CRM & Retention Terms

Account-Based Experience (ABX) is a B2B approach that extends Account-Based Marketing (ABM) beyond the marketing team, coordinating sales, marketing and customer success to deliver...

Account-based marketing (ABM) is a B2B strategy where marketing and sales align around a defined list of target accounts and treat each one as a market of one. Instead of casting w...

Annual Contract Value (ACV) is the average yearly value of a single customer contract. It's calculated by taking the total value of a contract and dividing it by its length in year...

The aha moment is the point where a new user first experiences the core value of a product, and understands why it's worth using. It's the moment scepticism turns into intent. Prod...

ARPA stands for average revenue per account. It measures how much recurring revenue a business earns per customer account, usually calculated monthly. ARPA is total recurring reven...

Average Revenue Per User (ARPU) is the average amount of revenue a business earns from each active user or account over a set period, usually a month or a year. Calculated as total...

ARR stands for Annual Recurring Revenue. It is the annualised value of all active subscription contracts at a given point in time. Calculated by multiplying Monthly Recurring Reven...

Average order frequency is how many times the typical customer buys from you within a set period, usually a year. It's calculated by dividing total orders by the number of unique c...

Bookings is the total value of a contract signed with a customer, recorded the moment the deal closes. Revenue is the portion of that contract value your accounts recognise as the...

Burn multiple measures how much cash a company burns to generate each dollar of new annual recurring revenue (ARR). It's calculated as net burn divided by net new ARR over the same...

A buying committee is the group of people inside a business who together decide whether to purchase a product or service. In business-to-business (B2B) sales, this typically includ...

CAC Payback Months measures how many months it takes for a customer's gross profit to cover the Customer Acquisition Cost (CAC) spent to win them. It is calculated as CAC divided b...

Churn rate is the percentage of customers who stop doing business with you over a given period. Calculated as the number of customers lost divided by the number you started with, e...

Cohort LTV tracks the average lifetime value (LTV) of a group of customers who all joined in the same period, usually the same month. Instead of one blended average across your who...

A cohort retention curve is a chart that tracks what percentage of customers who signed up in the same period are still active over time. Instead of averaging all customers togethe...

Contraction is the loss in recurring revenue when existing customers downgrade, remove seats or reduce their plan without cancelling entirely. It sits opposite expansion revenue in...

Contribution margin is what's left from a sale after subtracting the variable costs directly tied to making and delivering that sale, like materials, shipping and payment fees. It...

Conversational marketing is a strategy that uses real-time, one-to-one dialogue to move potential customers through the buying process. Instead of making people fill out forms and...

Conversion by stage measures how many leads or deals move from one specific stage of a pipeline to the next, rather than looking at the funnel as one blended number. It's calculate...

CRM stands for customer relationship management. It refers both to the practice of managing customer relationships across their lifecycle and to the software used to do it. A CRM s...

Customer Effort Score (CES) measures how much effort a customer felt they had to put in to get an issue resolved or a task completed. Customers answer a single question, usually ra...

Customer lifespan is the average length of time a customer keeps buying from or subscribing to a business before they leave. It's usually calculated as 1 divided by the churn rate,...

Customer lifetime value, or CLV, is the total revenue you expect from one customer over the full length of their relationship with you. Calculated as average order value multiplied...

Customer Success is the proactive function that helps customers achieve the outcome they bought your product for, rather than just fixing problems when they arise. It's a retention...

A deal stage is a label in your customer relationship management (CRM) system that shows where a prospective sale sits in the pipeline, from first contact through to closed won or...

Deferred revenue is money a business has collected from a customer for a product or service it hasn't delivered yet. It sits on the balance sheet as a liability until the business...

Demand generation is the work of building awareness and interest in a problem your product solves, before anyone is ready to buy. Lead generation is the work of capturing contact d...

Expansion revenue is additional revenue earned from existing customers after their first purchase, through upsells, cross-sells, upgrades or add-ons. It excludes revenue from brand...

Gross margin is the percentage of revenue left after subtracting the direct cost of producing or delivering what you sold, known as Cost of Goods Sold (COGS). It shows how much of...

Gross Revenue Retention (GRR) measures the percentage of recurring revenue a business retains from existing customers over a period, counting only churn and downgrades. It ignores...

A health score is a single number that estimates how likely a customer is to renew, expand or churn. It's built by combining signals such as product usage, support tickets, engagem...

Intent data is information that shows a person or company is actively researching a purchase, gathered from behaviour like search queries, content downloads, review site visits and...

Lead generation is the process of attracting people who might become customers and collecting enough information to start a sales conversation. A lead is someone who has shown inte...

Lead grading is the process of scoring how well a lead matches your ideal customer profile (ICP), independent of how engaged they are. It usually produces a letter grade like A thr...

Lead nurturing is the process of building a relationship with leads who are not ready to buy yet by sending them relevant, useful content over time. The goal is to be the first bus...

Lead scoring assigns a numerical value to each lead based on how well they match your ideal customer and how they have behaved. The score tells sales who to call first. A lead who...

Lead Velocity Rate (LVR) measures the month-over-month growth rate of qualified leads entering your pipeline. It shows whether pipeline growth is accelerating or slowing before tha...

A lead is anyone who's given you their contact details. A Marketing Qualified Lead (MQL) has shown enough interest to be worth marketing's attention. A Sales Accepted Lead (SAL) is...

Lifetime value is the total revenue a customer generates over their full relationship with you. Calculated as average revenue per customer multiplied by their average lifetime, oft...

Logo churn measures the percentage of customers you lose in a period, regardless of what they paid. Revenue churn measures the percentage of recurring revenue you lose in that same...

A loyalty program is a structured scheme that rewards customers for repeat purchases or engagement, through points, tiers, perks or discounts. The goal is to increase retention and...

A loyalty programme is a structured system that rewards customers for repeat purchases or engagement, typically through points, tiers, discounts or exclusive access. The goal is to...

LTV stands for lifetime value. It is the total revenue a customer generates over their full relationship with your business. Calculated as average revenue per customer multiplied b...

The LTV:CAC ratio compares Lifetime Value (LTV), what a customer is worth over their relationship with you, against Customer Acquisition Cost (CAC), what it costs to win them. Expr...

The Magic Number is a SaaS efficiency ratio that shows how much new recurring revenue a business generates for every dollar spent on sales and marketing in the prior quarter. It's...

An MQL, or Marketing Qualified Lead, is a contact who has shown enough interest in your product or service that marketing considers them worth passing to sales. The threshold is se...

MRR stands for Monthly Recurring Revenue. It is the predictable revenue a subscription business expects to collect every month from active paying customers. Calculated as the numbe...

Net Promoter Score (NPS) is a customer loyalty metric. It asks customers one question: how likely are you to recommend us, on a scale of zero to ten. Customers scoring nine or ten...

A Net Promoter Score (NPS) breakdown splits survey respondents into three groups: promoters (score 9-10), passives (score 7-8) and detractors (score 0-6). NPS itself is the percent...

Net Revenue Retention (NRR) measures how much recurring revenue you keep from your existing customer base over a period, after accounting for upgrades, downgrades and cancellations...

Gross revenue is the total sales value before anything is taken out. Net revenue is what's left after discounts, refunds and returns are subtracted. Net revenue is the honest numbe...

Net Promoter Score (NPS) is a measure of customer loyalty based on one question: how likely are you to recommend this business to a friend or colleague, on a scale of zero to ten....

Onboarding is the structured process of guiding a new customer or user from sign-up or purchase to their first meaningful experience of your product or service's value. It encompas...

Onboarding activation is the point where a new user or customer experiences the core value of a product or service for the first time, and the rate at which signups reach that poin...

Payback period is the time it takes a business to earn back what it spent to acquire a customer, measured in months. It's calculated by dividing customer acquisition cost (CAC) by...

Pipeline coverage measures whether you have enough sales pipeline to hit a revenue target. It is total pipeline value divided by sales quota for the same period. A coverage ratio w...

Pipeline velocity measures how quickly opportunities move through a sales pipeline and turn into revenue. It combines the number of qualified opportunities, win rate, average deal...

Points and cashback are the two dominant loyalty program structures. Points give customers a currency redeemable for future purchases or rewards, encouraging repeat visits. Cashbac...

Predictive lead scoring is a method of ranking leads by their likelihood to convert, using a model trained on historical data instead of manually assigned points. It looks at patte...

A Product-Qualified Lead (PQL) is a prospect who has used your product, usually through a free trial or freemium plan, and hit a usage milestone that signals genuine buying intent....

Purchase frequency is how many times an average customer buys from you in a given period, usually a year. It's calculated by dividing total orders by the number of unique customers...

Reactivation is the practice of winning back customers who used to buy or engage and have stopped. It usually runs through email, SMS or retargeting aimed specifically at lapsed se...

A referral programme is a structured system that rewards existing customers for introducing new customers to a business. The reward might be a discount, credit or cash, and it's gi...

Referral rate is the percentage of your customers who refer at least one new customer over a given period. It's calculated by dividing the number of customers who made a referral b...

Repeat purchase rate is the percentage of your customers who have bought from you more than once. It's calculated by dividing the number of customers with two or more orders by you...

Retention rate is the percentage of customers a business keeps over a defined period. Calculated as customers at the end of the period minus new customers, divided by customers at...

Retention is whether a customer keeps buying from you. Loyalty is whether they keep buying because they want to, not because switching is annoying. A retained customer stays out of...

The Rule of 40 is a benchmark used mostly in software as a service (SaaS) businesses. It says a healthy company's revenue growth rate percentage plus its profit margin percentage s...

SaaS Quick Ratio is a growth efficiency metric that compares monthly recurring revenue (MRR) gained against MRR lost. It divides new MRR plus expansion MRR by churned MRR plus cont...

Sales cycle length is the average time it takes a lead to move from first contact to a closed deal. It's calculated by tracking the number of days each won deal took, then averagin...

Sales-led growth (SLG) is a go-to-market model where a sales representative drives the buying decision through demos, negotiation and relationship building. Product-led growth (PLG...

SDR stands for Sales Development Representative and BDR stands for Business Development Representative. Both are entry-level sales roles that qualify potential customers before han...

SQL stands for Sales Qualified Lead. It's a prospect that marketing and sales have jointly assessed as ready for direct sales outreach. A SQL has shown enough intent, fit and readi...

Survival Analysis is a statistical method that estimates how long a customer relationship is likely to last before an event such as churn occurs. Borrowed from medical research, wh...

Switching costs are the financial, practical and emotional obstacles a customer faces when moving from one product or provider to another. They include money spent, time lost, data...

TCV stands for Total Contract Value. It's the full value of a customer contract across its entire length, including recurring fees and one-off charges like setup or implementation....

Tiered loyalty is a loyalty program structure that sorts customers into ranked levels, such as Bronze, Silver and Gold, based on spend, frequency or another behaviour. Higher tiers...

Time between purchases is the average number of days a customer takes between one order and the next. It's used to understand purchase frequency, predict when a customer is likely...

Time to Value (TTV) is the length of time between a customer signing up or buying and the moment they experience the actual benefit of the product. Shorter TTV usually means faster...

Viral coefficient, also called K-factor, measures how many new users each existing user brings in through referrals or invites. Calculated by multiplying the number of invites a us...

Win rate is the percentage of sales opportunities that end in a closed sale rather than a loss. It's calculated as deals won divided by total deals closed, counting both wins and l...

A win-back is a targeted campaign aimed at customers who have stopped buying or engaging, trying to bring them back before they churn permanently. It usually triggers after a defin...

Word of mouth is when customers recommend your business to others without being paid to do so. It's the oldest acquisition channel and still one of the most effective. When it happ...