A comprehensive guide to 32 SaaS acronyms and terms.
In the world of marketing, there are a lot of SaaS acronyms and terms that can be confusing for even the most experienced marketers. To help you out, we’ve put together this guide of the most common marketing SaaS acronyms and terms.
1. Account-Based Marketing (ABM) is a strategy in which businesses focus their marketing efforts on specific accounts rather than on general leads. Account-based marketing (ABM) is a strategic approach to business marketing that focuses on individual accounts and specific customer segments rather than a broader, generic approach. ABM involves creating a tailored marketing plan for a particular customer or set of customers, typically targeting key decision-makers within the account and seeking to create long-term relationships with them.
2. Average Contract Length (ACL): Average Contract Length is the average duration of all signed customer contracts. This metric is helpful for businesses to gauge how long their customers are likely to stay with them. By knowing the average contract length, a business can better predict how much revenue they can expect to earn from existing customers in the future.
3. Annual Contract Value (ACV): The annual contract value (ACV) is the total value of a customer’s contract over the course of a year. This metric is important because it can help you to predict future revenue and cash flow. The higher the ACV, the more stable your revenue will be.
4. Average Revenue per Account (ARPA): The average revenue per account (ARPA) is the average amount of revenue that you generate from each customer account. This metric is important because it can help you to identify which customer segments are most valuable to your business.
5. Average Revenue per User (ARPU): The average revenue per user (ARPU) is the average amount of revenue that you generate from each user of your software. By understanding their ARPU, companies can determine the minimum size of accounts they need to target to be profitable.
6. Annual Recurring Revenue: Annual recurring revenue (ARR) is a metric used by businesses to track and measure the amount of annualized revenue they are on track to generate at any given point in time. This metric can be used to help businesses track and forecast their overall performance, as well as measure the effectiveness of their marketing and sales efforts.
7. Average Selling Price (ASP): The average selling price as a service (ASP) is the average price that you charge for your software as a service. This metric is important because it can help you to determine your pricing strategy and compare your prices to those of other software provider.
8. Business-to-Business (B2B) marketing is the process of marketing a product or service to businesses rather than consumers. B2B businesses typically sell products or services that are used by other businesses, such as office supplies or software. B2B marketing can be very different from marketing to consumers, as businesses tend to be more rational in their decision-making. They also tend to have longer time horizons to arrive at these decisions, and have different needs and wants than individuals.
9. Business-to-Consumer (B2C) marketing is the process of marketing a product or service to consumers rather than businesses. B2C businesses typically sell products or services that are used by individuals, such as clothing or food. B2C marketing can be very different from marketing to businesses, as individuals tend to be more emotional in their decision-making and have different needs and wants than businesses.
10. Business-to-Business-to-Consumer (B2B2C) B2B2C is a business model where a company sells products to other businesses, which in turn sells the products to consumers. This type of business model is common among online retailers, who often sell to both businesses and consumers. B2B2C can be a profitable model for companies that are able to find the right suppliers and customers.
11. Customer acquisition cost (CAC) is the amount of money that a company spends in order to acquire a new customer. The CAC can be calculated by dividing the total marketing and sales expenses by the number of new customers acquired. For example, if a company spends $100,000 on marketing and sales expenses and acquires 1,000 new customers, then the CAC would be $100.
12. Customer Churn Rate (CCR): The customer churn rate (CCR) is a metric that measures the percentage of customers who cancel their subscription or stop using a service within a given time period. Understanding the types of churn rate for SaaS and how to calculate them is important for SaaS companies, as it can help them to identify and address potential problems with their product or service. A high CCR can indicate that a company’s products are not meeting the needs of its customers, while a low CCR may suggest that the company is doing a good job of keeping its customers satisfied.
13. Customer lifetime value (CLTV) is a metric that businesses use to measure the profitability of a customer over their lifetime. The CLTV metric takes into account a number of factors, including the customer’s purchase history, retention rate, and referral rate. Businesses that know how to calculate customer lifetime value can help them make better decisions about marketing and sales strategies, product development, and customer service.
14. Cost Per Lead (CPL): This metric measures how much it costs to generate a lead. This is important because it can help to determine the effectiveness of a marketing campaign.
15. Customer Retention Cost (CRC): CRC stands for customer retention cost. It is the amount of money that a company spends to keep a customer over a period of time. This includes costs such as customer success, customer support, marketing, and product development. CRC is important because it can help a company determine how much it needs to spend to keep a customer happy and loyal.
16. Customer Retention Rate (CRR) is a metric used to measure the percentage of customers who stay with a company over a given period of time. CRR is an important metric because it allows companies to track how well they are retaining their customers. CRR measures how many customers stay, while churn measures how many leave. CRR is a key metric for companies because it’s an indicator of customer satisfaction and loyalty.
17. Click-Through Rate (CTR) is a metric that measures the percentage of people who click on an ad or link after seeing it. CTR is a key indicator of how effective an ad or link is in terms of driving traffic to a website or landing page. A high CTR indicates that people are interested in the ad or link and are more likely to click on it. A low CTR indicates that people are not interested in the ad or link and are less likely to click on it.
18. Infrastructure as a Service (IaaS): IaaS is a type of cloud computing that allows businesses to rent access to infrastructure, such as servers and storage, from a provider. This can be beneficial for businesses as it can save money on upfront costs and allow for more flexibility.
19. Ideal Customer Profile (ICP) Your ideal customer profile (ICP) is a description of your ideal customer, including demographics, firmographics, technographics, and behaviors. Defining your ICP early is critical because it is needed for downstream activities such as creating targeted content, marketing campaigns, lead scoring models, and even customer success campaigns.
20. Initial License Value (ILV): The initial license value is the total value of all licenses purchased by a customer during their first year of use. This includes all licenses for software, services, or other products.
21. Lead-to-Customer Conversion Rate (LVR) Your lead-to-customer conversion rate is the percentage of leads that become paying customers. This metric is a good way to measure the effectiveness of your lead generation and conversion optimization efforts.
22. Marketing Qualified Lead (MQL) is a lead who has been determined to be more likely than other leads to become a paying customer by meeting certain criteria set by the marketer, such as having engaged with the brand in some way or shown interest in the product or service being offered. MQLs are typically passed on from the sales team so that they can focus on selling to customers who are more likely to convert into paying customers.
23. Monthly Recurring Revenue (MRR): Monthly recurring revenue is the portion of a subscription that is paid each month. This metric is important because it can help to predict future revenue and cash flow
24. Platform as a Service (PaaS): PaaS is a type of cloud service that provides users with a platform for developing, testing, and deploying applications. PaaS platforms typically include everything that is needed to build and run an application, including operating system, programming language runtime environment, database, and web server.
25. Product/Market Fit (PMF): Product/market fit is the degree to which a product or service meets the needs of a particular market. A company achieves product/market fit when it has developed a product or service that meets the needs of its target market. achieving product/market fit is essential for any company that wants to be successful in the long term.
26. Return on Advertising Spend (ROAS) is a metric that measures how much revenue is generated for every dollar spent on advertising. ROAS shows how to measure the ppc campaign success and compare it with other campaigns or objectives. A high ROAS means that the campaign is generating a lot of revenue for every dollar spent, while a low ROAS means that the campaign is not performing as well as it could be.
27. Return on Investment (ROI) is a metric that measures how much money is earned for every dollar spent on an investment. ROI can be used to measure the profitability of an investment and compare it with other investments. A high ROI means that the investment is generating a lot of money for every dollar spent, while a low ROI means that the investment is not performing as well as it could be
28. Software as a Service (SaaS): SaaS is a type of cloud computing in which software is delivered as a service over the internet. SaaS applications are typically accessed via a web browser or mobile app. SaaS providers typically charge their customers on a subscription basis, with prices based on the features and functionality of the software. This definition in particular is near and dear to our hearts because Bay Leaf Digital is a SaaS marketing agency.
29. Sales Qualified Lead (SQL): Sales Qualified Lead is a lead that has been vetted by the sales team and determined to be a good fit for the company’s products or services. The criteria for determining whether a lead is qualified can vary from company to company, but typically includes factors such as budget, authority, need, and timeline. Once a lead is determined to be qualified, it is then passed on to the sales team for further follow-up.
30. Sales Accepted Lead (SAL): A Sales Accepted Lead (SAL) is a marketing qualified lead (MQL) that has been reviewed and passed to the sales team for approval. The SAL has met all of the qualifications set by the marketing team, but still needs to be approved by the sales team before it can be considered a customer.
31. Total Contract Value (TCV): The total contract value (TCV) is the value of all products and services that will be delivered under a contract over its lifetime. The TCV includes all one-time fees as well as recurring fees such as monthly or annual subscriptions. The TCV can be used to compare different contracts in order to determine which one offers the best value for money.
32. Unique Selling Proposition (USP): A unique selling proposition (USP), also known as Unique Value Proposition (UVP) is an element of a company’s marketing strategy that sets it apart from its competitors. A USP should be something that is unique to your company and that your target market finds valuable. For example, Hubspot’s USP is they bring together three critical organizational components of marketing, sales, and customer service under one roof to enable easy collaboration. This is unique because Hubspot makes a very difficult business problem easier to accomplish.
These are just a few of the many SaaS acronyms you’ll encounter in the world of marketing. Familiarizing yourself with this jargon will help you communicate more effectively with colleagues and better understand the ever-changing landscape of SaaS marketing.
