Three-Letter Acronyms (TLA)

Photo by Charles Deluvio on Unsplash

I can still remember one of my first Marketing team meetings where the presenter relayed number after number, each associated with a different set of letters. For fear of looking like an idiot, I didn’t ask what they meant and just checked with my manager after the meeting. Turns out, the TLA (or three-letter acronym) is a well-known point of confusion, especially when companies invent their own. 

So, I’ve compiled a list of commonly-used acronyms for your reference. All quoted definitions are from Wikipedia unless otherwise noted. If you’ve encountered others, please let me know in the comments! 

KPI: Key Performance Indicators

“A quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.”

This is basically the catch-all term for any kind of measurement. A KPI could be one of the measurements listed below (like CPL - Cost Per Lead) or something else like the number of new web page visits. I’ve used tools like Asana to track my incoming design project requests, as well as the number of tasks completed and overdue.

OKR: Objectives and Key Results

“A goal-setting framework for defining and tracking objectives and their outcomes.”

Personally, these have been more aspirational than practical in my experience. They can take a long time to define–often well into the quarter or year they’re supposed to track–and in fast-moving companies an OKR can become irrelevant within a couple months. That said, they are indicators of a company’s plans for the future. If you take a step back to look at what is being measured, you can infer how success is defined at your organization.

If you’ve been asked to come up with OKRs for your team or even for yourself and need help, send me a message. I’ve created and tracked them for creative teams and individuals. 

CAC: Customer Acquisition Cost

“The cost of winning a customer to purchase a product/service.”

Fun fact: these are my initials! It’s also a pretty straightforward, and very common, term that tells you how much it costs the company to acquire a new customer. Common sense suggests that you want this number to be lower than how much the customer spends, but this isn’t always the case...

TAM: Total Addressable Market

“A term [used] to reference the revenue opportunity available for a product or service [that] helps to prioritize business opportunities...”

This is, essentially, how many people could potentially buy your product or service. 

T/M/BOF: Top, Middle, Bottom of Funnel

Sometimes called ToFu, MoFu, and BoFu, these terms refer to the stage of a purchase funnel. At the top, you’re building brand and product awareness through things like blog articles. In the middle, you’re starting to educate your audience through more direct efforts, such as advertising. At the bottom of the funnel, your goal is conversion (purchase) driven by direct messaging and offers.

CPM: Cost Per Mille

“[The] cost an advertiser pays for one thousand views or clicks of an advertisement.”

This is one of those metrics that shows up in spreadsheets, but is never really talked about. I would love to hear about anyone’s experience with this metric in the comments.

CPL: Cost Per Lead

“[Where] the advertiser pays for an explicit sign-up from a consumer interested in the advertiser's offer. It is also commonly called online lead generation.”

This indicates the amount that it took to get a person to take an action, like signing up for your email list or filling out a form online. 

CTR: Clickthrough Rate

“[The] ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement.”

I see this most often in online paid advertising and email marketing. For paid ads, it’s the number of people who click the ad divided by the number of people who saw the ad. As you can imagine, it’s usually a very small percentage. For emails, it’s the number of people who opened the email divided by the number who clicked on a link within the email. 

MQL: Marketing Qualified Lead

“[A] lead who has been deemed more likely to become a customer compared to other leads.” (definition via Hubspot)

If someone has indicated interest in your product or service by visiting your website, maybe downloading some stuff, or liking your Facebook page, they can earn this title. To put it in online dating terms, they’ve swiped right but haven’t sent you a message yet.

SQL: Sales Qualified Lead

Not to be confused with the programming language.

Once an MQL has been vetted and deemed likely to purchase, they become an SQL. Again, I find this easiest to think of in terms of dating: you’ve exchanged a few messages and are ready to schedule a first date. 

LTV: Lifetime Value

“[A] prediction of the net profit attributed to the entire future relationship with a customer.”

I’m just going to continue with the dating metaphors: you’ve been dating for a bit, you’ve engaged in some kind of commitment activity, and you’re now assessing whether or not this person is going to provide what you need for foreseeable future. 

ROI: Return On Investment

“[A] ratio between net profit (over a period) and cost of investment (resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favorably to its cost.”

So, you decided to get married. Look back at how much you spent on coffee, movies, and the wedding, then compare it to your happiness today. Ideally, it was all worth every penny.