SaaS Dictionary

Aa

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

Bb

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

Cc

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

Dd

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

Ee

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

Ff

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

Gg

Go-To-Market (GTM) Strategy

An action plan that describes repeatable and scalable processes for how a company acquires, retains, and grows customers

Ii

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

Ll

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

Mm

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.

Nn

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

Oo

Omnichannel Approach

Companies create contextual engagements with customers that look and feel the same across channels and devices

Pp

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

Rr

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

Ss

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)

Uu

Unified Customer Profile Data

Your organization’s system of record for all customer profile, company, and behavioral data

Vv

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

Zz

Zero Data (Empty State)

What a prospect sees during their initial signup process when no data is available in the product

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