If you are in the SaaS industry and not already tracking metrics – you should be! In this blog post we are keeping things very simple, providing readers with a glossary of definitions for the key SaaS metrics.

If you have any suggestions or recommended additions for the glossary, please reach out to the Teamgate team!

Glossary: SaaS Metrics

Annual Recurring Revenue (ARR) – The total amount of revenue that a company expects to receive on an annual basis from its recurring revenue streams.

Burn Rate – The rate at which a company is spending its available capital, typically measured in terms of how long it would take to exhaust its current cash balance.

Customer Acquisition Cost (CAC) – The cost of acquiring each new customer, including marketing and sales expenses.

Customer Lifetime Value (CLV) – The estimated revenue that a customer will generate over the course of their relationship with a company.

Churn Rate – The percentage of customers who cancel their subscriptions or stop using a product or service.

Gross Margin – The difference between a company’s revenue and the cost of goods sold, expressed as a percentage.

Monthly Recurring Revenue (MRR) – The total amount of revenue that a company expects to receive on a monthly basis from its recurring revenue streams.

Net Promoter Score (NPS) – A measure of customer satisfaction, calculated by asking customers how likely they are to recommend a company’s products or services to a friend or colleague.

Net Revenue Retention – The amount of revenue that a company is able to retain over a given period of time, after accounting for lost revenue due to churn or contractions.

Operating Expenses – The costs incurred by a company to run its business, including salaries, rent, and other overhead costs.

Payback Period – The amount of time it takes for a company to recoup the cost of a specific investment.

Retention Rate – The percentage of customers who continue to use a product or service over a given period of time.

Revenue Churn – The amount of revenue lost due to churn or contractions over a given period of time.

Sales Qualified Lead (SQL) – A lead that has been deemed ready to enter the sales process.

Sales Qualified Opportunity (SQO) – An opportunity that has been deemed ready to enter the sales process.

Upsell Rate – The percentage of customers who upgrade their subscriptions or purchase additional products or services.

User Base – The total number of users of a product or service.

User Churn – The percentage of users who stop using a product or service over a given period of time.

User Retention – The percentage of users who continue to use a product or service over a given period of time.

User Acquisition Cost (UAC) – The cost of acquiring each new user, including marketing and sales expenses.

User Lifetime Value (ULV) – The estimated revenue that a user will generate over the course of their relationship with a company.

Usage Rate – The percentage of users who actively use a product or service over a given period of time.

Average Deal Size – The average revenue generated by a completed sales deal.

Lead Conversion Rate – The percentage of leads that are converted into paying customers.

Marketing Qualified Lead (MQL) – A lead that has been deemed ready for the marketing team to engage with.

Marketing Qualified Opportunity (MQO) – An opportunity that has been deemed ready for the marketing team to engage with.

To learn more about how you could be automatically tracking your sales metrics within your CRM, visit Teamgate today!