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SaaS metrics glossary

SaaS metrics glossary.

Plain definitions of the numbers that decide whether a SaaS grows or stalls. Every entry gives the formula, the benchmark that matters and a free calculator to run your own figure. No jargon, nothing stored.

Why it matters

SaaS metrics, the honest version.

Most SaaS metrics are simple to define and easy to misread. This glossary gives you the honest version of each one, the standard formula and the benchmark that actually applies, then sends you to a calculator so the number is yours in seconds.

We built it because we are a SaaS marketing agency and these are the metrics we live in. A CAC measured on media alone or an LTV built on revenue instead of margin sends budget the wrong way. The definitions here are the ones we use with clients.

The terms

Every SaaS metric, defined.

Unit economics
Operations

Revenue operations

The function that unifies marketing, sales and success systems. Why one revenue engine beats three silos.

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Sales

Sales enablement

Arming reps with content, training and tools. Why most of it sits unused and how to build from won deals.

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Growth

Growth loops

Self-reinforcing systems where output feeds the next cycle. How loops compound where funnels deplete.

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Frameworks

Pirate metrics

AARRR: acquisition, activation, retention, referral, revenue. The lesson hiding in the stage order.

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Retention

Customer marketing

Marketing to the customers you already have. Adoption, expansion and advocacy, chronically underfunded.

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GTM

Land and expand

Enter small, prove value, grow from inside. Why the model lowers the entry barrier and compounds.

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Strategy

Category creation

Defining a new market instead of fighting in one. The honest test for whether you should attempt it.

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Targeting

Firmographics

Company-level attributes that bound your targeting. How technographics layer on top.

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Attribution

Dark funnel

The buyer research your analytics cannot see. Why it breaks attribution and how to market into it.

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Sales

Win-loss analysis

Interviewing buyers on why you really won or lost. Why CRM loss reasons are fiction.

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Sizing

Total addressable market

The revenue ceiling if everyone bought. How to size it honestly and why a small true number beats a fantasy.

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Strategy

Account-based marketing

Targeting named accounts as markets of one. How ABM flips the funnel and when it beats demand gen.

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Strategy

Go-to-market

The plan for how you reach and win customers. Why the motion shapes every tactic downstream.

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Retention

Customer success

The function that drives retention and expansion. Why it is a growth engine, not a cost centre.

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Foundations

Marketing funnel

Awareness to decision, TOFU MOFU BOFU. A useful model and why real buyers ignore the tidy path.

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CRO

Conversion rate

The share who take the action. How to calculate it and why the blended number lies.

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Demand

Demand capture

Converting people already looking. How it differs from creating demand and why teams over-fund it.

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Brand

Share of voice

Your presence as a share of the category. Why SOV predicts market share better than most metrics.

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Brand

Brand awareness

How well buyers recall you. The slow asset that makes every other channel cheaper.

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Pipeline

Sales accepted lead

The MQL sales agrees to work. Why the acceptance rate exposes real marketing-sales alignment.

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Operations

Marketing automation

Software that runs workflows on triggers. Why the tool is never the strategy.

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Demand

Lead magnet

What you trade for an email. How to build one that attracts buyers, not just downloads.

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Revenue

Contraction MRR

Revenue lost to downgrades, not churn. The quiet leak that drags down net revenue retention.

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Loyalty

Customer effort score

How hard customers work to get value. Why low effort predicts loyalty better than delight.

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Foundations

Product market fit

The point where demand holds users. The signals that show you have it and why spend scales pain before then.

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Onboarding

Time to value

How long until a new user feels value. Why shortening it lifts activation, conversion and retention.

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Retention

Customer health score

One number that flags churn risk early. How usage, adoption and sentiment combine and where most go wrong.

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Loyalty

Net promoter score

The recommend-likelihood metric. How NPS is scored and why it is a trend, not a single source of truth.

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Attribution

Attribution model

The rule that splits credit across touchpoints. First, last and multi-touch and why every model is wrong.

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Targeting

Buyer persona

The person you must convince inside an account. How it differs from an ICP and why most are fiction.

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Sales

Sales cycle length

Days from first touch to closed-won. What stretches it and the marketing levers that shorten it.

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Demand

Lead nurturing

Staying useful until a lead is ready. Why most nurture is spam and how to nurture on intent.

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Paid

Cost per lead

Spend divided by leads. Why a cheap lead is often the expensive one and what to track instead.

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Engagement

DAU MAU ratio

The stickiness metric. How it is calculated and why it only makes sense for daily-use products.

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Growth

Viral coefficient

New users each user brings, the K-factor. What above 1 means and why almost nobody has it.

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Analytics

Cohort analysis

Grouping users by start date. The retention truths it reveals that blended averages hide.

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Signals

Intent data

The behavioural signals that show a buyer is researching. First-party vs third-party and how to use it without being creepy.

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Strategy

North star metric

The single number a company rows towards. How to pick one and why revenue is usually the wrong choice.

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Retention

Activation rate

The share of new users who reach the value moment. Why it predicts retention better than signups.

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GTM

Product-led growth

The motion where the product drives acquisition. Where PLG fits and the marketing it still needs.

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Targeting

Ideal customer profile

The company that gets the most value from your product. How an ICP differs from a buyer persona.

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Lead stage

Marketing qualified lead

A lead that fits your ICP and shows enough intent for sales. Why most definitions are too loose.

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Lead stage

Sales qualified lead

An MQL that sales has reviewed and accepted. Why the acceptance step matters.

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Lead stage

Product qualified lead

A user who hit a value moment in the product. Why PQLs convert better than MQLs.

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Attribution

Marketing-sourced pipeline

The pipeline marketing first-touched. How it differs from influenced pipeline.

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Discipline

Demand generation

Creating and capturing market interest. Why it is not the same as lead gen.

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Method

Lead scoring

Ranking leads by fit and behaviour. Why most models are over-built.

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Cost per customer

Customer acquisition cost

What you pay fully loaded to win one customer and why it only matters next to LTV.

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Customer worth

Customer lifetime value

The total gross profit a customer brings before they churn, measured honestly on margin.

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Growth efficiency

LTV to CAC ratio

What a customer is worth against what they cost, where 3 to 1 is the benchmark.

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Cash recovery

CAC payback period

How many months it takes to earn back the cost of winning a customer.

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Revenue per customer

Average revenue per user

The average recurring revenue each customer pays and why it drives every other metric.

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Deal economics

Annual contract value

The yearly revenue from one contract and how it sets your whole sales motion.

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Recurring revenue and margin
Monthly revenue

Monthly recurring revenue

The predictable subscription revenue you earn each month and the four parts that move it.

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Annual revenue

Annual recurring revenue

The yearly value of your recurring subscriptions and what does not belong in it.

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Profit kept

Gross margin

The share of revenue left after delivery cost and why software should clear 70 percent.

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Committed vs earned

Bookings vs revenue

Why a signed contract and recognised revenue are not the same number.

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Cheapest growth

Expansion MRR

Recurring revenue added from existing customers and why it beats new logos.

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Retention
Expansion

Net revenue retention

Revenue kept and expanded from existing customers, where over 100 percent is the goal.

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Retention floor

Gross revenue retention

The recurring revenue you keep before expansion and why it caps at 100 percent.

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Revenue lost

Churn rate

The share of customers or revenue you lose each period and how to read it honestly.

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Customers kept

Logo retention

The share of customers you keep by count and how it differs from revenue.

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Growth and capital efficiency
Growth and profit

Rule of 40

Why your growth rate plus profit margin should clear 40 percent.

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GTM efficiency

Magic number

How much new ARR each dollar of sales and marketing buys and why 0.75 is the line.

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Growth quality

Quick ratio

Your gains against your losses in one number and why above 4 is healthy.

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Cash runway

Burn rate

How fast you spend cash each month and how net burn sets your runway.

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Growth momentum

ARR growth rate

How fast your recurring revenue compounds and what good looks like by stage.

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Valuation

SaaS valuation multiple

The number your ARR gets multiplied by and what moves it up or down.

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Capital efficiency

Burn multiple

How much cash you burn for each dollar of new ARR and why under 1 is elite.

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Sales and pipeline
Sales conversion

Win rate

The share of qualified deals your team closes and how it sets pipeline need.

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Pipeline speed

Sales velocity

How fast your pipeline turns into revenue and which lever speeds it up.

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Funnel conversion

Lead to customer rate

The share of leads that become paying customers and how it drives CAC.

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Forecast accuracy

Pipeline coverage ratio

How much open pipeline you need to hit quota and why 3x to 4x is the rule.

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Capacity planning

Sales capacity

How much revenue your team can realistically close once you account for ramp.

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Marketing and acquisition
Paid efficiency

Return on ad spend

How many revenue dollars each ad dollar returns and why the SaaS bar is lower.

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Spend planning

SaaS marketing budget

What share of revenue to spend on marketing and how it shifts by stage.

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PLG conversion

Trial to paid conversion rate

The share of free trials that become paying customers and how to lift it.

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Leading indicator

Lead velocity rate

The month over month growth in qualified leads that predicts next quarter.

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Common questions

About the SaaS metrics glossary.

What is the SaaS metrics glossary?+

It is a plain-English reference for the metrics that decide whether a SaaS grows or stalls. Each entry gives the definition, the formula and a benchmark, then links to a free calculator so you can run your own number. No jargon, no gate, no signup.

Are the definitions free to use?+

Yes. Every definition is free to read and use, forever, with no email gate or signup. Each one pairs with a free calculator that runs in your browser so nothing you enter is stored.

Who writes the glossary?+

We are a SaaS marketing agency and these are the metrics we work in every day. The definitions use the standard formulas and the honest reading, the same one we use with clients.

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