In the world of SaaS marketing we’re often inundated with acronyms, heck, even the industry (SaaS) is an acronym.
Listed below are some common SaaS acronyms, with definitions:
- LTV: Lifetime Value: The total (or average) amount a customer will spend over time on your product
- MRR: Monthly Recurring Revenue: The total monthly subscriber revenue your business has from all subscribers
- ARR: Annual Recurring Revenue: The total annual subscriber revenue your business has from all subscribers
- CPA or CAC: Cost per acquisition or Customer Acquisition Cost: The average cost of getting one new customer. This includes sales and marketing costs
- ROI: Return on investment: How much revenue you get form your investment in marketing
- LPC: Lifetime Profit per Customer: Remove the acquisition costs, and costs of maintaining the customer to get your lifetime profit
- ARPC: Average Revenue per Client
- ARPU: Average Revenue Per User: A client will likely have many users
- ARRR: Annual Run Rate Revenue: ARR + revenue not attributed to recurring subscription such as deployment fees, training and other professional services
- ASP: Average selling price: The average price of a subscription per month, year and so on and should be greater than CAC (customer acquisition cost)
- BR: Burn Rate: The monthly rate at which a new service provider spends its (venture) capital before turning profitable
- CR: Churn rate: Shows the rate at which the clients/customers are canceling/not renewing their subscriptions during a time period
- CLV or CLTV: Customer Lifetime Value: The recurring profit over the lifetime of a customer minus CAC (customer acquisition cost)
- CMRR: Committed Monthly Recurring Revenue: A projection of the monthly recurring revenue (MRR) into the future accounting and is used to anticipate churn and account expansion
- CRC: Customer Retention Cost: Costs related to retaining existing customers, including marketing, renewal, promotion and other service costs
- CRR: Customer Retention Rate: The rate at which customers are retained from the start till the end and does not include any new customers
- TCV: Total Contract Value: The total contract value that is calculated as (one-time and recurring charges) - (usage charges)
- ACL: Average Customer Life: The total time (in days) of a relationship between a customer and the company
- CBI: Customer Behavior Index: Measures how engaged your prospects and customers are based on their in-product activity and usage
