Not every Go-to-Market term has a widely-recognized definition.
The terms below are defined in line with their use in this content library.
Term | Definition |
|---|---|
Average Customer Lifetime Value (ACLV) | The average amount of money each of your customers pays during their engagement with your company. |
Benefit | A tangible or emotional result driven by your product on the customer’s metrics |
Blocker (Buying role) | A person who does not support your product and can block the sale. |
Buying role | It is the role that a person plays during the buying process |
Capability | An ability unlocked by using a product: something the user can do and could not do without using the product |
Champion (Buying role) | A person who actually cares about the pain you solve, for this reason pushes for your product, and is or has access to decision-makers. |
Coach/Supporter (Buying role) | A person who actually cares about the pain you solve, for this reason supports your product, but has no internal power or influence to secure a purchase decision. |
Cross-sell | Selling additional products (i.e. add-on functionality, or a product serving a different business line) to an existing customer |
Customer Acquisition Cost (CAC) | The average amount of money you spend to acquire each of your customers. |
Customer Lifetime Value (CLV) | The amount of money that one specific customer is likely to pay during their engagement with your company. |
Decision Maker (Buying role) | The person who has the final call on the decision to purchase. |
Economic Buyer (Buying role) | The person who holds and controls the budget for the product. |
Feature | A concrete functionality of a product: something the product does and enables one or more capabilities. |
Forecast error | It measures the accuracy of your forecast. It’s the relative difference (in %) between what you forecasted and what you end up closing. |
Horizontal product | It is a product used by many personas and/or industries. Marketing a horizontal product presents specific challenges, especially in making messaging relevant to such a diverse audience. |
Ideal Customer Organization Profile (ICOP) | It is a description of the organization that is the most likely to buy and benefit from your product: location, industry, size, and other characteristics. It is defined by analyzing your current customer base and is used to focus your sales and marketing activities on the most likely buyers. |
Ideal Customer Persona Profile (ICPP) | It is a description of the individuals within your Ideal Customer Company Profile (ICCP) who are the most likely to buy and/or benefit from your product: demographics, typical roles, characterization, Job-to-be-done, likely buying role, etc. It is defined by analyzing your current customer base and is used to focus your sales and marketing activities on the most likely buyers. |
Ideal Customer Profile (ICP) | It is a description of your “perfect customer”. It is the most likely to buy and benefit from your product. It is defined by analyzing your current customer base and is used to focus your sales and marketing activities on the most likely buyers. In B2B, the definition is ambiguous: it may refer to both organizations and individuals. For this reason, I prefer using the terms Ideal Customer Organization Profile (ICOP) and Ideal Customer Persona Profile (ICPP), depending on the context. |
Jobs-to-be-Done | A framework to optimize go-to-market strategy by analyzing the “jobs” that prospective customers need to do (fulfill a certain need, perform a certain task, reach certain objectives, etc) and which drive their decision to buy a product |
Lifetime Value (LTV) | The aggregate amount of money that your customers are likely to pay during their engagement with your company. |
LTV-to-CAC Ratio | A metric often used as a rule of thumb to evaluate a firm’s performance, with 3:1 set as a good benchmark. Despite its name, it is more accurately defined as the ratio between the Average Customer Lifetime Value (ACLV) of customers acquired in a certain period and the average Customer Acquisition Cost for that same period. |
Magic Number | A metric often used as a rule of thumb to evaluate a firm’s sales and marketing performance, with the range from 1 to 1.5 set as a good benchmark. |
Net-New ARR | It is the net increase in Annual Recurring Revenue over a certain period (a month, a quarter, a year): the ARR at the end of the period minus the ARR at the beginning of the period |
New ARR | It is the ARR added over a certain period (a month, a quarter, a year) by winning new customers, up-selling, or cross-selling |
Rule of 40 | A metric often used as a rule of thumb to evaluate a firm’s performance. The rule says that profit margin + growth rate should exceed 40% to indicate a great business model. Values above 50% indicate that you could grow faster and are likely under-investing in sales and marketing. |
Up-sell | Selling more of a product (i.e. additional users) or a higher-end product (i.e. upgrade from professional to enterprise plan) to an existing customer |