Category: Glossary

Introduction In today’s competitive business landscape, having satisfied customers isn’t just nice to have – it’s essential for survival. Studies show that acquiring a new customer costs five times more than keeping an existing one, and satisfied customers are 3.5 times more likely to repurchase and 5 times more likely to recommend your business to…

What Is Scalability in Business? Imagine a bakery that currently serves 100 customers daily. If that bakery is scalable, it can handle serving 1,000 customers without major problems or massive cost increases. That’s scalability – the ability of a business to grow bigger without breaking down or losing money. A scalable business can handle more…

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 a Canned Response? A canned response (also known as a templated response or saved reply) is a pre-written reply or message that you can use repeatedly to answer common questions or respond to recurring situations. How Canned Responses Work Imagine managing a customer service team. Instead of typing “Thank you for contacting us,…

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’s Monthly Churn Rate? Remember playing with water in a bucket that had a small hole? Monthly Churn Rate (MCR) is like measuring how much water you’re losing each month. But instead of water, we’re talking about customers who wave goodbye to your product. The Formula for Monthly Churn Rate Here’s how to calculate it: Monthly…

What is Deferred Value? Imagine you’re building an app. Right now, it has zero users and makes zero money. But you believe it has massive potential in the future. That’s deferred value. The “Instagram Effect” Remember Instagram? When Facebook bought it for $1 billion in 2012, it had: Zero revenue 13 employees Just an app…

What is Gross Churn Rate? Think of your customers like water in a bucket with a hole. Gross churn rate measures how much water you’re losing through that hole, regardless of how much new water you’re adding from the tap. The Basic Formula for Gross Churn Rate Gross Churn Rate = (Number of Lost Customers…

The Basics of Valuation Ever wondered how Instagram was worth $1 billion when Facebook bought it, even though it wasn’t making any money? Welcome to the fascinating world of startup valuation, where potential matters more than current profits. Common Valuation Methods 1. Revenue Multiples The simplest method: taking your annual revenue and multiplying it by…

What’s Enterprise Business? Imagine your five-person startup that makes a cool project management app suddenly grew into Microsoft. That’s basically what enterprise business is – it’s what happens when a business becomes so big it needs an HR department just to manage its other HR departments. Definition Enterprise business typically refers to large organizations that…

Why SaaS Metrics Matter Software as a Service (SaaS) businesses operate differently from traditional companies. Instead of one-time sales, they rely on recurring revenue and long-term customer relationships. While there are dozens of metrics you could track in a SaaS business, we’ll focus on some of the most crucial ones that help understand business health…

What is a Lead Magnet? In simple terms, a lead magnet is something valuable you give away for free in exchange for someone’s contact information, usually their email address. Think of a lead magnet like a free sample at the grocery store. Just as those tasty samples make you more likely to buy the product, a lead…