7 SaaS Terms Every Tech Founder Must Know In 2024

Average Revenue Per Account

Average revenue per account (ARPA) is a key metric for SaaS companies to assess income per subscription over a specific period, usually monthly or annually.

Customer Lifetime Value

Customer lifetime value is the total expected sales from a single customer over their entire relationship with a company. It's a key metric for SaaS businesses using subscription models.

SaaS Sales Funnel

A SaaS sales funnel is a visual tool used by SaaS companies to track the process of turning potential customers into paying subscribers.

Expansion MRR

Expansion Monthly Recurring Revenue (MRR) measures the extra revenue SaaS companies gain from existing customers each month through upselling to higher plans or cross-selling additional products.

Gross MRR Churn Rate

The gross monthly recurring revenue (MRR) churn rate measures revenue losses from downgrades or cancellations. A high churn rate of 8-9% signals improvement potential but may stabilize to 4-5%.

Net Promoter Score (NPS)

Net Promoter Score, used in the SaaS industry, measures customer loyalty by asking how likely they are to recommend the product or service on a scale of 0 to 10.


Total addressable market (TAM) is the maximum revenue a company can earn from all potential customers for a product/service in a specific market. It’s the total revenue if the product is sold to every prospect in the target market.

Know More About SaaS Terms From Our Glossary