SaaS Marketing Blog

So what do all those SaaS acronyms mean?


23rd February 2015

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
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