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If you work in DTC, you’ve heard acronyms like CAC, LTV, or AOV thrown around on investor calls, in Slack, or during hiring conversations. The problem is like other industries, the jargon is at an all time high. And it’s constantly changing.
At Constant Hire, we’ve interviewed hundreds of candidates and partnered with dozens of fast-scaling consumer brands. This glossary distills the most important terms that actually matter in 2025, ranked by how often they come up in real-world conversations and how much impact they have on profit.
Whether you’re a founder, marketer, operator, or recruiter, consider this your crash course.
Customer Acquisition Cost (CAC). CAC refers to the average cost of acquiring a single paying customer. To calculate it, you divide the total amount spent on customer acquisition (usually ad spend) by the number of new customers generated during that same period. For example, if a brand spends $50,000 on Meta Ads in a month and brings in 2,000 first-time customers, their CAC is $25. This number is constantly watched because if CAC creeps too high relative to LTV, the business becomes unprofitable overnight.
Lifetime Value (LTV). LTV measures the total revenue a customer generates over the course of their relationship with your brand. It is typically calculated as average order value multiplied by purchase frequency and customer lifespan. A supplement company, for example, might see customers spend $60 per month for two years, making the LTV $1,440. Knowing this number is essential because it sets the ceiling on how much you can responsibly spend on acquisition.
Average Order Value (AOV). AOV represents the average dollars spent per transaction. To find it, divide total revenue by the total number of orders. Raising AOV through bundling, cross-sells, or subscription upgrades gives a brand more room to spend on acquisition. For many operators, improving AOV is a faster lever than lowering CAC.
Conversion Rate (CVR). CVR is the percentage of site visitors who make a purchase. It is calculated by dividing the number of purchases by total site sessions. Most DTC brands aim for a CVR between 1.5% and 4%. Even small improvements compound dramatically at scale, which is why CRO roles have become so valuable in the last two years.
Click-Through Rate (CTR).
CTR is the percentage of people who click on an ad after seeing it. It is calculated as Clicks ÷ Impressions. If your ad receives 1,000 impressions and 20 clicks, the CTR is 2%. In DTC, CTR is one of the fastest indicators of whether an ad’s creative is resonating with its audience. A strong CTR doesn’t guarantee purchases, but a weak CTR almost always signals the creative needs an adjustment.
Cost per Mille (CPM).
CPM, or cost per thousand impressions, tells you how much it costs to show your ad to 1,000 people. If you spend $100 for 10,000 impressions, your CPM is $10. This metric is especially important on platforms like Meta or TikTok, where auction dynamics can change overnight. Low CPMs can create arbitrage opportunities, but if conversion is weak, low CPM alone won’t save performance.
Contribution Margin. Contribution margin is the revenue left over after subtracting all variable costs, including COGS, shipping, discounts, and transaction fees. This is the money available to cover fixed costs and profit. A brand might report a 70% gross margin, but if free shipping and discounts eat away at it, the contribution margin could tell a very different story.
Blended ROAS and MER. Blended ROAS looks at total revenue generated divided by total ad spend across all platforms. It removes the attribution squabbles between Meta and Google. Marketing Efficiency Ratio (MER) goes one step higher: it takes all company revenue and divides it by all marketing spend. Investors and boards love MER because it shows efficiency in the simplest terms.
Payback Period. Payback period measures how long it takes for a customer to generate enough profit to cover their acquisition cost. For cash-strapped brands, a payback period over 90 days can create cash flow strain. For well-capitalized brands, a longer payback may be acceptable if retention is strong.
Attribution Models. Attribution refers to how you assign credit for a sale across different touchpoints. A first-click attribution model gives all credit to the ad or channel that started the journey, while last-click gives it to the one that closed. Multi-touch models attempt to distribute credit more realistically across the funnel. In 2025, most operators use a mix of platform data, post-purchase surveys, and blended metrics to get a truer picture.
Contribution per Order. Instead of just looking at contribution margin percentage, contribution per order zooms into the absolute dollars earned per transaction after variable costs. For example, if your AOV is $80 and contribution margin is 60%, your contribution per order is $48. This number is especially important in subscription or replenishment models where repeat orders compound over time.
Incrementality. Incrementality has become one of the most debated concepts in DTC marketing. It asks the question: how many of your sales are truly driven by paid ads versus those that would have happened anyway? To measure it, brands run holdout tests, geo experiments, or use third-party tools. Incrementality matters because without it, teams can end up overestimating the impact of ad dollars and scaling spend that isn’t actually profitable.
Media Mix Modeling (MMM). Media Mix Modeling is a statistical approach to attribution that looks at all channels like paid, organic, and even offline (billboards, radio, etc) and uses regression analysis to estimate each channel’s contribution to sales. Unlike platform-reported numbers, MMM doesn’t rely on user-level tracking, which has become increasingly unreliable in the post-iOS14 era. Large brands use MMM to guide budget allocation across Meta, Google, TikTok, and offline channels like direct mail or retail.
DTC brands live and die by ad platforms, and each has its quirks.
Meta Ads Manager: remains the backbone of paid growth for consumer brands. It’s where the majority of acquisition spend still flows, and fluency here is non-negotiable. Google Performance Max has gained traction thanks to its AI-driven campaigns that spread across Search, YouTube, and Display, allowing operators to run more efficient full-funnel campaigns with less manual control.
Google Performance Max. Performance Max campaigns represent Google’s shift toward automation. Rather than running separate campaigns across Search, Shopping, YouTube, and Display, operators feed Google creative assets and product feeds, and the algorithm distributes spend across its ecosystem. The benefit is scale and efficiency; the downside is loss of control. Performance Max is particularly powerful for brands with established search demand and broad product catalogs, such as supplements, home goods, and apparel.
TikTok Shop GMV. TikTok has become more than a top-of-funnel awareness channel. With TikTok Shop, brands can now convert users directly within the app. GMV, or Gross Merchandise Value, measures the total value of products sold through the platform. In 2025, TikTok Shop GMV is a critical metric, especially in beauty, personal care, and fashion.
Amazon 1P vs 3P. Brands selling on Amazon must choose between First-Party (1P) and Third-Party (3P). In the 1P model, you sell wholesale to Amazon, which then sets pricing and controls distribution. In 3P, you sell directly to consumers via Seller Central, retaining more margin but taking on logistics, pricing, and advertising responsibilities. The choice comes down to control versus scale. Many modern DTC brands start 3P for margin and then add 1P for reach once Amazon becomes a major sales channel.
TikTok Shop has exploded in 2025, with GMV becoming a benchmark for success in categories like beauty and accessories. Unlike Meta or Google, TikTok combines both content distribution and point-of-sale, creating new growth dynamics. On Amazon, brands face the 1P vs 3P decision: selling wholesale to Amazon (1P) in exchange for scale but with lower margins, or selling directly through Seller Central (3P) for higher control but more operational work.
Affiliate marketing and influencer whitelisting round out the playbook. Affiliates reward performance with commissions, while whitelisting allows brands to run ads directly from influencer accounts, often boosting trust and click-through rates.
Connected TV (CTV). Connected TV has emerged as a mainstream acquisition channel, with brands running ads across Hulu, Roku, YouTube TV, and other streaming platforms. Unlike linear television, CTV allows for more granular targeting and performance tracking. It’s particularly effective for brands looking to scale beyond social platforms while keeping a measurable link between ad spend and revenue.
Podcast Media. Podcasts have become an increasingly attractive channel for DTC brands because of the deep trust between hosts and audiences. Ad reads are often integrated into the content, which drives higher attention and recall compared to traditional ads. While attribution can be messy, brands often use discount codes or vanity URLs to track performance. For products that require education or trust such as supplements, skincare, or health & wellness brands, podcasts can deliver strong incremental sales.
AppLovin. AppLovin is a mobile advertising platform that enables brands to reach users across gaming and lifestyle apps. For subscription-heavy or app-connected products, AppLovin offers precise targeting and optimization at scale. While it’s not a fit for every DTC brand, those in categories like wellness apps, gaming accessories, or mobile-first products are increasingly using AppLovin as part of their growth mix.
In 2025, creative is the single biggest swing factor in paid performance. Media buying has become increasingly automated using AI what separates winning brands from the rest is the ability to produce, test, and scale creative that actually drives clicks and conversions.
User-Generated Content (UGC). UGC refers to authentic customer or creator-made videos and photos repurposed for ads. Unlike polished studio campaigns, UGC feels native to platforms like TikTok and Instagram. It often outperforms brand-shot content because it mimics the style of organic posts. For many brands, building a pipeline of UGC creators is now a full-time role.
Hook Rate. Hook rate measures the percentage of viewers who stay past the first three seconds of a video ad. It’s the earliest indicator of whether your creative is grabbing attention. On TikTok and Reels, a strong hook rate usually sits in the 25–35% range. Low hook rate almost always signals that the opening scene or caption needs to be rethought.
Thumbstop Ratio. Originally coined by Meta, thumbstop ratio tracks how many scrollers actually stop to watch your ad after it appears in their feed. It reflects whether your opening visual is strong enough to interrupt behavior. In practice, thumbstop ratio is the predecessor to hook rate, where if you can’t stop the scroll, you’ll never earn the click.
Click-Through Rate (CTR). CTR bridges creative performance with actual site traffic. It’s calculated as Clicks ÷ Impressions and indicates how persuasive your creative and copy are at generating action. Even a beautifully shot ad is worthless if CTR is low. That’s why many creative strategists pair CTR with hook rate: one shows you if people are watching, the other if they’re motivated to click.
Hold Rate. Hold rate is a Motion Analytics metric that measures the percentage of viewers who continue watching from one segment of a video to the next. For example, what percentage of people who make it past the 3-second mark also stay until 10 seconds? High hold rates suggest your narrative keeps people engaged, while sharp drop-offs show exactly where the creative loses them.
Scroll Stop Rate. Scroll stop rate measures how effective your creative is at interrupting passive browsing and forcing attention. While similar to thumbstop ratio, scroll stop rate often looks at slightly different breakpoints (like the first second instead of the first three). For brands testing dozens of creatives, this becomes an essential leading indicator.
Creative Fatigue. Creative fatigue occurs when an ad has been served so many times that audiences stop responding. Performance usually begins to drop in CTR, CVR, and ROAS. Motion Analytics can chart fatigue curves, showing how long an ad can run before it needs to be rotated out. For some categories, creative burns out in days; in others, a strong concept can last weeks.
CTR vs CVR Dynamics. Operators often analyze the balance between CTR and CVR. High CTR but low CVR suggests the creative promises something the PDP or checkout can’t deliver. Low CTR but high CVR may signal an ad that resonates with too narrow an audience. Understanding this relationship helps teams know whether to fix creative or landing page experience.
Content Iteration. Content iteration refers to the process of taking top-performing creatives and producing variations like new hooks, different CTAs, alternate edits to extend their lifespan and reduce ad fatigue. Most growth teams run creative iteration as a continuous process, cycling through dozens of variations weekly.
Ad Concept Testing. Instead of relying on gut instinct, brands test multiple creative “concepts” against each other. For example, one concept might highlight social proof, another product benefits, and another a founder story. Motion Analytics allows teams to quantify which concepts outperform across multiple metrics, turning creative development into more of a science than an art.
Your website is where every ad dollar either converts into revenue or disappears. Optimizing site performance is one of the highest-leverage activities in DTC. Operators need to understand not just traffic, but how customers move through the funnel, where they drop off, and what makes them buy.
Product Detail Page (PDP). The PDP is where the majority of purchase decisions happen. It showcases a single product, along with pricing, images, reviews, and descriptions. Well-optimized PDPs go beyond basic information by adding social proof, trust badges, comparison charts, and bundling options. Brands like Glossier or Allbirds have mastered the art of PDP storytelling, making the page feel as much like a lifestyle pitch as a transactional page.
Checkout Funnel. The checkout funnel is the sequence of steps from cart to completed purchase and usually includes cart, shipping, payment, and confirmation. Every unnecessary field or confusing step creates friction. A common example: requiring account creation instead of allowing guest checkout. Many CRO wins come from stripping this flow down and adding trust signals like free shipping thresholds or secure payment icons.
Landing Page Variants. Instead of sending all ad traffic to a PDP, many brands build campaign-specific landing pages. A skincare brand might build one page focused on acne benefits and another on anti-aging, even for the same product. This allows for tighter messaging and higher CVR. The practice of building multiple landing page variants has become standard in media buying playbooks.
Heatmaps & Session Recordings. Tools like Hotjar, Crazy Egg, or FullStory allow brands to see exactly how customers interact with their site. Heatmaps show where users click and scroll, while session recordings let operators watch individual shopping journeys. These tools often reveal simple but costly friction points, like a “Buy Now” button sitting below the fold.
Upsells & Cross-sells. Upsells encourage customers to buy a higher-value version of a product, while cross-sells recommend complementary items. An upsell might push a 3-pack of protein powder instead of a single tub, while a cross-sell might suggest a shaker bottle at checkout. These tactics directly raise AOV and contribution per order without requiring more ad spend.
Subscription Conversion. For consumable or replenishable products, getting customers to subscribe rather than make a one-time purchase dramatically changes LTV. Subscription conversion measures how effectively a PDP or checkout flow nudges customers toward recurring orders. Placement of subscription options, pricing incentives, and UX design all heavily influence this metric.
A/B Testing. A/B testing is the backbone of CRO. By running controlled experiments like testing two PDP layouts, brands can see which version drives higher CVR. The key to strong A/B testing is sample size and statistical significance. Without it, brands risk making changes based on noise rather than signal.
Cart Abandonment Rate. This measures how many customers add a product to their cart and don’t complete the checkout. High abandonment usually signals too much complexity, unexpected shipping costs, or a lack of trust at the payment stage.
No matter how sharp your marketing or product strategy is, execution in DTC runs on software. The right stack can mean the difference between a brand that scales efficiently and one that drowns in manual work. Here are the core tools every operator encounters in 2025:
Shopify. The backbone of modern e-commerce. Shopify powers the storefronts of most DTC brands, offering checkout, PDP/PLP management, and an ecosystem of apps. Operators care about Shopify not just as a platform, but as the hub that integrates with everything else.
Klaviyo. Still the dominant email and SMS marketing platform in DTC. Brands use Klaviyo for lifecycle flows (welcome, post-purchase, winback) and campaign sends. What makes Klaviyo so sticky is its deep integration with Shopify, allowing segmentation by order history, product type, or behavior.
Attentive. Focused primarily on SMS, Attentive gives brands the ability to send personalized text campaigns and flows. SMS open rates hover around 90%+, which makes it one of the highest ROI channels for retention.
Postscript. Another major player in SMS marketing. Operators often debate Postscript vs. Attentive, with Postscript preferred by brands that want more flexible pricing or deeper Shopify-native features.
Motion Analytics. The go-to tool for creative analysis. Motion helps media buyers and creative strategists track metrics like hook rate, hold rate, scroll stop rate, and creative fatigue. Instead of anecdotal “this ad feels good,” Motion provides a data-backed look at which concepts actually scale.
Northbeam. A leading attribution and media measurement tool. In the post-iOS14 world, Northbeam has become indispensable for operators trying to measure incrementality and optimize spend across Meta, Google, TikTok, and more. It offers cohort analysis, payback period tracking, and customer journey mapping.
Triple Whale. A close competitor to Northbeam, Triple Whale has gained popularity with operators who prefer its dashboards and ease of use. Many brands run both at different stages of growth.
Rebuy. A Shopify app that powers upsells and cross-sells. Rebuy uses AI-driven recommendations to suggest add-ons at checkout or on PDPs, directly boosting AOV and contribution per order.
Gorgias. The customer support platform built for e-commerce. Gorgias centralizes tickets from email, chat, SMS, and social, allowing CX teams to automate responses and track resolution times. It’s the industry standard for CX teams scaling past a few hundred tickets per week.
Yotpo. Another powerhouse in reviews, with the added benefit of loyalty and subscription tools. Yotpo often powers both retention and CRO strategies, making it popular for larger brands that want an all-in-one solution.
Recharge. The subscription management platform most DTC brands use to power recurring billing. For consumables like supplements or personal care, Recharge is the engine behind subscription conversion and retention.
Shogun / Replo. Landing page builders that sit on top of Shopify. These tools let marketing teams spin up campaign-specific PDPs and LPs without engineering help. A common play: run paid traffic to a Replo-built landing page tailored to a specific audience or creative angle.
Skio. An emerging subscription platform competing with Recharge. Skio markets itself as a “Recharge killer” by offering faster load times, a smoother checkout experience, and better customer self-management tools.
Junip. A reviews platform that’s lighter-weight than Okendo or Yotpo, often chosen by smaller brands. It integrates quickly and focuses on mobile-first UGC capture.
Shopify Flow / Alloy / Zapier. Automation tools that connect different parts of the e-commerce stack. Brands use them to trigger workflows like “if order value > $200, tag customer as VIP” or “if subscription churn risk detected, send retention email.”
GA4 (Google Analytics 4). The successor to Universal Analytics, GA4 provides event-driven site analytics. Many operators pair GA4 with Northbeam or Triple Whale for a more holistic view of site performance.
The DTC landscape moves fast. Metrics evolve, platforms shift, and the tools that mattered two years ago may already feel outdated. But one thing doesn’t change: brands that understand and act on these terms outperform the ones that don’t. Whether it’s mastering CAC and LTV, optimizing PDPs and checkout funnels, or building retention strategies powered by the right software, fluency in this vocabulary is what separates high-performing operators from the rest.
At Constant Hire, we live in this language every day. From hiring Heads of Growth who can manage incrementality and MER, to finding supply chain leaders fluent in OTIF and inventory turns, to placing CX managers who know their way around Gorgias and NPS - we’ve seen how the right talent turns these terms into results.
If you’re scaling a DTC brand in 2025, you don’t just need bodies on the team. You need operators who already speak e-commerce fluently. That’s where we come in.
👉 Constant Hire is the recruiting partner for ambitious DTC brands. Whether you’re building your first marketing team, upgrading your supply chain function, or looking for leaders who can take your business from $10M to $100M, we’ll help you find and close the talent who makes it possible.
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