80 SAAS Acronyms You Should Know
Ever talked to a SaaS entrepreneur and felt like they are speaking a whole different language? Well, you're not alone. SaaS is a complex industry with a lot of jargon and acronyms. I have consulted over 50+ SAAS companies and over the years picked up a lot of acronyms.
So, I decided to compile a list of 80+ SAAS acronyms that you should know. I hope this list will help you understand the SaaS industry better. These acronyms not only help you to communicate better with your SAAS peers but also help you to understand the industry better. Plus you will sound like you know your stuff 😎.
Let's Start with the Mother of all SAAS acronyms - SaaS.
What is SaaS?
Software as a Service is a software distribution model in which software is licensed on a subscription basis and is centrally(Generally, If you ignore Web3) hosted. It is one of the four main categories of cloud computing, alongside infrastructure as a service (IaaS), platform as a service (PaaS), and data as a service(DaaS). SaaS is sometimes referred to as "on-demand software", and was formerly referred to as "software plus services" by Microsoft.
Hey, You already learn 4 acronyms in the above paragraph. How cool is that?
I would highly recommend bookmarking this article and learning 3-4 acronyms each day. Trying to learn all the acronyms in one go will be overwhelming. So, take your time and learn them one by one.
Let's get started with the list of SAAS acronyms.
Acronyms are generally used in SAAS to save time and make communication easier and more efficient. You know SAAS founders are all about efficiency. So, let's get started.
What is ARR?
Annual Recurring Revenue is a metric used by many companies to measure the revenue of their subscription models. It's calculated by adding all the annual values of your subscription revenue.
What is ARRR?
Annual Run Rate Revenue is exactly ARR but with additional income that is not a part of recurring subscriptions. It usually might include specialized services and the cost of implementation strategies.
What is ACL?
Average Customer Life is the overall days/months of association between a customer and a company. In simple words, this is the time when the customer chooses to stay with the company or just simply bail on the services provided.
What is ASP?
Average Selling Price if simply put is the average ticket price of a product or service sold by a company. It is calculated by dividing the total revenue by the number of products sold.
What is ACV?
Annual Contract Value is the average value of subscriptions dealt with customers The average annual contract value of your account subscription agreements is the total annual amount you will pay, on average, in the term of your agreement. This includes both recurring and one-time fees.
What is AOV?
The average Order Value is the average value of a single order. It is calculated by dividing the total revenue by the number of orders.
What is ARPU?
Average Revenue Per User saves your time by being upfront and telling you how much money your company is making. This is the SaaS metric, with which you can easily measure your revenue generation per user.
What is ARPA?
Average Revenue Per Account is the total number of accounts you have divided by the total number of users. This metric helps you understand how much each customer is worth to your business. You can use this information to create targeted marketing campaigns focusing on your most profitable users.
What is ATS?
Applicant Tracking System is a computerized database used by companies to track the progress and status of their recruitment and hiring activities. ATS automates the hiring and recruiting process and is commonly used by large organizations with complex needs. So, a jobseeker applies and uploads their documents through the ATS. It then automatically screens and sorts the resume and cover letter, and sends it to the appropriate recruiter.
What is API?
Application Programming Interface allows two applications to communicate with each other so that users can do more, faster, easier, and better. APIs are useful because they allow developers to build apps that make use of each other's functionality without having to rewrite huge portions of their code. For example, if you're developing a new social media platform and want to integrate with Facebook's messaging system, you could use an API to do so.
What is BR?
Burn Rate is the monthly rate at which a new service provider spends its capital before turning profitable. In other words, it helps understand how long it would take for a provider to keep operating before being able to generate positive cash flows. As a business grows, the amount of cash it requires to be successful will steadily increase. This is why understanding burn rates are important for business and finance parties alike since it will help them set realistic expectations for their venture.
What is B2B?
Business To Business simply means businesses selling to other businesses. Businesses themselves can also use SaaS if they want to use the software for something other than its intended purpose—like if you're a doctor who uses your computer program to write prescriptions instead of using paper or a pen.
What is B2C?
Business To Customer sells directly to an individual and not to a business. The bottom line for B2C companies is about becoming memorable while helping customers help themselves.
What is BANT?
Budget, Authority, Needs, and Timing is the classic reliable method of sales and lead qualification, designed to recognize the leads worth pursuing business. B - if the consumer has the needed budget to make a purchase or not. A - if the direct consumer has the authority to make a purchase or not. N - what will the pain points be reduced by your service? T - when is the preferred time for the lead to make a purchase?
What is CAC?
Customer Acquisition Cost is the capital spent to attract a single consumer. To find out CAC you need to divide the sum of all costs spent on marketing and sales by the number of new customers acquired in the given period.
What is CBI?
The customer Behaviour Index analyzes the activity and usage done by your prospects and consumers to judge how engaged they are in your product
What is CRC?
Customer Retention Cost is the effort and investment laid for activities like training, customer marketing, and service support to retain existing customers. All of these business costs need to be considered under CRC. This can also include the salaries of employees having the area of expertise. As it requires the right kind of tactics to do marketing and service.
What is CRR?
Customer Retention Rate tells the number of customers that stayed with the company after a certain period has passed and it does not include newly boarded customers.
What is CMRR?
Committed Monthly Recurring Revenue predicts the future of a company by the estimated account growth and churn rate of the company. It is calculated by multiplying the number of accounts by the average monthly revenue per account.
What is CET?
Customer Engagement Touchpoint is the interaction between your customers and your brand done through various points like company, employees, and ads. These are the deciding factors of your relationship with your customer. It usually has three stages Before Purchase, During Purchase, and After Purchase.
What is CLTV?
Customer Life-Time Value is the net revenue that might be attributed to the company through the customer's future with the brand. It is capital and name earned by the customer for the company from day one of their first deal till the day it ends.
What is CTR?
Click-Through Rate means: remember when some page asks you to come, join, or read on some different page. That is what CTR is, the ratio of clicks on one posted the link and the number of customers it actually could engage on the page, ad, or email. This metric is the trick to determine the success and effectiveness of online advertising and campaigns
What is CX?
Customer Experience is the opinion of a customer towards their experience with the brand, company, and product. The major determining factors of it are the touchpoints, engagements, and interactions.
What is CRM?
Customer Relationship Management: It is said that maintained communication is the key to a better relationship. So if we talk about CRM, it includes the strategies, tactics, and applied science that is used to scrutinize relations and interactions of a customer throughout their customer lifecycle. The main motive behind this metric is to enhance the customer’s relationship with customer service to advance the business.
What is CTA?
In-product Call To Action is the required action you are asked to take while you're on a website, page, link, or email.
What is CSAT?
The Customer Satisfaction Score is the feedback of customers based on their understanding of a service, product, or event. This is mostly collected through surveys or channels. This information is then put into numerical form to understand and calculate better and expressed in percentages or scores.
What is CDP?
A customer Data Platform is a one-stop system designed for marketing to muster all the data from various sources. Methodize it, furnish it and build unique, incorporated profiles for the customers.
What is CR?
Conversion Rate means - When a leading user of your site decides to finally use it and become your paying customer and then refers the same to someone else, it is a good conversion. And vice versa would be a bad conversion. It is one of the key metrics. Attracting huge traffic to your site can be good for marketing but without CR is impractical.
What is COB?
Close Of Business is when you finish your business hours(operational hours). So countries have different standard times according to which the final business hour is set. Suppose you're given the deadline of 4 pm then it is your COB.
What is DAU?
Daily Active Users is like the daily bit you do to keep track of your growth. On a per-day basis how many unique users you attract is DAU. It is equally based on the average engagement of users with your product. This metric is very telling of the value your product has established.
What is DTC?
Direct To Consumer is the marketing scheme that provides you with the chance of cutting the accustomed distributing mediators and reaching directly to your customers. Without third-party involvement, you can easily sell and distribute your product straight to the majority of consumers.
What is DPA?
Data Processing Agreement is legally bound under General Data Protection Regulation to achieve compliance. What it means is that when two parties come together to do business they must make this agreement. The first party is the Data controller which states the rights, limitations, and obligations concerning the protection of personal data. To save the data from being exploited. The Data processors and regulators become the second party which has to abide by the agreement. While they can also put their preferences in the contract.
What is ERP?
Enterprise Resource Planning is the central nervous system of an enterprise. It coordinates, automates, and integrates all the business processes needed to run all the day-to-day operations. Most or all of an organization’s data should reside in the ERP system to provide a single source of truth across the business.
What is EOD?
The end Of Day is self-explanatory enough for us to understand that it is the end of a business day. EOD is set according to the respective time zones of the sender and receiver. The usual expectation of the assigner is that the employee completes the task given to them by the EOD of their time zone.
What is GTM?
Go-To-Market Strategy is a tactical plan for pursuing a new market with new customers. It involves strategies for expanding your business by conveying the appropriate idea of your product with the right message and time.
What is GRC?
Gross Revenue Churn is the metric that estimates the total loss to a company. It is the MRR percentage loss due to downgrades or cancellations of subscriptions. Like paid plans degrading to lower or free plans. Removing certain services from subscriptions. If GRC is too high then the company should look into what causes it.
What is GDPR?
General Data Protection Regulation is the toughest law made to maintain the privacy and security of personal data collected and processed online. This structure was approved under the EU but is now applied all over the world. The individuals or companies who deny abiding by the rules and limitations of it have to bear fines that could go up to millions.
What is IVU?
Initial Value Unit is yet another self-evident acronym. It is like a starting point for a series of interactions that would guide the clients of the company to go through a critical use case.
What is ICP?
Ideal Customer Profile is the buyer profile perfect for you as a company that would surely buy and use your product and solution. And will give high value in return for your service or product.
What is KPI?
A key Performance Indicator is a metric set to layout and demonstrates how adequately and efficiently the key operations in a business are accomplished. It helps to evaluate the success and growth at reaching goals.
What is MRR?
Monthly Recurring Revenue is expected revenue generated by its customers on monthly basis. It is the only metric used to determine the revenue potential of a brand or an individual. The metric is based on the number of monthly recurring revenue customers a business has, which is calculated by subtracting the sales of existing customers from the total revenue.
What is MDAU?
Monetizable Daily Active Users are the users who are affiliated or were otherwise authenticated, on any given day and can be monetized by adjusting prices of inventory sold, but not according to the same price-point, in order to ensure the balance between supply and demand.
What is MAU?
Monthly Active Users is the number of unique users who visit your site within a month. This statistic can be a good indicator of how much traffic the site receives and is usually pretty accurate for tracking what ads are doing well, how many people are accessing the site (geographically), and how many of the users are still active.
What is MUP?
A minimum Usable Product is a development technique to be used when we already know what the customer needs. The idea is to provide the lowest possible number of features with the least amount of effort and complexity. MUP should be designed so it fulfills the criteria of the project. This should also include the functionality and ease of use of all the features
What is MVP?
A minimum Viable Product is knowledge gathered with the least effort for the new version of a product but allows a collection of the maximum amount of validated learning. Once the team has the initial product concept and defined their requirements, they should take the time to validate what they really need and how it will fit into their solution. Then they can start designing.
What is MQL?
Marketing Qualified Lead is a lead attracted by the marketing efforts or otherwise interested in converting as a customer by what the company has to offer. An MQL should be engaged with a representative of a business or a marketing firm to create a conversation that will lead to the sale of their product. A marketing-qualified lead will likely be more interested in learning about a company or brand than in traditional methods.
What is MBO?
Management By Objective is a strategic management model made to enhance the functioning of a company's well-led operations through the united efforts of the management and employees. It is a tool to control the activities of an organization to get optimum performance in several aspects.
What is MSA?
A master Service Agreement is a legal agreement that makes it so that the parties must comply with agreed-upon terms and conditions to carry on doing business. This means that every aspect of what a company does, whether in the form of physical assets or simply the relationships that exist within a business, must be governed by the MSA.
What is NPS?
Net promoter Score is a measure used to know the customers' overall experience like their satisfaction, enthusiasm, and loyalty towards the brand. It works by asking customers who are actively using your product or service how likely they would be to recommend your company to others. The idea behind the NPS is that, if your business does a good job providing quality products or services, your customers will recommend your company to others.
What is NRRR?
The net Revenue Retention Rate predicts the potential growth of the business by measuring the proportion of earned revenue from constant customers. Higher NRR can improve the rate of new customer acquisition and the overall profitability of a firm.
What is NRC?
Net Revenue Churn refers to how much monthly recurring revenue your business loses in a given period minus the revenue you gain when existing customers upgrade their plans and buy add-ons.
What is NPE?
Non-Profit Engagement In nonprofit nonprofits, engagement can take the form of volunteering, donations, or advocacy. In no To engage the right audience for any of these types of activities, nonprofits should come up with an effective strategy that considers their interests and organizational resources.
What is PQL?
Product Qualified Leads are individuals and businesses who have benefited from using a product due to a free trial, a limited feature model, or other experiences. The goal of a PQL strategy is to convert these lead sources into sales.
What is PCE?
Personalized Customer Experience refers to creating products, services, and interactions specific to your customers. Whether it's greeting your customers by their first names or designing products that meet their likes and interests, personalization is the new brand differentiator. Small gestures like this show they're important to your business and that you're willing to listen.
What is PLC?
The product Life Cycle is the period from when a product is introduced into the market to when it is removed. From pricing and promotion to expansion or cost-cutting, the concept of the product life cycle can help businesses make informed decisions.
What is POB?
Prospect (User) Onboarding is the process of orienting prospective users to a new app, platform, or service as well as becoming proficient with it. Goal-setting, training, and initial experience all play a part in the process. Users can quickly learn how to use the product and obtain value through effective onboarding.
What is POC?
Proof Of Concept is evidence of the feasibility of an idea, business plan, or project plan. It collects feedback and suggestions from your team members to measure the unforeseen risk which might have been ignored normally. The POC is a sort of small project to test the idea. POC exists solely to show that a product concept is both functional and can be developed.
What is ROAS?
Return On Advertising Spend is a marketing metric that tells you how much revenue your company earns for each piece of currency you spend on advertising. By calculating and tracking ROAS, you can see how effective your advertising is. To see if an ad campaign is working, businesses need to track and calculate ROAS. By doing this, companies can learn where they can lower advertising spending (for programs with low ROAS) and which areas to put more money into (by allocating more budget to programs with high ROAS).
What is ROI?
Return On Investment for your investment strategy requires careful consideration rather than using a generic benchmark. ROI is a metric used to understand the profitability of an investment, and it compares how much you paid for an investment to how much you earned from it to evaluate its efficiency.
What is RFP?
A request For Proposal is a project announcement, description, and request for proposals (RFP) that are all contained in a single document. An organization issues an RFP to get quotes from contractors to carry out the project. An RFP specifies the project, its objectives, the sponsoring organization, the bid procedure, and the terms of the contract.
What is RFI?
Request For Information is a form that a business uses to ask suppliers for details on a good or service. In this approach, the business may evaluate several service providers, get a sense of the options each vendor offers, and organize its market research. An RFI can be written in any way. Each company chooses the precise data it wants to gather from various sources. Additionally, it decides how details to seek.
What is SLA?
Service Level Agreement outlines the expectations between the service provider and the client, the products or services that will be provided, the single point of contact for end-user issues, and the metrics used to assess and approve the process's effectiveness.
What is STCR?
Signup-To-Customer-Rate is the percentage of people who register for your product's freemium or trial version and ultimately decide to become paying customers is known as the signup-to-customer conversion rate. The ratio of new paying subscribers to all signups in a given time period is known as the signup-to-customer conversion rate.
What is SAL?
Sales Accepted Lead is a lead that has undergone evaluation and been forwarded to the sales team as an MQL. It indicates that the sales team has determined that an opportunity is worthwhile of being pursued. The selling process starts after a customer becomes a SAL. SALs are typically chosen based on factors such as the lead's job function, company size, industry categorization, and the presence/accuracy of lead information.
What is SEO?
Search Engine Optimization is the process of positioning your website to appear higher on a search engine results page (SERP) to draw in more traffic. For search terms that are most important to your target audience, it is common to try to rank on the first page of Google results.
What is SEM?
Search Engine Marketing is for assisting businesses' content rank higher among search engine traffic. SEM like SEO assists businesses in enhancing the way content is ranked by search engines. Search engine marketing is the most efficient approach to marketing your items and expanding your business because there are millions of businesses competing for the same consumers' attention online.
What is SQL?
Sales Qualified Lead A qualified lead is a potential customer who has been identified by the marketing department, analyzed by the sales department, and who meets the criteria for an ideal client with the desire to buy. To have a healthy book of business, leads must be qualified properly.
What is SKO?
Sales Kick-Off is a meeting held to inspire the entire sales team, develop best sales practices, recognize previous accomplishments, and map out future sales goals and objectives. This gathering encourages everyone in the organization, from the top to the bottom, to achieve their goals and helps set the tone for the upcoming 12 months.
What is SOW?
A statement Of Work is a document that outlines the specifications for a particular project. It outlines the extent of the work being performed, the project deliverables, the deadlines, the place of work, and the terms and conditions of payment.
What is TCV?
Total Contract Value is the term used to describe all revenue coming from a single contract (or customer), including one-time expenses like cancellation fees or onboarding fees. It analyzes the value of a contract after it is signed.
What is TAM?
Total Addressable Market also known as "total available market," is frequently used to describe the revenue opportunity present for a good or service. By acting as a rapid indicator of an opportunity's underlying potential, TAM aids in the prioritization of business possibilities.
What is TCO?
The total Cost of Ownership is the buying price of an asset plus the operating expenses that make up the total cost of ownership (TCO). Buyers should consider both the long-term price of an item, which is its total cost of ownership, as well as its short-term price, known as the purchase price when weighing their options. These are the long-term expenses incurred during the product's use and eventual disposal. Long-term value is best served by the item with the lower total cost of ownership.
What is UCP?
A unified Customer Profile means developing a comprehensive picture of the customer, marketers, and organizations can combine real-time data from all customer journey touchpoints and channels using a unified customer profile (UCP). Companies gain a deeper understanding of their customers as they measure and compile consumer insights. Businesses can use that data to provide customers with better offerings and experiences.
What is UI?
The User Interface is the point of engagement and communication between humans and computers in a device is the user interface (UI). This can include desktop displays, keyboards, mice, and other input devices. It also refers to the method by which a user interacts with a website or application.
What is UX?
User Experience is how a user interacts with and utilizes a product, system, or service. It involves a person's opinions on usefulness, usability, and effectiveness. Most businesses, designers, and producers prioritize improving user experience while constructing and perfecting goods since poor user experience can reduce a product's worth. User experience is a personal matter. The user experience's atoms of an element, however, are objective.
What is VBP?
Value-Based Pricing is a method of setting prices that are primarily based on the estimated value of a good or service by the consumer. Value pricing is client-focused, which means that businesses set their prices based on what they believe a product is worth to the customer. Marketing strategies can be used to decide the price even if value pricing is not a precise science.
What is VPC?
A virtual Private Cloud is an isolated, secure private cloud that is hosted inside of a public. Customers of VPC can perform all of the functions of a typical private cloud, including running code, storing data, hosting websites, and so on, but the private cloud is maintained remotely by a private cloud provider.
What is VPN?
Virtual Private Network masks your online identity by encrypting your internet traffic. This makes it more difficult for outside parties to monitor your internet activities and steal data. Real-time encryption is employed. By allowing the network to route your IP address through a specially set up remote server operated by a VPN host, a VPN can conceal your IP address. This implies that when using a VPN to browse the web, the VPN server becomes the source of your data. As a result, neither your Internet Service Provider (ISP) nor other parties will be able to see the websites you visit or the data you transmit and receive online. A VPN functions as a filter
What is WAU?
Weekly Active Users is the number of distinct users who utilize your program within a 7-day period. WAU is typically employed by companies whose customers are anticipated to interact with the app on a weekly basis (e.g. analytics tools).
Now that you have a better understanding of the most common SaaS terms, you are ready to sound like a pro and have a better understanding of the SaaS industry. Remember, to bookmark this page and share it with your friends and colleagues. This is not an exhaustive list of SaaS terms, but it is a good start to get you started. Happy learning!