SaaS Dictionary
Average customer life
The total time (in days) of a relationship between a customer and the company.
Annual contract value
It is an average annual contract value of your account subscription agreements.
Average selling price
The amount of revenue per customer generated
Annual Recurring Revenue (ARR)
ARR is the value of recurring subscription revenue that a business will recognize in a calendar year
Annual Run Rate Revenue (ARRR)
ARRR is ARR plus additional revenue that is not attributed to a recurring subscription
Average Revenue Per User
ARPU is the average revenue recognized per user, per month
Break-even
A point when a company generates enough revenue from a customer to cover all the costs and expenses it took to acquire this customer.
Bookings
A Booking is simply the total value of all new deals obtained during a particular period
Burn Rate
Burn rate is the rate per month that a company spends its cash (often venture capital) as it grows before generating profit
Contexual engagement
This happens when the right customer receives the right messages at the right time through the right channel.
Customer acquisition cost
The average amount that a company spends to acquire a single customer.
Customer behaviour index
A metric (often normalized) that measures how engaged your prospects and customers are based on their in-product activity and usage.
Customer churn rate
A percentage of customers lost due to churn (cancellation or failure to renew)
Customer engagement touchpoint
A single moment when a prospect or customer comes in contact with your brand, company, people, product, or message through various channels and devices.
Customer experience
A customer’s perception about a company, brand, or product, based on all touchpoints, interactions, and engagements
Customer experience era
The third wave of SaaS, where customers now research, evaluate, select, and share experiences that feel more like consumer experiences, including multiple touchpoints and interactions
Customer Experience Strategy
An ongoing process of assessing and managing customer experiences across the customer lifecycle
Customer Journey
A series of all touchpoints a customer has with a company, brand, and product to reach a certain milestone.
Customer lifecycle
A framework that describes the process a customer goes through when considering, buying, using, and advocating a product or service. There are four critical stages: acquisition, adoption, retention, and expansion
Customer Lifetime Value
A prediction of the net profit attributable to the entire future relationship with a customer
Customer Onboarding
the process of getting a newly subscribed customer (or account) up and running effectively with your product, including training, account and team member setup and assistance with integrations
Customer Satisfaction Metrics
Shows how engaged customers are, how much value they derive from your product, and whether they will recommend your solution to peers
Days to Break-Even
Measures the average number of days it takes a customer to generate enough revenue to cover the CAC
Days from PQL to Customer
Measures the average number of days it takes a PQL to become a customer
Days from Signup to Customer
Measures the average number of days it takes a prospect to become a customer
Days from Signup to PQL
Measures the average number of days it takes a prospect to become a PQL
Digital Transformation
The change associated with the application of digital technology to all aspects of human society
Dunning
The technical definition of Dunning is “to make insistent demands for the payment of a debt
Engagement Loop
A practice of using insightful in-product usage data, along with engagement tactics, to influence prospects and customers to re-engage with the product and experience more value
Free Trial
A customer acquisition strategy that provides a partial or complete product to prospects free of charge for a limited time
Freemium
A customer acquisition strategy that provides access to part of a software product to prospects free of charge, without a time limit
Go-To-Market (GTM) Strategy
An action plan that describes repeatable and scalable processes for how a company acquires, retains, and grows customers
In-Product Call To Action
This reveals prospects’ buying intentions and helps to drive prospects to PQLs or conversion events
Initial Value Unit
An engagement or set of engagements that advance the customer through a core use case
Loyalty Loop
A continuous process of delivering substantial value and customer experience to keep customers using the product, adopting new features, increasing usage, and renewing
Moment of Joy
The time when a prospect feels the value in the product
Moment of Truth
In marketing, the moment when a customer/user interacts with a brand, product, or service in a way that serves to form or change an impression about that brand, product, or service
MRR Churn Rate
A percentage of MRR (Monthly Recurring Revenue) lost from existing customers at the start of the period for which MRR churn is calculated
MRR Expansion Rate
The percentage of MRR that is gained due to upsells and cross-sells to existing customers for the period for which MRR expansion is calculated
Monthly Recurring Revenue (MRR)
Monthly Recurring Revenue is the amount of monthly subscription revenue generated by a customer
Monthly Recurring Revenue (MRR) Churn Rate
This looks at the rate at which Monthly Recurring Revenue is lost, as a result of downgrades and cancelled subscriptions
Monthly Recurring Revenue (MRR) renewal Rate
The MRR Renewal Rate looks at the rate at which Monthly Recurring Revenue is renewed, as a result of existing customers renewing their subscriptions.
Months to Recover CAC
This SaaS metric calculates the number of months a customer needs to continue paying for their subscription to generate enough revenue to cover the costs of acquiring them.
Net MRR Churn
The percentage of MRR change based on churned and expansion MRR for the same period
Non-Product Engagements
All of the interactions that prospects have outside of your product
Omnichannel Approach
Companies create contextual engagements with customers that look and feel the same across channels and devices
Personalized Customer Experience
An ongoing process of designing and delivering targeted messages and experiences that create meaningful customer engagements
PQL-To-Customer Rate
The percentage of PQLs that convert to customers. It is calculated by dividing the number of customers by the number of PQLs
Product Champion
The person who has the highest level of engagement with your product, and has a good understanding of who will be using your product in his/her organization, as well as which roles each user has
Product Engagements
All of the interactions that prospects have inside of your product
Product-Led Go-To-Market Strategy
An action plan that describes repeatable and scalable processes for how a company acquires, retains, and grows customers, driven by in-product customer behavior, feedback, product usage, and analytics
Product Lifecycle
A framework that helps a company organize its marketing and sales of a product, from introducing it to the market to when sales peak and decline
Product/Market Fit
An experimentation process of finding customers in a target market with a problem that your product can address for a price (or total cost of ownership) well below the level of value that’s provided in exchange
Product-Qualified Lead
A prospect that signed up and demonstrated buying intent based on product interest, usage, and behavioral data
Prospect (user) onboarding
How a prospect moves through initial sign up, experiences initial value, and reaches PQL status
Revenue Backlog
Unrecognized revenue that will become recognized over the term of the contract
Revenue Churn
Churn measured by dollar amount of contracts lost
Revenue Recognition
Revenue becomes recognized from a contract only once it has been earned, whether or not it has been paid in advance
Runway
Months of the runway are how many months of cash the company has to operate at the current burn rate
Signup-to-Customer Rate
The percentage of signups that become paying customers
Signup-to-PQL Rate
The percentage of prospects that complete profile and in-product engagement requirements to become product qualified leads (PQLs)
Unified Customer Profile Data
Your organization’s system of record for all customer profile, company, and behavioral data
Value Gap
The discrepancy between what a customer expects from the product and the value received or perceived
Value-Based Pricing
This involves knowing which product features customers value most
Valued (Golden) Features
These help companies understand which product capabilities deliver customer value and fill the Value Gap
Velocity Metrics
Describes how long it takes a company to achieve certain milestones
Visitor-to-Signup Rate
The percentage of visitors that visit your page and then sign up
Zero Data (Empty State)
What a prospect sees during their initial signup process when no data is available in the product
