SaaS Sales Glossary 101: Everything You Need to Know in Plain English

Welcome to our comprehensive guide to SaaS glossary terms! If you’re new to the world of software-as-a-service (SaaS), navigating the industry’s unique jargon can be a daunting task. But fear not, we’re here to simplify it for you. In this blog post, we’ve compiled a wide range of key SaaS terms and their definitions, providing you with a solid foundation of knowledge. Whether you’re a startup founder, product manager, or simply curious about SaaS, this guide will help you demystify the terminology and empower you to speak the language of SaaS with confidence.

SaaS has revolutionized the way software is delivered and accessed, making it increasingly popular in recent years. However, with the rapid growth of the industry comes a plethora of buzzwords and technical terms that can be overwhelming to grasp. That’s why we’ve created this beginner-friendly resource to help you navigate through the SaaS landscape. From customer acquisition cost (CAC) to churn rate, and from customer lifetime value (CLV) to revenue recognition, we’ve got you covered. Each term is explained in a clear and concise manner, ensuring that you understand the concepts and their implications for your SaaS business.

Whether you’re a SaaS startup looking to familiarize yourself with essential business metrics or a professional seeking to expand your knowledge of the SaaS industry, this glossary will be your go-to resource. We’ve gone beyond simply providing definitions by offering insights and perspectives on each term. Additionally, we’ve included further resources for deeper exploration, allowing you to dive into specific topics that interest you the most. So, bookmark this guide and refer back to it whenever you encounter unfamiliar terminology. Let’s embark on this journey together and unlock the power of SaaS with a solid understanding of its language.

1. API (Application Programming Interface) A set of rules and protocols that enables different software applications to communicate and interact with each other.
2. API Economy The ecosystem and business models that revolve around the creation, sharing, and consumption of Application Programming Interfaces (APIs).
3. Artificial Intelligence (AI) The simulation of human intelligence by machines, enabling them to perform tasks such as speech recognition, image processing, and decision-making.
4. Average Customer Life (ACL) The average length of time a customer stays subscribed to a company’s service.
5. Annual Recurring Revenue (ARR) The predicted revenue for a year based on subscriptions or recurring charges, excluding one-time fees.
6. Average Revenue Per User (APRU) The amount of money generated on average from each customer.
7. Average Selling Price (ASP) The average amount of money earned per signup.
8. Bookings The total value of contracts within a specific period, including both subscription and non-subscription revenue.
9. Break-even The point when a company’s revenue covers the cost of acquiring a customer.
10. Burn Rate The monthly rate at which a company spends money before making a profit.
11. Cloud A network of remote servers on the internet used for storing, managing, and processing data instead of local servers.
12. Cohorts Groups of customers who signed up or participated together.
13. Companion Mobile App A mobile application designed to work in conjunction with a software product or service, offering additional features or accessibility on mobile devices.
14. Compliance Adherence to legal, regulatory, and industry-specific standards and requirements related to data protection, privacy, security, and operations.
15. Contextual Engagement Sending the right message to the right customer using the appropriate channel.
16. Containerization The process of encapsulating software applications and their dependencies into lightweight, portable containers to ensure consistency and scalability across different computing environments.
17. Conversion The progression of an individual from being a site visitor to a customer.
18. Cross-selling Offering complementary or related products or services to existing customers to encourage additional purchases.
19. Customer Acquisition Cost (CAC) The average amount of money spent to acquire a single customer.
20. Customer Churn Rate The rate at which customers cancel their subscriptions or fail to renew.
21. Customer Experience How customers perceive and interact with a company, brand, or product.
22. Customer Lifecycle The stages a customer goes through when interacting with a business, including acquisition, adoption, retention, and expansion.
23. Customer Lifetime Value (CLTV or CLV) The predicted net profit gained throughout the entire customer relationship.
24. Customer Relationship Management (CRM) Practices, strategies, and technologies used to manage customer interactions and improve relationships.
25. Customer Retention Cost (CRC) Expenses incurred in efforts to retain customers.
26. Customer Retention Rate (CRR) The percentage of customers remaining after a specific period.
27. Customer Segmentation Dividing customers into groups based on similar characteristics or behaviors to better target marketing efforts and personalize messaging.
28. Data Analytics The process of examining and interpreting data to gain insights, identify patterns, and make informed business decisions.
29. Data Backup and Recovery Processes and procedures for creating copies of data and restoring it in the event of data loss, system failure, or disasters.
30. Data Catalog A centralized inventory or repository that organizes and indexes metadata and information about available data assets within an organization.
31. Data Cleansing The process of identifying and correcting or removing inaccuracies, inconsistencies, or errors in data to improve its quality and reliability.
32. Data Engineering The discipline that focuses on designing, building, and maintaining the infrastructure and systems required for data processing, storage, and retrieval.
33. Data Governance The overall management and control of data assets within an organization, including policies, procedures, and standards for data quality, privacy, and security.
34. Data Lake A centralized repository that stores and manages vast amounts of raw and unstructured data, allowing for flexible analysis and exploration.
35. Data Migration The process of transferring data from one system or platform to another, ensuring data integrity, consistency, and compatibility.
36. Data Mining The process of discovering patterns, insights, or relationships within large datasets using statistical analysis, machine learning techniques, and database systems.
37. Data Privacy Safeguarding and controlling the collection, storage, and usage of personal information in compliance with privacy regulations and user consent.
38. Data Profiling The analysis and assessment of data to gain an understanding of its structure, quality, and completeness before using it for analysis or integration.
39. Data Quality The degree to which data meets the requirements and expectations of accuracy, completeness, consistency, and reliability for its intended use.
40. Data Science The interdisciplinary field that

combines statistical analysis, machine learning, and domain expertise to extract insights and knowledge from data.
41. Data Transformation The process of converting data from one format, structure, or representation to another to enable compatibility, integration, or analysis.
42. Data Virtualization A technology that allows data from different sources or locations to be accessed, integrated, and presented to users or applications as a single, unified view.
43. DevOps A collaborative approach that combines development (Dev) and operations (Ops) teams to enhance software delivery, quality, and deployment through automation, continuous integration, and continuous deployment.
44. Dunning Sending a series of emails to customers who fail to make payments to avoid churn.
45. Enterprise Resource Planning (ERP) A comprehensive software system that integrates and manages core business processes and functions, such as finance, human resources, and inventory.
46. ETL (Extract, Transform, Load) The process of extracting data from various sources, transforming it into a consistent format, and loading it into a target system or data warehouse.
47. Event-Driven Architecture An architectural style that emphasizes the production, detection, and consumption of events to enable loose coupling and scalability in distributed systems.
48. Feature Prioritization The process of determining the order and importance of implementing new features or enhancements based on strategic objectives, customer needs, and business value.
49. Freemium Offering a limited version of software or service for free, with the option to upgrade for additional features.
50. Free Trial Providing full access to software or service for a set period before charging.
51. Infrastructure as a Service (IaaS) A cloud computing service model that provides virtualized computing resources, such as servers, storage, and networking, as a scalable and on-demand service.
52. Internet of Things (IoT) The network of physical devices, vehicles, appliances, and other objects embedded with sensors, software, and connectivity to exchange data and enable automation.
53. Low-Code Development A software development approach that uses visual interfaces and declarative techniques to simplify and accelerate the creation of applications, requiring minimal hand-coding.
54. Machine Learning A branch of artificial intelligence (AI) that enables computers to learn and make predictions or decisions without being explicitly programmed, often used for tasks such as data analysis, pattern recognition, or predictive modeling.
55. Microservices An architectural approach that structures a software application as a collection of small, loosely coupled services, each serving a specific function or feature.
56. Microservices Orchestration The coordination and management of multiple microservices to perform complex business processes or workflows.
57. Mobile App Development The process of creating software applications specifically for mobile devices, such as smartphones or tablets.
58. Monthly Recurring Revenue (MRR) The total revenue expected from subscriptions each month.
59. Multi-Tenancy Hosting multiple companies on a single server.
60. Natural Language Processing (NLP) A field of AI that focuses on the interaction between computers and human language, enabling machines to understand, interpret, and generate human language.
61. No-Code Development A software development approach that allows non-technical users to create applications using visual interfaces and predefined components, without the need for traditional programming.
62. Predictive Analytics The practice of using historical data, statistical models, and machine learning algorithms to make predictions or forecasts about future events or outcomes.
63. Prescriptive Analytics An advanced form of analytics that combines historical data, predictive models, and optimization techniques to provide recommendations or actions for optimal decision-making.
64. Product Engagements The total interactions prospects have with products.
65. Product Life Cycle The stages a product goes through from introduction to market to its eventual decline.
66. Product-Qualified Leads (PQL) Potential customers who have shown interest or intent to purchase based on product usage or behavior.
67. Real-time Analytics The analysis of data as it is generated or received, allowing for immediate insights and actions based on the most up-to-date information.
68. Retention Keeping customers satisfied and engaged to encourage them to stay.
69. Retention Rate The measure of how well a company is retaining its customers.
70. Revenue Recognition Recognizing revenue from a contract when it is earned.
71. Serverless Architecture An architectural pattern where the execution of application logic is managed by a cloud provider, abstracting away the need for server management or provisioning.
72. Service-Level Objective (SLO) A specific, measurable target or goal defined in the Service Level Agreement (SLA) that outlines the expected performance or quality of a service.
73. Service-Level Agreement (SLA) An agreement that defines the expected level of service from a provider.
74. Single-Tenant Architecture A software architecture where each customer or tenant has a dedicated instance of the application or service, ensuring isolation and customization.
75. Software as a Service (SaaS) A software delivery model where applications are hosted and accessed over the internet, eliminating the need for local installation and maintenance.
76. Total Contract Value (TCV) The value of contracts including both one-time and recurring charges.
77. Unified Customer Profile A complete profile of a customer’s activity, history, preferences, and characteristics.
78. User Onboarding The process of familiarizing newly subscribed users or customers with a product or service.
79. User Experience (UX) The overall experience and satisfaction that users have when interacting with a product, system, or service.
80. Value-Based Pricing Setting prices based on the features customers value the most.
81. Value Gap The difference between a customer’s expectations and the perceived value of a product or service.
82. Virtual Private Cloud (VPC) A private, logically isolated section of a public cloud infrastructure that provides additional control and security for applications and data.
83. Virtualization The process of creating a virtual representation or abstraction of computing resources, such as servers, storage, or networks, to optimize resource utilization and flexibility.
84. Web Application An application accessed through a web browser over the internet, eliminating the need for local installation and enabling cross-platform compatibility.
85. Web Hosting The service of providing storage space and access for websites on servers connected to the internet.
86. Zero Trust Security A security approach that assumes no implicit trust and verifies every user, device, or request before granting access, regardless of the network location.
87. Data Visualization The representation of data through visual elements, such as charts, graphs, and infographics, to facilitate understanding and communication of patterns and trends.
88. Version Control The management of changes and revisions made to software code or other digital assets, enabling collaboration, tracking, and rollback to previous states.
89. Continuous Integration (CI) A development practice that involves merging code changes into a shared repository frequently and automatically building, testing, and validating the application.
90. Continuous Deployment (CD) An extension of continuous integration where code changes are automatically deployed to production environments after passing tests and validation.
91. Cloud-Native An approach that leverages cloud computing principles and technologies

to design, build, and operate applications that can fully utilize the capabilities of cloud platforms.
92. Data Masking The process of obfuscating or anonymizing sensitive data to protect privacy and security, often used for non-production environments or data sharing.
93. Collaborative Filtering A recommendation system technique that analyzes user preferences and behaviors to generate personalized recommendations.
94. Gamification Incorporating game elements, mechanics, or design principles into non-game contexts to engage and motivate users.
95. Augmented Reality (AR) A technology that overlays virtual objects or information onto the real world, enhancing the perception and interaction of the physical environment.
96. Virtual Reality (VR) A technology that creates a simulated, immersive environment that can be explored and interacted with through sensory stimuli, typically using a headset or goggles.
97. Blockchain A decentralized and distributed digital ledger that records transactions across multiple computers, providing transparency, security, and immutability.
98. Data Warehousing The process of collecting, organizing, and storing large volumes of structured and semi-structured data from various sources for reporting, analysis, and business intelligence purposes.
99. Software Development Lifecycle (SDLC) The process of designing, developing, testing, deploying, and maintaining software applications throughout their lifecycle.
100. User Interface (UI) The visual and interactive elements of a software application or website that users interact with to perform tasks or access information.