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Sales & Revenue terms
Pipeline, forecasting and revenue operations: the numbers a sales organisation runs on.
Annual recurring revenue (ARR) The value of a subscription business's recurring revenue, normalized to a one-year run rate. Average deal size The mean revenue value of closed-won deals over a period, found by dividing total value by deal count. Average revenue per daily active user (ARPDAU) The average revenue earned per daily active user, a monetization metric common in mobile games and free-to-play apps. Average revenue per user (ARPU) The average revenue generated per subscriber or user over a defined period, typically a month or year. Bookings, billings, and revenue Three distinct SaaS figures often confused: signed contract value, amount invoiced, and amount recognized as earned. CAC payback period How many months it takes for the gross margin a customer generates to repay the cost of acquiring them. Conversation intelligence Software that records, transcribes and analyzes sales or support calls to surface talk patterns, objections and coaching cues. Expansion revenue Additional recurring revenue from existing customers, through upsells, cross-sells, or usage growth. Gross revenue retention (GRR) The percentage of recurring revenue kept from an existing customer base after churn and downgrades, excluding any expansion. LTV:CAC ratio (customer lifetime value to customer acquisition cost ratio) The ratio of what a customer is worth over their lifetime to what it costs to acquire them. Monthly recurring revenue (MRR) The value of a subscription business's recurring revenue, normalized to a one-month run rate. Net revenue retention (NRR) The percentage of recurring revenue kept from an existing customer base, including expansion and after subtracting churn. Pipeline coverage The ratio of open sales pipeline value to a revenue target, used to judge whether enough deals exist to hit it. Quota attainment The percentage of an assigned sales quota that a rep, team or organization actually achieved in a period. Revenue management The discipline of selling the right unit of fixed, perishable capacity to the right customer at the right price and time. Revenue operations (RevOps) The function that aligns sales, marketing and customer success operations, data and systems around one revenue process. Rule of 40 A SaaS benchmark stating that growth rate plus profit margin should add up to 40% or more. Sales cycle length The average time from an opportunity being created to a deal closing, either won or lost. Sales forecasting Predicting future sales volume or revenue from pipeline data, historical trends or statistical models. Sales velocity A single measure of how fast a sales team generates revenue, combining pipeline volume, deal size, win rate and cycle time. Same-store sales (comparable-store sales, comps) Revenue growth measured only at locations that were open throughout both the current and prior comparison periods. Territory planning Dividing a market into sales territories, by geography, account size or industry, to balance opportunity and workload. Unit economics The direct revenue and costs attributable to a single unit, such as one customer or one transaction. Win rate The share of sales opportunities that close as won, out of all opportunities that reached a final decision.