Reference
Competitive Intelligence & E-commerce Glossary
Plain definitions of the main competitive intelligence, metrics and e-commerce terms. Where one exists, each term links to the matching calculator or guide.
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Metrics & finance
- Average order value
- Average amount spent per order in a given period. Formula: total revenue ÷ number of orders. Raising it (via cross-sell, upsell, or bundles) grows revenue without needing more traffic.Read more
- CAC (Customer Acquisition Cost)
- Average cost to win a new customer, combining marketing and sales. Formula: (marketing + sales spend) ÷ new customers. It should be compared to LTV to assess sustainability.Read more
- Churn (cancellation rate)
- Percentage of customers or subscribers lost in a period. Formula: customers lost ÷ customers at the start × 100. High churn pressures CAC, since it constantly requires replacing revenue.
- LTV (Lifetime Value)
- Total revenue or profit a customer generates over the entire relationship. Simplified formula: average order value × purchase frequency × retention time. The higher the LTV, the higher the sustainable CAC.Read more
- LTV/CAC ratio
- Relationship between a customer's value and the cost of acquiring them. Formula: LTV ÷ CAC. A 3:1 ratio is a healthy benchmark; below 1:1 means acquiring customers loses money.Read more
- ROI (Return on Investment)
- Return on investment, measuring real profit. Formula: (revenue − cost) ÷ cost × 100. Unlike ROAS, ROI subtracts all costs, not just media spend, reflecting true profitability.Read more
Price & margin
- Break-even point
- Sales volume at which revenue exactly covers all costs, with no profit or loss. Formula: fixed costs ÷ unit contribution margin. Beyond this point, profit begins.Read more
- Contribution margin
- What's left from each sale after variable costs and expenses, before fixed costs. Formula: price − (product cost + commissions + variable taxes). It covers fixed costs and forms the profit.Read more
- Dynamic pricing
- Strategy of adjusting prices in real time based on demand, inventory, competition, or time of day. Common in marketplaces and travel, it aims to maximize margin or volume without constant manual intervention.Read more
- Free shipping break-even point
- Minimum order value at which offering free shipping still preserves the margin. Calculated by building the average shipping cost into the contribution margin so you don't sell at a loss.Read more
- Markup
- Multiplier applied to cost to set the selling price. Formula: price ÷ cost (or 1 ÷ (1 − desired margin)). A markup of 2.5 means a price 2.5× the cost. Don't confuse it with margin.Read more
- Price elasticity of demand
- Measures how much the quantity sold changes when the price changes. Formula: % change in demand ÷ % change in price. Elastic demand (>1) drops sharply with increases; inelastic (<1) is barely sensitive.
- Price gap
- Difference between your price and a competitor's for the same product. Tracking it guides decisions to match, differentiate, or hold position, and reveals how much margin a discount would consume.Read more
- Price war
- A fight in which competitors cut prices one after another to gain share, eroding everyone's margins. The alternative is to differentiate on value rather than simply matching every discount.Read more
- Selling price
- Final amount charged to the customer, made up of product cost, variable expenses (card fees, taxes, commissions), and the desired margin. In Brazil it must factor in the tax regime, such as Simples Nacional.Read more
Traffic & conversion
- A/B test
- Experiment that compares two versions (A and B) of a page or element to see which converts better. The result is only reliable with statistical significance and a large enough sample, avoiding decisions by chance.Read more
- Cart abandonment
- Percentage of shoppers who add items to the cart but don't complete checkout. Formula: 1 − (completed orders ÷ carts created). High shipping, lengthy sign-up, and few payment options are common causes.Read more
- Conversion funnel
- Sequence of stages a visitor goes through to purchase (visit, product, cart, checkout, order). Analyzing the drop-off between stages reveals the bottleneck where most customers give up.Read more
- Conversion rate
- Percentage of visitors who complete the desired action (purchase, sign-up). Formula: (conversions ÷ visitors) × 100. It's the primary indicator of how efficient a store or campaign is.Read more
- CPA (Cost per Acquisition)
- How much it costs, on average, to generate one conversion (sale or lead). Formula: total spend ÷ number of conversions. Used to set bid caps that keep a campaign profitable.Read more
- CPC (Cost per Click)
- Amount paid, on average, for each click on an ad. Formula: spend ÷ clicks. Together with CTR and conversion rate, it determines whether the CPA fits within the product's margin.Read more
- CPM (Cost per Thousand Impressions)
- Cost to display an ad one thousand times. Formula: (spend ÷ impressions) × 1000. A common model in reach and branding campaigns, where the goal is visibility, not an immediate click.
- CRO (Conversion Rate Optimization)
- Set of practices to raise the conversion rate by optimizing pages, flow, and offers with data and testing. It focuses on extracting more from existing traffic instead of buying more visits.Read more
- CTR (Click-Through Rate)
- Click rate relative to impressions of an ad or link. Formula: clicks ÷ impressions × 100. It indicates how appealing the creative or headline is; a low CTR makes paid traffic more expensive.Read more
- ROAS (Return on Ad Spend)
- Return on your advertising investment. Formula: revenue generated ÷ ad spend. A ROAS of 4 means $4 in revenue for every $1 spent. It measures media efficiency, not profit.Read more
- UTM (campaign parameters)
- Tags added to a URL (utm_source, utm_medium, utm_campaign) that identify the traffic source in analytics. They let you attribute visits and conversions to the right campaign, channel, and medium.Read more
Channels & social
- Engagement rate
- Measures the interaction of a piece of content or profile relative to its audience. Common formula: (likes + comments + saves) ÷ followers (or reach) × 100. It assesses audience quality, not just size.Read more
- Inflated engagement (bots)
- Artificial interactions generated by fake accounts or bought followers, which distort a profile's real engagement rate. Detecting it avoids overestimating a competitor's strength on social media.Read more
Strategy & competitive intelligence
- Benchmark
- Reference point that compares your metrics to the market or to competitors to assess performance. A ROAS or conversion benchmark shows whether your numbers are above or below the standard.Read more
- Competitive intelligence
- Ongoing process of collecting, analyzing and using public information about competitors and the market to support decisions. It turns signals such as prices, posts and launches into pricing, campaign and positioning decisions.Read more
- Positioning map (perceptual map)
- Chart that places brands on two axes (e.g., price vs. quality) to visualize how the market is distributed. It reveals white space, that is, gaps the competition has barely explored.Read more
Marketplaces
- GMV (Gross Merchandise Volume)
- Gross volume of merchandise, that is, the total value transacted in sales over a period, before deducting commissions, shipping, and returns. It's the main metric for the size of marketplaces and stores.Read more
- Take rate (marketplace commission)
- Percentage the marketplace keeps on each sale, combining commission and fees. Formula: total fees ÷ sale value × 100. It directly impacts margin and varies by category and platform.Read more