Acronyms & Performance Metrics

The average annualized revenue value of a single customer contract, commonly used in B2B SaaS to normalize deals of different lengths (monthly, annual, multi-year) into a consistent yearly figure.

The average dollar amount a customer spends per transaction, calculated as total revenue divided by number of orders.

Total revenue divided by the number of active users or customers over a given period, typically monthly or annual.

The predictable revenue a subscription business expects to receive over a full year from active subscriptions, typically calculated as MRR multiplied by 12.

The percentage of new signups or trial users who complete a specific early action considered to indicate they've experienced the product's core value — sometimes called the "aha moment."

Shorthand describing who a business primarily sells to. B2B (business-to-business) means a company's customers are other businesses. B2C (business-to-consumer) means customers are individual consumers. B2B2C describes a business that sells through another business to eventually reach an end consumer.

The percentage of website visitors who leave a page without taking any further action — clicking through to another page, submitting a form, or engaging further — commonly measured at the page or session level.

The total sales and marketing cost required to acquire one new customer, typically calculated by dividing total acquisition spend by the number of new customers gained in a period.

The amount of time it takes for the revenue generated by a new customer to recover the cost spent acquiring them (CAC), typically expressed in months.

A metric measuring how much effort a customer had to expend to accomplish a specific task or resolve an issue, typically gathered via a survey asking respondents to rate how easy or difficult an interaction was.

The cost of a single desired outcome — commonly a sale, but the term is also used for any defined action (a signup, a download, a form fill), depending on how a campaign defines "acquisition."

The amount an advertiser pays each time someone clicks a paid ad, calculated as total spend divided by total clicks.

The cost of acquiring one lead — typically a person who has submitted contact information or expressed interest, but has not yet become a paying customer.

The cost an advertiser pays for one thousand impressions of an ad, regardless of clicks or engagement. ("Mille" is Latin for thousand.)

A metric measuring satisfaction with a specific interaction, transaction, or experience, typically gathered through a short survey immediately following that interaction, often scored on a simple scale (e.g., 1–5).

A prompt — usually a button, link, or line of copy — that tells the audience exactly what to do next: "Sign up," "Start your free trial," "Learn more."

The percentage of people who see an ad, email, or link and click it, calculated as clicks divided by impressions (or opens, for email).

The percentage of visitors or recipients who complete a desired action — a purchase, a signup, a form submission — out of the total who had the opportunity to do so.

Counts of unique users who engage with a product within a given time window — daily, weekly, or monthly — used to measure the actual size of an engaged user base, as distinct from total registered users.

Daily active users divided by monthly active users, expressed as a percentage, used as a proxy for how habitual or "sticky" a product is — a higher ratio means active users are coming back more days out of the month.

A business model in which a company sells its products directly to end consumers, bypassing traditional intermediaries like retailers, wholesalers, or distributors.

The percentage of all sessions that end on a specific page, regardless of how many other pages the visitor viewed earlier in that same visit.

The total dollar value of all bookings or transactions made through a platform before deducting fees, commissions, cancellations, or refunds. Common in travel, hospitality, and marketplace businesses.

The total dollar value of goods sold through a platform over a given period, before deducting fees, returns, or discounts. Common in e-commerce and marketplace businesses.

A detailed description of the type of company or customer that gets the most value from a product and is most likely to become a successful, retained customer — typically defined by firmographics (industry, company size, revenue) in B2B, or demographic and behavioral traits in B2C.

A specific, measurable metric chosen to track progress toward a defined goal — the handful of numbers a team has agreed actually indicate success, out of all the metrics that could be tracked.

The total revenue a business can expect to earn from a single customer over the entire span of their relationship with the company.

A measure of overall marketing efficiency calculated as total revenue divided by total marketing spend across all channels combined, as opposed to ROAS calculated for a single channel or campaign in isolation.

An MQL is a lead that marketing has determined shows sufficient interest or fit to warrant further attention, typically based on behavior (content downloads, website visits) or firmographic fit. An SQL is a lead that sales has further vetted and accepted as ready for direct sales engagement.

The predictable revenue a subscription business expects to receive every month from active subscriptions, normalized to a monthly figure regardless of billing frequency.

Depending on context, either (a) the value of new customer contracts signed in a period, excluding renewals or expansions of existing accounts, or (b) net booking value — bookings after cancellations and adjustments are deducted. The specific meaning depends on the industry; always confirm which definition a given report is using.

A customer loyalty and satisfaction metric based on a single survey question — "how likely are you to recommend this to a friend or colleague," scored 0–10 — with respondents grouped into promoters (9–10), passives (7–8), and detractors (0–6), and the final score calculated as the percentage of promoters minus the percentage of detractors.

The percentage of recurring revenue retained from existing customers over a period, including the effects of upgrades, downgrades, and churn, but excluding revenue from new customers. Expressed as a percentage, where above 100% means expansion revenue is outpacing losses from downgrades and churn.

Revenue reported after subtracting cancellations, refunds, chargebacks, and similar deductions from gross revenue — the actual revenue a business retains, as opposed to the total value of transactions initially booked.

A lead who has demonstrated buying intent through actual product usage — for example, a free-trial user who hits a usage limit or engages heavily with a premium feature — as distinct from a lead qualified purely by marketing engagement (MQL) or by sales conversation (SQL).

The total value and set of open sales opportunities a business is currently working, typically organized by stage (e.g., qualified, proposal sent, negotiation) and often measured in dollar value.

The ratio of total open pipeline value to a revenue target for a given period, used to assess whether there's enough opportunity volume in progress to realistically hit that target, accounting for the fact that not every opportunity in the pipeline will close.

The revenue generated for every dollar spent on advertising, typically expressed as a ratio (e.g., "4x ROAS" means $4 in revenue for every $1 spent).

A general measure of profitability calculated as the gain from an investment relative to its cost, typically expressed as a percentage: (gain − cost) / cost.

A rule of thumb for evaluating SaaS company health, stating that a company's growth rate plus its profit margin (typically measured as revenue growth % + profit margin %) should equal or exceed 40%.

The average amount of time it takes for an opportunity to move from first becoming a qualified opportunity to closing (won or lost).

A nested framework for sizing a market opportunity. TAM is the total market demand for a product category if there were no constraints. SAM is the portion of TAM a specific company could realistically serve given its business model and current offering. SOM is the portion of SAM the company could realistically capture given competition and go-to-market constraints.

The full value of a customer contract across its entire committed term, without normalizing to an annual figure.

Shorthand for the three broad stages of a marketing funnel: TOFU (top of funnel) covers awareness-stage content for people who don't yet know they have the problem a product solves; MOFU (middle of funnel) covers consideration-stage content for people evaluating solutions; BOFU (bottom of funnel) covers decision-stage content for people close to a purchase decision.

The percentage of sales opportunities that result in a closed-won deal, calculated as deals won divided by total opportunities (won plus lost) in a given period.