Category: Glossary

Are you trying to understand how much revenue your SaaS business generates from contracts on an annual basis? Annual Contract Value (ACV) is your answer. In this comprehensive guide, we’ll explore everything you need to know about ACV – from basic definitions to practical applications and industry benchmarks. Whether you’re a first-time founder or scaling…

What is Average Customer Life (ACL) in SaaS? Think of Average Customer Life (ACL) like measuring how long customers typically stick around and keep using your software service. It’s basically asking: “Once someone becomes your customer, how many months or years do they usually stay?” Definition of Average Customer Life (ACL) Average Customer Life (ACL)…

What is Month over Month (MoM) Growth Rate? Have you ever wondered how businesses track their progress from one month to the next? That’s where Month over Month (MoM) Growth Rate comes in. It’s a simple way to measure how much something grows or shrinks compared to the previous month. Definition Month over Month (MoM)…

What is Feature Adoption Rate? Feature Adoption Rate measures the percentage of users who actively use a specific feature after its release. This metric is crucial for understanding whether users find value in new features and helps guide product development decisions. How to Calculate Feature Adoption The basic formula for fature aadoption rate is straightforward:…

What is ARPU? Average Revenue Per User (ARPU) measures how much revenue a business generates from each user, including both paying and non-paying users. It’s a key metric for understanding business health and growth potential. Basic Formula and Example ARPU = Total Revenue ÷ Total Number of Users Simple Example: Monthly revenue: $10,000 Total users:…

What is the DAU/MAU Ratio? Simple Definition: The DAU/MAU ratio compares your Daily Active Users (DAU) to your Monthly Active Users (MAU). It shows what percentage of your monthly users engage with your product daily. Formula: DAU/MAU Ratio = Daily Active Users ÷ Monthly Active Users Example: If your app has: 1,000 daily active users…

What are Gross Billings? Simple Definition: Gross billings are the total amount of money a company bills its customers before any deductions, discounts, or adjustments are made. Think of it as the “full price” total of everything a company has sold or provided. Real-World Example: Imagine you’re running a small graphic design business. In one…

What Is Cumulative Gain (Loss)? Cumulative Gain (Loss) represents your total profit or loss picture over time. It’s like keeping a running score of your financial performance, adding each new result to the previous total to see your overall progress. How to Track Cumulative Gain (Loss) Tracking cumulative gain (loss) involves these simple steps: Start…

What Is S&M? S&M stands for Sales and Marketing. It’s the combination of activities a company undertakes to promote its products or services and convert interested parties into paying customers. Components of S&M Marketing: Brand management Advertising Public relations (PR) Market research Sales: Direct selling Account management Sales strategy Customer relationship management (CRM) 👆 Fun…

What Is G&A? G&A stands for General and Administrative expenses. These are the costs a company incurs to keep its daily operations running smoothly, regardless of its production or sales volume. Think of it as the oil that keeps the business machine humming along. Common G&A Expenses Executive salaries Rent and utilities Legal and accounting…

Picture this: you’ve just spent $200,000 building your SaaS platform’s core features. Your accountant asks whether to capitalize or expense it. You freeze. That single decision will cascade through your balance sheet, tax returns, and investor pitch deck for years. According to a 2024 Gartner survey, 63% of early-stage SaaS founders misclassify software development costs,…