of customers who visit your website and then convert.

Keyword – a term used by search engines to display content in search results by category. For example, Kyiv courses is a keyword in a search engine that will display all the resources that have optimised their sites for this word.

Landing Page – usually a separate selling page to which paid and advertising traffic is directed.

Cost per acquisition, CPA (cost per acquisition, attraction) – the total cost of converting a website visitor into a revenue-generating customer.

Cross Sales – sales of additional products or services to existing customers.

Lifetime Value, Customer lifetime value LTV, LCV (customer lifetime value) – the amount of total revenue generated by a customer for the entire period of his/her life in the company.

Remarketing / retargeting – displaying the same advertising banners (but on different websites) to a visitor who has previously shown interest or purchase in the advertiser’s product or service.

Demographics – statistical characteristics of the population.

Pain Points – problems faced by your target market that can lead them to your product or service.

Target audience – a group of people that your company seeks to attract because the marketing team has identified them as the most likely buyers.

Engagement rate in SMM is the share of subscribers who actively interact with your content. It is calculated using the following formula: Engagement = total interactions/total reach * 100.

Hashtag is a phrase after the # symbol that indicates the topic of the post and makes it easier to find.

Influencer is a popular personality on social media who is followed by your potential customers and helps you promote your product.

Bounce Rate is the number of users who leave a website after viewing only one page.

Chatbot is an online service based on AI (artificial intelligence) that your customers interact with. Chatbots imitate human communication.

Ecommerce is the purchase and sale of products and services through online platforms.

Gamification is a style of marketing in which consumers make purchases through the use of a game strategy – achievements (badges), quests and other engagement (for example, collecting 10 printed tampons and getting a cup of coffee).

Geo-Targeting is the targeting of content based on the location of customers.

USP (Unique selling proposition) is the central offer of a company that sets it apart from competitors.

Organic traffic – users who came to the website not through advertising or paid content, but from organic search results.

A/B testing (split testing): an experiment that compares two versions of a page to see which one has a higher conversion rate.

Affiliate Marketing: an agreement between two companies in which one promotes the content/company or product of the other for a certain commission.

Content Management System (CMS) – a software program that helps users create and manage content online, for example, WordPress, Drupal.

Viral content – any content that unexpectedly becomes very popular.

CTA (Call to action) is a call that motivates a visitor to respond immediately – to fill out a form, call back, etc. CTA buttons are the main elements of the website that lead to a conversion action.

Cookies – small files that are stored in a computer browser and contain information related to the user’s visits to certain websites. They are used to track the history of page visits and identify user preferences.

A cash flow statement is a report that clearly shows how much money came into the company, to which account and where it was spent. It shows how effectively the company manages its cash. It consists of accounting for cash flows in three types of activities: operating, financing, and investing.

Net cash flow is the difference between cash inflows and outflows in the period under consideration (day, week, month). It is analysed both for each type of activity and for the company as a whole. It shows how much more or less money the company has over the period.

Cash method – a method of accounting for income and expenses based on the principle of actual receipt or payment of cash. It is used in the statement of cash flows.

Accrual basis of accounting is a method of recognising income and expenses that recognises income and expenses for profit or loss when they are incurred (for example, when a service is completed, goods are shipped, or a liability to pay wages is incurred), regardless of when the cash flows related to the service are actually received or paid. It is used in the income statement.

The income statement is the main report for an entrepreneur that shows how successful or unsuccessful the business model is.

Balance sheet – shows what the company owns (the entire structure of assets) and what the company owes (liabilities) at a certain date. It is necessary to analyse how the company grows and increases its assets, where the money was invested and at the expense of what funds (other people’s and borrowed) the company exists.

Current assets – assets that can be quickly turned into money (cash, inventory, finished goods, receivables)

Non-current assets – assets that a company uses for a long period of time (more than one year).

Short-term debt – debt that must be repaid within a period of less than 1 year.

Long-term debt – debt that must be repaid within a period of more than 1 year.

Company’s equity is the amount of money that would be returned to the company’s shareholders if all assets were sold and all debt was repaid. Shareholders’ equity is on the company’s balance sheet and is one of the most common financial indicators used by analysts to assess a company’s financial position.

Accounts receivable is when our money is with customers. And we give them the right to use it for a certain period of time. Receivables are deferred payments from the date of shipment of a product or the date of completion of services.

Accounts payable is when we have our contractors’ money and use it, i.e. it is our promise to pay our contractors and counterparties. Here, too, the number of days can range from a few days, weeks, or months.

Payment calendar is a plan of cash inflows and outflows for the next week. It is drawn up to avoid cash gaps.

Gross profit is the difference between revenue and the cost of products or services sold.

Company profitability is a relative percentage indicator measured as the ratio of net profit to the company’s income or expenses.

EBITDA (earnings before interest, taxes, depreciation and amortisation) – earnings before interest, taxes, depreciation and amortisation;

EBIT – earnings before interest and taxes;

EBT (earnings before taxes), Net Profit – profit after payment of all expenses (cost and operating expenses) before taxes.

EAT (earnings after taxes) = – profit after taxes;

RE (retained earnings) – retained earnings that are reinvested back into the business.

This is a small list of basic terms. I hope they will be useful for you and your development!

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