Marketing and business terms, in plain English
TL;DR: A plain-English dictionary of the money and marketing terms we use across these guides. No jargon for its own sake. If a term in our writing links here, this is where it lands.
We try not to hide behind jargon. But some terms are genuinely useful shorthand, so here is what they mean, in language an owner can use. The money terms come with a quick example, and the measurement terms come with the honest version — what each one can and cannot tell you.
No terms match .
A
AARRR (pirate metrics)
AARRR — Acquisition, Activation, Retention, Referral, Revenue — is the growth-hacking metrics funnel, nicknamed “pirate metrics” (McClure). Each stage is a place to run an experiment and find where customers drop off. It is the operational scoreboard under the strategy layer; see the Strategic Taxonomy.
Attribution
Attribution is the work of figuring out which marketing actually caused a sale, when a customer touched several things before buying. It is hard, it is never perfect, and pretending otherwise is how money gets wasted. The goal is a clear-enough signal to make the next decision, not false precision. The honest version separates what you caused from what you only witnessed — see how we measure growth and causal attribution.
Attribution window
An attribution window is the time period after someone sees or clicks an ad within which a later sale still gets credited to that touch. A 7-day click window credits the ad if they buy within a week; a 1-day view window is far stricter. Set it too long and the ad takes credit for sales it barely influenced; too short and you miss the slow deciders — which is exactly why the window you pick quietly shapes every attribution number you report. See how we measure growth.
Average sale / average order value (AOV)
Average order value is your typical sale size — total revenue divided by number of orders. Raising it (through pricing, bundling, or upsells) grows revenue without needing a single new customer. See pricing for profit for the levers that move it.
C
Campaign
A campaign is a time-bounded, goal-specific coordinated effort with a defined start and end — run once, not reused. It is frequently built out of plays and experiments. The difference between a campaign and a play is reuse: a campaign ends, a play is triggered again and again. See the Strategic Taxonomy.
Causal attribution
Causal attribution is crediting an outcome to a cause that actually produced it — proven against a baseline, not just assumed because the two happened in the same window. It is the difference between “this ad ran and then they bought” and “this ad ran so they bought.” We treat ordinary attribution as a useful guess and causal attribution as the version you can stake a budget on. More in how we measure growth.
Churn
Churn is the rate at which customers leave over a period. If you start a year with 100 clients and 20 are gone by year end, that is 20% annual churn. Lowering churn compounds: every customer you keep is one you do not have to re-acquire. See retention beats acquisition.
Conversion rate
Conversion rate is the share of people who take the action you want, out of everyone who had the chance. If 200 people visit a booking page and 10 book, that is a 5% conversion rate. For service businesses the conversions that matter are usually the call booked or the quote requested, not raw clicks. See CRO for service businesses.
Cost to serve
Cost to serve is what it actually costs you to deliver for a client over time — the hours, the rework, the support. Two clients paying the same can have very different cost to serve, which is why revenue alone is misleading. Binding cost to serve to revenue is what lets the Hiilite platform tell you which clients are truly profitable. See what a client is actually worth.
Counterfactual
A counterfactual is the estimate of what would have happened without the marketing — the do-nothing baseline you compare reality against. If sales would have been 100 anyway and you got 120, the counterfactual is 100 and the marketing is responsible for the extra 20. Everything in honest measurement hangs on getting this baseline right; see how we measure growth.
Customer acquisition cost (CAC)
CAC is what it costs, all in, to win one new customer — ad spend, tools, and the time and commissions that go into closing them — divided by the number of customers that effort produced. Spend $3,000 in a month and win 6 clients, and your CAC is $500. Pair it with lifetime value to know if a customer is worth what they cost — work both out with the LTV calculator.
Customer lifetime value (LTV or CLV)
Lifetime value is the total gross profit you earn from one customer across the whole relationship, not just the first sale. A client worth $500 a year at 60% margin who stays three years is worth about $900 in lifetime gross profit, not $1,500 in revenue. Knowing it is the only way to know what you can afford to spend to win one. Work yours out with the LTV calculator.
D
Dynamic capability
A dynamic capability is a higher-order capacity to sense, seize, and transform — reconfiguring your resource base to keep an edge as conditions change (Teece). Running a known play well is an ordinary capability; changing your portfolio of plays when the market shifts — say, AI answer engines disrupting search — is the dynamic capability at work. See Sense, Seize, Transform and the Strategic Taxonomy.
Difference-in-differences (DiD)
Difference-in-differences compares the before-and-after change in a group you marketed to against the change in a group you left alone. If the treated group grew 15% and the untouched group grew 5% over the same stretch, the marketing’s share is the difference of the differences — about 10 points. Subtracting the second change strips out whatever was happening to everyone anyway (a busy season, the economy). See how we measure growth.
E
Experiment
An experiment is a single build–measure–learn test aimed at moving a funnel metric — the smallest unit of marketing work. You change one thing, measure against a credible counterfactual, and keep or discard it. When an experiment proves out, you promote it into a reusable play. See the Strategic Taxonomy.
F
Funnel stages: TOFU, MOFU, BOFU
The funnel describes how close someone is to buying. TOFU (top of funnel) is awareness — they are learning. MOFU (middle) is consideration — they are comparing options. BOFU (bottom) is decision — they are ready to choose. Good marketing meets people at the right stage instead of pitching everyone the same way.
G
Geo-test
A geo-test runs a campaign in some regions and not others, then compares the outcomes between them. Turn ads on in Kelowna and Kamloops, leave Vernon dark, and the difference (once you account for normal regional gaps) tells you what the ads did. It is a practical stand-in for a holdout when you can’t randomise individual customers but you can split a map. See how we measure growth.
Gross margin
Gross margin is the share of a sale you keep after the direct cost of delivering it, before overhead. If you sell something for $100 and it costs you $40 in materials and labour to deliver, your gross profit is $60 and your gross margin is 60%. It matters because it tells you what a sale is actually worth to you. Two businesses with the same revenue can be in completely different shape depending on margin. Every Hiilite calculation that asks “what is a client worth” uses margin, not just revenue, so the number reflects real profit. See what a client is actually worth.
Growth Mapping
Growth Mapping is Hiilite’s framework for growing a business on purpose: read your real numbers, find the one constraint holding you back, run the right move, measure what changed, repeat. It is the spine of everything here. Read the framework, the bigger ideas in the Growth Mapping glossary, and the research behind it in the Growth Mapping paper.
H
Holdout
A holdout is a randomly chosen group you deliberately keep away from your marketing, so it can act as the control. Whatever the held-out group does anyway is your baseline; the gap between them and the people who did see the marketing is the real lift. It feels strange to spend nothing on a slice of your audience on purpose, but it is the cleanest way to know what your spend is buying. See how we measure growth.
I
Incrementality
Incrementality is the share of conversions your marketing actually caused, not the ones it merely showed up next to. A retargeting ad that gets “credit” for a sale the customer was already going to make adds zero incrementality — the lift was zero, the cost was real. Measuring it is the whole point of how we measure growth: separating what you caused from what you only witnessed. Test yours with the incrementality calculator.
L
Lift
Lift is the measured gap between what actually happened and the counterfactual baseline of what would have happened anyway. If you’d have booked 100 calls without the campaign and booked 130 with it, your lift is 30 calls — the part that is genuinely yours to claim. It’s the headline number every honest test is trying to produce; see how we measure growth.
LTV:CAC ratio
The LTV:CAC ratio compares what a customer is worth to what they cost to acquire. A client worth $900 who costs $300 to win is a 3:1 ratio. Below 1:1 you lose money on every customer. Around 3:1 or better is healthy. Far above 5:1 usually means you could afford to grow faster. Run yours through the profitability calculator.
M
Microfoundation
A microfoundation is a distinct, codified low-level procedure that a dynamic capability is actually built from. It is the bridge between abstract strategy theory and daily work: in Hiilite terms, a microfoundation is a Play. See the Strategic Taxonomy.
MMM (marketing mix modeling)
Marketing mix modeling is a top-down statistical model that estimates each channel’s contribution to sales from your history of spend and results. Instead of tracking individual clicks, it looks at the whole picture over time and asks which levers moved revenue — handy when cookies and pixels can’t see the full journey. It is the big-picture counterpart to click-by-click MTA; see how we measure growth.
MTA (multi-touch attribution)
Multi-touch attribution spreads the credit for a conversion across the touchpoints a buyer actually saw — the search ad, the email, the retargeting banner — instead of handing it all to the last click. It is more honest than single-touch about the fact that buying is rarely one moment, but it still describes what the customer touched, not what truly caused the sale. Pair it with incrementality testing so the picture isn’t just a flattering one. See how we measure growth.
N
Net profit (vs gross profit)
Gross profit is revenue minus the direct cost of delivery. Net profit is what is left after everything — overhead, rent, software, salaries, taxes. Gross profit tells you if the work itself pays; net profit tells you if the business does. See what a client is actually worth.
P
Play
A play is a reusable, codified procedure you run whenever a recurring situation arises — high reuse, no end date. Every Hiilite skill is a play. It is the level at which knowledge becomes portable: write the trigger, steps, inputs, and success metric, and anyone (or any AI agent) can run it the same way twice. Contrast with a one-off campaign; promote a winning experiment into a play. See the Strategic Taxonomy.
Payback period
The payback period is how long it takes a new customer to earn back what you spent to acquire them. A $500 CAC on a client who delivers $250 of gross profit a year has a two-year payback. Shorter is safer, because cash comes back faster to fund the next customer.
R
Recurring revenue (MRR / ARR)
Recurring revenue is income you can count on repeating — monthly (MRR, monthly recurring revenue) or yearly (ARR, annual recurring revenue). It is more valuable than one-off revenue because it is predictable, which makes everything from hiring to ad spend easier to plan.
Retention rate
Retention rate is the flip side of churn — the share of customers you keep over a period. 20% churn means an 80% retention rate. Small improvements here move profit more than almost anything else, because retained customers cost nothing to re-win. See retention beats acquisition.
Return on investment (ROI)
ROI measures what you got back relative to what you put in, as a percentage. Spend $1,000 and earn $4,000 in profit from it, and your ROI is 300% — three dollars of profit for every dollar in. The honest version counts profit, not revenue.
Return on marketing spend (ROMI)
ROMI is ROI applied specifically to marketing: the profit attributable to marketing, minus what marketing cost, divided by what marketing cost. It is the number most dashboards quietly avoid. Check yours with the marketing-profitability calculator.
S
Strategy
A strategy is a durable, directional set of choices that positions you to meet long-term objectives (Mintzberg; Porter). It is the output of seizing — the level above the standing tactics and plays that carry it out. A strategy says “win the Okanagan market for dental SEO”; the tactics and plays are how. See the Strategic Taxonomy.
Sense, Seize, Transform
The Sense → Seize → Transform loop is how the platform works: Sense the gap in your live data, Seize it by running the right play, Transform by measuring what moved and feeding it back. It comes from dynamic-capabilities theory. See dynamic capabilities and The Agentic Agency paper.
Statistical significance
Statistical significance is your confidence that a difference you measured is real and not just luck. A jump from a 4% to a 5% conversion rate on twelve visitors means nothing; the same jump across thousands probably does. It doesn’t tell you a result is big or important — only that it’s unlikely to be noise — so don’t call a test before the numbers have earned it. See how we measure growth.
Synthetic control
A synthetic control is a counterfactual you build by blending several comparison cases together when no single perfect twin exists. No other town is exactly like the one you advertised in, so you weave a “synthetic” version from a weighted mix of others that, together, behaved just like yours before the campaign. The gap that opens up after launch is your estimated lift. It’s the clever cousin of the geo-test; see how we measure growth.
T
Tactic
A tactic is a standing method or class of action that operationalises a strategy — content-led acquisition, technical SEO — not a single dated instance. Below tactics sit reusable plays and one-off campaigns; above them sits the strategy they serve. See the Strategic Taxonomy.
The 3Ps
The 3Ps are how we decide which move to run next: Profit (will it move the bottom line?), Potential (how much upside?), and People (can the team run it well?). See the 3Ps.
The 3Rs
The 3Rs are the three engines of growth: Recruitment (winning customers), Retention (keeping them), and Revenue (what each is worth). You cannot out-recruit bad retention, and revenue is the scoreboard. See the 3Rs.
FAQ
What is gross margin in simple terms? Gross margin is the percentage of a sale you keep after the direct cost of delivering it. Sell for $100, spend $40 to deliver, and your gross margin is 60%. It tells you what a sale is really worth before overhead.
What is a good LTV:CAC ratio? Around 3:1 or better is generally healthy — a customer is worth about three times what it costs to win them. Below 1:1 you are losing money per customer; far above 5:1 often means you can afford to invest more in growth.
How do I calculate customer lifetime value? Multiply what a customer is worth to you each year in gross profit (not revenue) by how many years they stay. A client worth $500 a year at 60% margin who stays three years is worth about $900 in lifetime gross profit. The LTV calculator does the math for you.
What is incrementality, and why does it matter more than attribution? Incrementality is the share of sales your marketing actually caused — the ones that would not have happened otherwise. Ordinary attribution credits a channel because it appeared before a sale; incrementality asks whether the sale would have happened anyway. A clean test (a holdout or geo-test) measures the real lift so you stop paying for conversions you were going to get for free.
What is a holdout test? A holdout is a randomly chosen group you deliberately keep away from your marketing so it can act as a control. Whatever that untouched group does anyway is your baseline; the gap between them and the people who saw the marketing is your true lift. It is the cleanest way to know what your spend is actually buying.
Why does Hiilite focus on margin and profit instead of revenue? Because revenue can hide a struggling business. Two companies with identical revenue can have completely different profit depending on margin and cost to serve. Decisions grounded in profit are the ones that keep a business healthy.
Looking for the bigger ideas instead of the terms? See the Growth Mapping glossary — the eight philosophies behind the platform. For the full story on honest measurement, read how we measure growth.