Online Business Glossary

7-11-4 Rule

In 2011, Google researchers presented the Zero Moment of Truth framework, or ZMOT for short. One of its central concepts is the 7-11-4 rule, which helps businesses understand how to engage with potential customers. According to this rule, a consumer typically needs to spend seven hours interacting with your brand, engage through eleven different touchpoints, and do so across four distinct channels or locations, to reach a purchase decision.

A/B Testing

A/B testing helps you make data-driven decisions to optimize your website for maximum effectiveness and engagement. Let’s say you have an idea of a change that might improve the conversion rate of one of your landing pages. How can you know if you are right? This is where A/B testing, or split testing, comes in. The website will show different versions of the page to different users. By comparing the conversion rates of each version, you can then see which resonates better with your audience and drives more clicks or sign-ups.

Affiliate Marketing

Affiliate marketing is a business model where you earn a commission by promoting other people’s products. You sign up to be an affiliate for a company, grab a unique link they give you, and share it with your audience. When someone purchases through your link, you get a commission.

Call to Action (CTA)

A Call to Action is a prompt that encourages people to take a specific action, like clicking a button, signing up for a newsletter, or making a purchase. It’s usually a short phrase like “Buy Now,” “Sign Up,” or “Learn More,” designed to guide users toward a desired outcome. In online marketing, CTAs are crucial because they direct potential customers to the next step in their journey, helping to convert interest into action. Effective CTAs are clear, persuasive, and placed in a way that makes them easy for users to follow.

Channel

In marketing, a channel is the medium or platform through which these interactions occur. Channels include social media, email, your website, in-store experiences, or phone calls. Each channel is a different way for your brand to reach and engage with customers, allowing for multiple opportunities to connect and build a relationship.

Click-Through Rate (CTR)

Click-through rate is a metric used to measure the success of online advertising campaigns. It calculates the percentage of people who clicked on a specific link, such as an ad or a call-to-action button, compared to the total number of people who saw the link. A higher CTR indicates that the ad or link is compelling and relevant to the audience, as it attracts more clicks. CTR is crucial in digital marketing as it helps businesses understand how effectively their online promotions drive traffic and engagement.

Conversion Rate

Conversion rate is a very important metric in marketing. It represents the percentage of web page viewers, email readers, ad viewers, etc., who do what you want them to do, like buy something, sign up for a newsletter, or fill out a contact form. If you monitor and improve your conversion rate, you can improve your website and reach your business goals more quickly.

Digital Product

A digital product is an item that is created, sold, and delivered entirely in a digital format. Examples include e-books, online courses, software, music, videos, and digital art. Unlike physical products, digital products can be downloaded or accessed online, making them easy to distribute and often available immediately after purchase. Online businesses can sell digital products to a broad audience with minimal overhead costs.

Dropshipping

Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly or keep inventory, making it a popular choice for online businesses looking to minimize upfront costs and streamline operations. Dropshipping must not be confused with third-party logistics (3PL), where the seller must put money into goods upfront.

Freelance

Freelance is a work arrangement where an individual (a freelancer) offers their services to clients on a project-by-project basis rather than being employed by a single company full-time. Freelancers are typically self-employed and have the flexibility to choose the projects they work on, set their own hours, and often work remotely. Freelancers are responsible for managing their business operations, including invoicing, taxes, and client communication, and they usually work with multiple clients simultaneously.

Landing Page

A landing page is a standalone web page created with a specific purpose, usually to guide visitors toward a particular action. Unlike regular web pages, landing pages are designed to be simple, focused, and persuasive. They often feature concise content, a clear call to action, and minimal distractions to encourage visitors to complete a desired goal, whether making a purchase, signing up for a newsletter, or downloading a resource.

Lead Magnet

A lead magnet is a marketing tool designed to attract potential customers by offering something valuable for free in exchange for their contact information. It can be as simple as a discount code, but it can also be a digital product (such as a checklist or an online course) that entirely solves a small problem, making it valuable to your prospect. After solving this initial problem, they will be elevated to a level where there are other problems to solve, which should open business opportunities for you.

Online Business

An online business is a company or organization primarily operating on the Internet, offering products, services, or information through websites, social media, and other digital platforms. Their global reach and the fact that online products have no physical production or distribution costs associated with each sale are enablers for rapid growth.

Organic Traffic

Organic traffic is the term used to describe visitors who come to your website through unpaid search results. These visitors find your site by searching for relevant topics or keywords in search engines like Google without clicking on paid advertisements. Organic traffic is valuable as it indicates that your website ranks well in search engine results and attracts visitors naturally.

Search Engine Optimization (SEO)

Search Engine Optimization is the process of improving your website’s visibility on search engines like Google. By optimizing various elements on your site, such as keywords, meta tags, and content quality, SEO helps your site rank higher in search results. This means more people are likely to find your website when they search for relevant topics online, ultimately driving more traffic and potential customers to your site.

There are two main approaches, called white hat SEO and black hat SEO. White hat SEO refers to strategies and techniques that improve search engine rankings by creating high-quality content, using relevant keywords, and optimizing website structure. On the other hand, black hat SEO involves using various hacks to try to manipulate search engine results, such as keyword stuffing, hidden text, and spammy backlinks. While black hat SEO may lead to quick results, it can ultimately result in penalties from search engines and harm the website’s reputation.

Sales funnel

A sales funnel is a crucial concept in marketing that describes the step-by-step process potential customers go through from the moment they first encounter your brand to when they make a purchase. The funnel is typically divided into several stages, each representing a different level of engagement or commitment from the prospect.

Solopreneur

A solopreneur is an individual who runs a business without regular employees. However, it is common for solopreneurs to delegate specific tasks to freelancers. Solopreneurs often leverage digital tools and platforms to run their businesses, making it possible to operate efficiently as a one-person enterprise.

Split Testing

See A/B testing

Third-Party Logistics (3PL)

Third-party logistics refers to outsourcing the logistics operations of a business to a fulfillment service provider, such as Fulfillment By Amazon (FBA). Fulfillment services typically include warehousing, inventory management, order processing, packaging, shipping, and returns. Unlike dropshipping businesses, 3PL sellers retain ownership of their inventory until it is sold, and the fulfillment service provider takes care of the logistical aspects of fulfilling orders. Through 3PL, businesses can streamline their supply chain and focus on other aspects of their operations, such as marketing and product development.

Touchpoint

A touchpoint refers to any interaction or point of contact between a customer and your brand. This could be anything from visiting your website, reading a blog post, seeing a social media ad, or receiving an email newsletter. Touchpoints are moments where your brand communicates with the customer, helping to build their perception of your business.

Webinar

A webinar is a live online event where a host or a group of hosts present information to an audience. It allows participants to engage with the presenters through chat boxes, polls, and Q&A sessions. Webinars are commonly used for educational purposes, training sessions, marketing events, and product demonstrations.