How to use this glossary
Skim A–Z or search for a term. Each definition is short, practical, and Shopify-focused.
A–Z terms
AOV
The average amount spent by a customer per order. Track by customer segment; use for VIP thresholds and bundle strategy.
Why it matters: Helps set free‑shipping thresholds, build profitable bundles, and identify VIPs.
Attribution
How you credit marketing channels for a sale. This metric impacts budget decisions, so align your model with Shopify/analytics.
Common models explained:
- Last click: 100% credit goes to the final click before purchase.
- First click: 100% credit goes to the first click that started the journey.
- Linear: Credit is shared equally across all touchpoints.
- Time‑decay: More credit goes to clicks closer to the purchase time.
Why it matters: The model you choose can make a channel look better or worse. Pick one that reflects your buying journey, and keep it consistent when comparing campaigns.
Churn risk
Customers who are likely to stop buying (time since last purchase, low engagement). Tag and trigger win-back flows to re-engage these customers.
CLV
Total expected revenue from a customer over time. Use for retention ROI and loyalty tiers.
Why it matters: It guides how much you can afford to spend to win and keep a customer.
Conversion rate
% of sessions (visits) to the website that complete a purchase. Segment by traffic source, device, and campaign.
Having a good conversion rate means that you will spend less on customer acquisition.
CAC
Total cost to acquire a customer (ads, fees, discounts). Track by channel; compare to CLV.
Why it matters: CAC should be much lower than CLV; monitor by channel to avoid overspending.
First-time buyer
Customer with only one purchase. Tailor onboarding and second-order incentives.
LTV:CAC
Ratio of lifetime value to acquisition cost.
Personalization
Adapting content/offers by segment or behaviour (e.g., tags, recommendations). Increases relevance and conversions.
ROAS
Revenue divided by ad spend. Monitor by campaign to avoid overspend and remain profitable.
Why it matters: Quick health check for ads; pair with profit margins to confirm campaigns are truly profitable.
Segmentation
Grouping customers by behaviour, value, interests, or region to send targeted messages.
Why it matters: More relevant messages, higher conversion rates, fewer unsubscribes, and clearer reporting.
Sessions
Single visits to your store within a time window. One person can have many sessions. Used as the base for metrics like conversion rate.
UTM
Tracking parameters added to URLs (e.g., utm_source, utm_campaign) to attribute traffic and sales.
VIP
High-value customers by AOV or CLV. Offer exclusive perks, early access, and priority support.
Win-back
Campaigns aimed at reactivating lapsed customers (discount, new arrivals, social proof).