Marketing Definitions: Target Market

Welcome to the latest edition of our new weekly blog series, Marketing Definitions. Each week, we will identify an oft-used term or phrase in the marketing community and break down its use and meaning for the broader population.

Last week’s term that we defined was Impressions.

Today’s Term = Target Market

A target market, broadly, is a group of people who are potential customers for your business.

In marketing, we talk a lot about targeting. Targeting is the art of identifying who is most likely to purchase a product or service, and showing advertising specifically meant to reach and affect those people.

Brands in general can have a target market. Each product a company offers can have its own, unique target market. And some products can have several different and unique target markets.

For example, a company like Verizon will have different target markets for its wireless phones and its Fios home internet service. And it’s internet service might have one target market of consumers and a separate one for businesses.

Target markets are important because they inform your strategy for marketing and growth. Without knowing who your potential customers are, you have no idea what to do to reach them.

A target market works best when it is as specific as possible. You may want to brag about how big your target market is because that means the sales potential for a product is bigger. But better to identify several, more specific markets within that broad category so that you can customize product features and marketing campaigns focused specific to one market or another.

In general, when we talk about target markets, we’re talking about who we want to sell to.

That does it for today’s definition. Have a term you’d like defined in a future post? Email us or post it in the comments below.

Marketing Definitions: Impressions

Welcome to the latest edition of our new weekly blog series, Marketing Definitions. Each week, we will identify an oft-used term or phrase in the marketing community and break down its use and meaning for the broader population.

Last week’s term that we defined was Lifetime Value.

Today’s Term = Impressions

Impressions, broadly, are the number of times your ad gets shown. Each impression is one chance your ad has to be seen.

Seems simple enough, right? Well, the last couple of years has seen a fight in the advertising industry to redefine the term, or at least devalue its importance.

Let me explain. In online advertising, display or banner advertising more specifically, advertisers pay based on the number of impressions. Ads are priced as a “cost per thousand”, written as CPM. So if an ad has a $10 CPM, the advertiser pays $10 for every thousand impressions.

But here’s the problem – not every impression gets seen. Some ad blockers will block an ad from being seen but they will still register an impression. And some ads show up below the visible part of the page. So impressions don’t always equal, in fact rarely ever equal, views. And that is a fact that not every advertiser understands, and most agree isn’t fair.

So an impression just means the ad is served. It has a chance to be seen. Whether it is seen or not by the intended audience, who’s to say.

That does it for today’s definition. Have a term you’d like defined in a future post? Email us or post it in the comments below.

Marketing Definitions: Lifetime Value

Welcome to the latest edition of our new weekly blog series, Marketing Definitions. Each week, we will identify an oft-used term or phrase in the marketing community and break down its use and meaning for the broader population.

Last week’s term that we defined was UX.

Today’s Term = Lifetime Value

Lifetime Value, abbreviated LTV, is a term that marketers and business owners use in reference to their customers. The LTV of a customer is the total amount of money they spend with your business over the course of their lives.

Lifetime value is an important metric to know because it gives you the best picture of what a customer is worth to you. Some companies calculate the “average order value”, which only takes into account one purchase at a time. But lifetime value gives you a much better idea of the value provided by each new customer.

When you have a relatively good idea about the LTV of a new customer, you know what you can afford to spend on advertising and marketing to acquire a new customer. By comparing your customer acquisition cost to your LTV, you know your margin.

If the data is available to you, you can calculate total revenue divided by total number of customers over the history of your business. But most systems and databases do not go back far enough to get a full look at lifetime value.

So to calculate lifetime value, you may have to make some broad generalizations. How many purchases does each customer make? How much is each purchase worth?

Next time you hear the term lifetime value, you’ll be in the know.

That does it for today’s definition. Have a term you’d like defined in a future post? Email us or post it in the comments below.

Marketing Definitions: UX

Welcome to the latest edition of our new weekly blog series, Marketing Definitions. Each week, we will identify an oft-used term or phrase in the marketing community and break down its use and meaning for the broader population.

Last week’s term that we defined was Leads.

Today’s Term = UX

UX stands for user experience. It is an extension of, or rather an evolution from, UI (user interface).

We use the terms in the design world, to help guide the design process.

When a company is designing something – it could be a product, some internal system, a website, etc. – there must be some recognition of who the end user will be. For example, when designing the company’s website, the designer must first acknowledge that the users will be customers and potential customers.

Establishing the end user is critical, because it does you no good to design something that the user won’t get any value out of. That’s where UX comes in. UX design is the process of making your design more user-friendly.

By focusing on the user during the design process, the designer(s) should be able to make it more usable, more accessible, and more valuable.

An example of a company that puts user experience first in everything they do is Apple. Most people, when asked to describe their experience with a new Apple product, use the word “intuitive”. They pick it up and they instantly feel like they know how to use it, without any instruction. That should be the goal of any new design.

When you see the term UX, think user-experience, and know that it’s about designing something so that the end product is incredibly user-friendly (read: easy to use).

That does it for today’s definition. Have a term you’d like defined in a future post? Email us or post it in the comments below.

Marketing Definitions: Leads

Welcome to the latest edition of our new weekly blog series, Marketing Definitions. Each week, we will identify an oft-used term or phrase in the marketing community and break down its use and meaning for the broader population.

Last week’s term that we defined was Paid Search.

Today’s Term = Leads

In marketing, we use the term “lead” most often when we’re talking about sales. You might hear “sales lead” instead, further linking the two.

A lead is a prospective sale. In the business to business world, it might be a business or individual decision-maker within that business. In the business to consumer world, a lead is most likely an individual.

These leads, or prospects, are potential clients that your sales efforts will be aimed at.

A few related terms:

Cost per lead = the amount spent to acquire each prospect. This is a useful metric in measuring advertising effectiveness.

Lead conversion rate = the amount of prospects that turn into paying customers. This metric helps you measure the effectiveness of sales programs, salespeople, or the quality of the leads.

Lead generation = refers to the activities used to acquire prospects. This could be online advertising, email marketing, cold calling, direct mail, list purchases, etc.

That does it for today’s definition. Have a term you’d like defined in a future post? Email us or post it in the comments below.