2 Internet Marketing Acronyms You Must Know

acronymsThere is a lot to do to build a successful online business. After you understand what it is you can offer to the world to make life better for others while turning a profit, you have to select a domain name, get the site up, bring targeted visitors by, convert visitors to customers, and then take care of customers. Those are components of an online marketing strategy. With small business web marketing strategy, there are quite a few acronyms used. In this post I highlight two acronyms which are essential, but can be easily overlooked.

2 Internet Marketing Acronyms You Must Know

CR – Conversion Rate

Once a web searcher arrives at your site via search engine optimization or pay per click traffic, the question is; do they do what you want them to do? Assuming they are given a CTA (another acronym, Call To Action), are they taking it? A few things they can do are:

  • become a subscriber,
  • download a report,
  • or purchase a product.
What percentage of website visitors are completing the action they are called to do? If you know that 4 of every 100 visitors complete that action, then you know with that 4% conversion rate, if you get 100,000 visitors (traffic) a month, you should average 4000 conversions.

ASV-Average Subscriber Value

This is the measure of revenue each subscriber represents to your business over a given time period (usually 1 year). This is often associated with an email list, but can be applied to offline marketing lists as well. If you are building a list (and nearly every online business should be), it is important to understand this value as it helps you understand the resources you should allocate to get more subscribers.

To be clear, the model I present here is not scientific, it is simplistic, and it gets you thinking. Example, a given site or blog started with 1000 subscribers January 1, and by December 31 they had 2500. During the same period, subscribers added in $300,000 in revenue (can be product or services sales, ad revenue, or affiliate revenue), to the business.

My simple formula is to take an average value for each given period, so in this case, at the beginning of the year, 1000/300,000 = 300 Average Subscriber Value, while at the end of the year the number is 2500/300,000 = 120. To get the average, we’ll add both numbers and divide by 2, (300+120)/2 = 210. While it can vary, you have an idea that for each subscriber you acquire, it means $210 in revenue to your business. This information can be invaluable when determining what to spend to acquire more subscribers.

It is worth noting this does not account for cost of goods sold, etc. There is a more complicated and comprehensive calculation, also an acronym called CLV-Customer Lifetime Value which involves understanding what a customer means to your business in revenue over (usually) a 3 year period.

Internet Marketing Acronyms Mean Business

When it comes down to it, it is important to understand acronyms, but more importantly the right ones which will help to measure your business. Whether your small business marketing tasks involve measuring your progress with things such as CR (conversion rate) or ASV (average subscriber value), (not mentioning any ppc campaign management acronyms!) your online marketing strategy should incorporate key metrics so you know you are moving in the right direction with search engine optimization, or other internet marketing strategies.

Now it’s your turn: Are you doing any tracking? (no worries, many don’t) If so, what is your key metric? If not, do this, with last years revenue in mind, divide by your current subscribers count. That is your (rough) ASV. Surprised? shocked? Feel free to share your thoughts here in the comments boxes below.

*Image credits to Jim Linwood

Author: Travis Campbell

Husband. Dad. Marketing automator. Author. Educating and coaching others in their online business endeavors. Here's his Google profile.

5 thoughts on “2 Internet Marketing Acronyms You Must Know”

  1. It was a great article. Knowing the acronyms used in internet marketing is essential. When you are into web marketing, you must be familiar with its procedures, guidelines as well as the acronyms for you to be able to keep up with your competitors.

  2. I’m extremely familiar with CR, both from online dealings and from offline terminology. ASV, on the other hand, is a new term for me. I have thought about what you are discussing here, but you just validated my “seemingly” mixed up thought process. I have also used this type of calculation to determine the overall cost of doing business in sort of an ROI calculation…not just for attracting new subscribers. As most online business people, I have multiple sites and have found calculations of this type are great for determining the success and holding power of a given site. Thanks for validating and expanding my thoughts!

  3. Michelle-

    Glad you found value in the post. I appreciate your observations. I’m no accountant, but understand that we business owners need to know how we are doing so we can correct our course, etc.

    Beyond the numbers, it is important to give folks a reason to *be* a subscriber. Like offering them specialized information on your niche or marketplace that is unique and of professional grade.

Leave a Reply

Your email address will not be published. Required fields are marked *