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In an industry full of acronyms, reaching your full potential as part of a SaaS sales team starts with familiarizing yourself with SaaS sales terminology and understanding how leading sales professionals go about achieving their objectives.
If your goal is generating more leads and closing more deals, you need to be able to understand your buyer’s pain points and speak their language. At the same time, you also need to know which metrics have the biggest impact on sales outcomes — and what you can do to improve those metrics over time.
To give you a better idea of the terminology you’re most likely to come across as a member of a SaaS sales team, we’ve put together this sales acronym glossary that covers five distinct categories:
Keep reading to get a better understanding of the way your buyers think, what matters most to them, and what you should measure to reach your full potential as a sales or GTM professional.
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MRR represents the predictable and recurring revenue a B2B SaaS company generates each month from its subscription-based customers. This metric is used to measure the stability and growth of a customer’s subscription business model.
ARR is the annualized version of MRR, referring to the amount of predictable recurring revenue an organization will earn from subscription-based customers over a year. This provides a clearer picture of a B2B SaaS company’s revenue stream, financial health, and growth potential.
LTV reflects the total revenue a B2B SaaS company expects to generate from a customer throughout their entire relationship. This B2B SaaS acronym helps assess the long-term value of acquiring and retaining the average customer.
CAC is the average total cost a B2B SaaS company incurs to acquire a new customer, including sales and marketing expenses. This metric is critical when it comes to evaluating the efficiency and stability of customer acquisition efforts.
ROI tracks the profitability of investments made in marketing, sales, and product development. In B2B SaaS sales, it quantifies the returns generated from customer acquisition and retention efforts compared to the costs incurred.
TCV measures the total value of a subscription over an entire contract’s term. This metric helps organizations assess the overall revenue potential of an existing customer relationship.
ACV reflects the total value of a contract on an annual basis. Since some customers sign multi-year deals, ACV helps track and analyze revenue contributions from customers over a shorter timeframe, which can be helpful when it comes to financial planning and forecasting in B2B SaaS sales.
The world of B2B SaaS sales is filled with a variety of distinct roles, terminology, tactics, and strategies. In this section, we’ll examine some of the more common B2B SaaS acronyms.
An SDR is a member of the sales team who’s responsible for prospecting, identifying potential leads, and initiating contact with prospects to qualify them before passing them to account executives. Simply put, SDRs play a critical role in the early stages of the sales process.
An AE is a sales team member who establishes and nurtures relationships with prospects, conducts sales presentations and demos, and ultimately closes deals. These folks focus on understanding a customer’s unique pain points and providing tailored solutions to their problems.
A CSM is responsible for ensuring that current customers are satisfied and engaged and are maximizing the value of their subscriptions. CSMs are laser-focused on customer retention and expansion and aim to establish productive long-term relationships with each account.
An SQL is a prospect that the sales team has thoroughly evaluated and determined is highly likely to become a paying customer based on specific qualification criteria and the individual’s engagement. SQLs are ready to interact with the sales team.
An MQL is a lead that the marketing team has determined is potentially interested in a product or service based on their engagement with certain marketing materials. Such leads, however, are usually not ready for direct sales engagement.
An SLA is a formal agreement between a B2B SaaS provider and a customer that outlines the level of service, support, and performance guarantees the customer can expect over the life of the contract. SLAs cover items like service availability, response times, and issue resolution processes.
The ICP is a detailed description of the ideal characteristics and attributes of customer accounts that B2B SaaS companies should target. This helps sales teams prioritize outreach to prospects that align with the product’s value proposition.
Nurturing is the process of cultivating and maintaining relationships with leads and prospects through personalized communication and content in hopes of guiding them through the sales funnel. One of the more common forms of nurturing is outbound sequences.
Upselling is a strategy where sales reps offer existing customers additional products and services to complement or enhance their current subscriptions. By broadening the range of solutions a customer utilizes, companies can increase retention and LTV.
Cross-selling entails selling additional products or services to existing customers that are different from their current subscriptions. For example, an antivirus provider might also encourage customers to buy a virtual private network (VPN) offering. Broadening the range of solutions a customer uses is another way to drive revenue and keep customers engaged.
Onboarding is the process of getting new customers up to speed on a new SaaS product. This involves helping them set up and configure the software, training users to be productive on the platform, and otherwise ensuring a new account starts their subscription off on the right foot.
Churn mitigation refers to a set of strategies and actions aimed at reducing customer churn, which is the rate at which customers cancel their subscriptions or discontinue their service. By mitigating churn, companies aim to protect revenue and achieve financial stability.
Churn analysis is the process of examining customer data to try to identify patterns that indicate why customer churn is occurring. By understanding what’s making customers take their business elsewhere, teams can develop targeted retention strategies based on data-driven insights.
An SAO is a lead or opportunity that has been thoroughly qualified and accepted by the sales teams as a potential deal worth pursuing. Compared to other leads, SAOs are more likely to successfully convert.
A PQL is a lead that has demonstrated significant interest in the product a SaaS sales team offers. Such leads often display behaviors that indicate they may be close to converting into paying customers.
BANT is a lead qualification framework used to assess a prospect’s readiness to make a purchase decision by evaluating their budget, decision-making authority, how badly they need the product, and the timeline for implementation.
A discovery call is an initial conversation between a sales rep and a prospect. These calls are designed to gather important information, understand the lead’s specific needs, and determine whether there’s alignment between the prospect and the product or service.
A sales pipeline is a visual representation of the various stages a lead goes through during the sales process, from initial contact to deal closure. Sales teams use pipeline to track and manage sales opportunities.
A sales funnel is a conceptual model that illustrates the journey that a lead takes from initial awareness to ultimately converting and becoming a customer. Each stage of the sales funnel — awareness, interest, evaluation, negotiation and decision, sales, and renewal or repurchase — represents varying levels of engagement and interest.
Cold calling is the sales practice of reaching out to prospects out of the blue, introducing them to products and services, and getting the sales conversation started. Success at cold calling often requires persuasive communication skills.
Warm calling occurs when reps contact prospects who’ve previously shown some level of interest or engagement with the company’s products. This type of outreach tends to be more personalized and relevant to the lead’s needs.
Objection handling is the art of addressing and overcoming objections or concerns raised by prospects during the sales process. Sales reps can overcome objections with effective communication and problem-solving skills.
Closing is the final stage of the sales process. After negotiating and finalizing contract terms, sales reps secure a commitment from the prospect, which then becomes a paying customer.
Qualification is the systematic process of evaluating whether a lead meets specific criteria for being a potential customer and assessing their readiness to advance further in the sales process.
A demo — or demonstration — occurs when a sales team showcases a product or service’s features and benefits to a prospect. In many cases, SaaS sales demos are given during live sessions to highlight the product’s value and functionality and address any questions in the moment. Sometimes, demos are pre-recorded.
Sales collateral entails marketing materials and resources the sales team uses to support their efforts. Collateral includes items like brochures, sell sheets, case studies, presentations, playbooks, and other informative content.
A sales script is a pre-written set of talking points and guidelines that sales reps follow during conversations with prospects. This enables them to ensure consistent messaging and address key selling points effectively as they move from one lead to the next.
A sales playbook is a comprehensive document that outlines the sales process, strategies, best practices, sales plays, and other tactics a sales team uses to guide their approach.
A competitive analysis involves evaluating and comparing B2B SaaS products and services against the competition and identifying strengths, weaknesses, market opportunities, and threats. Using this research, companies can make smarter strategic decisions.
In sales, forecasting is the process of predicting future sales performance and revenue based on historical data, current trends, and market conditions. Forecasts give businesses the insights they need to support business planning and optimize resource allocation.
The sales cycle represents the duration from initial contact with a prospect to closing a deal. Generally speaking, the length of the sales cycle is determined by the complexity of the product or service and the unique sales process each rep uses. Leading reps often try to speed up sales cycles to close more deals faster.
Sales enablement is the act of equipping sales teams with the tools, resources, training, and support they need to effectively perform their roles and achieve sales objectives.
Lead scoring is the process of assigning a numerical value to leads based on their characteristics and behavior. This enables sales teams to prioritize leads for engagement and effectively allocate resources.
Territory management involves the strategic allocation of sales reps across geographic or demographic regions to maximize their coverage, increase the effectiveness of their outreach, and ensure resources are utilized efficiently.
Sales team structure refers to a sales organization’s hierarchy. It encompasses the roles, responsibilities, chains of command, and overall framework for achieving sales goals.
Sales compensation is the system an organization uses to reward salespeople with commissions, bonuses, and other incentives based on their performance and sales achievements.
A sales cadence represents a structured sequence of outreach activities — including calls, emails, and meetings — that sales reps follow when engaging with prospects. For example, a rep might send an email today, call the prospect in three days, follow up with an email two days after that, and then call the following week to request a meeting.
A sales quote is a formal document given to a prospect that outlines a product or service’s pricing information, contract terms, and other details of a proposed sale. This document helps prospects during the negotiation stage as both sides work together to finalize a deal.
Negotiation is the process of engaging with a prospect or customer to reach an agreement on the terms, pricing, and conditions of a deal. Successful negotiators are effective communicators who are highly empathetic and possess superior problem-solving skills.
A deal desk is a specialized team or function within a sales organization that’s tasked with reviewing and structuring complex or non-standard deals to ensure they align with company goals and are profitable.
According to a recent report from Harvard Business Review, 88% of organizations agree that customer engagement is critical to success. Since engaged customers are more likely to stick around and spend money, be sure to familiarize yourself with the following terms.
Customer engagement refers to the ongoing interaction between a SaaS company and its customers. It encompasses activities like communication, customer support, and product usage that add up to foster a strong relationship, encourage product adoption, and promote loyalty.
Customer success is a popular strategy among SaaS companies that focuses on ensuring customers achieve their desired outcomes with the product. This involves proactive support, monitoring usage, and providing guidance to ensure customers continue to unlock value from the software and maximize ROI.
Customer satisfaction is a metric used to determine how satisfied a customer is with a SaaS product or service. Teams usually determine this score by surveying customers and asking them to rate their satisfaction (e.g., on a scale of 1 to 5). This metric helps companies gauge their performance and identify areas of improvement.
Churn refers to the rate at which customers cancel their subscription or stop using the product (e.g., a freemium service). All SaaS sales orgs aim to reduce churn as much as they can to maintain a healthier customer base and achieve financial stability.
A retention rate is the inverse of a churn rate. It quantifies the percentage of customers that continue to use a SaaS product or service over a specific period of time (e.g., one month or one year). A high retention rate indicates strong customer loyalty and product value.
A Net Promoter Score is a customer loyalty metric that measures how likely a user is to recommend a company’s products and services to someone else. Sales teams ask customers to indicate, on a scale of 1 to 10, how likely they are to recommend products, and customers are then classified into three groups: promoters (those who indicate 9 or 10), passives (7 or 8), and detractors (0 through 6).
In SaaS, UGC refers to content like product reviews, testimonials, and social media posts that users create. Such collateral can be particularly valuable for SaaS companies, as it provides authentic endorsements and insights that can positively influence would-be customers’ decisions.
Since top-performing SaaS sales teams engage regularly with marketing, make sure you have a firm grasp of the following terms and concepts.
ABM is a strategic approach to SaaS sales where efforts are focused on targeting and engaging specific high-value accounts or businesses instead of a general audience. This approach involves personalizing marketing campaigns and content tailored to the needs and interests of individual accounts.
The marketing mix — also known as the 4 Ps — includes the four fundamental elements companies should use to influence customer purchasing decisions. These include product, price, place (channels), and promotion (marketing). SaaS sales teams must balance these elements to execute a successful go-to-market strategy.
A target audience refers to a specific group of individuals or businesses that a SaaS company aims to reach and influence with its marketing and sales efforts. Target audiences are based on factors like demographics, behaviors, and interests.
Brand identity encompasses the visual and messaging elements that define a SaaS company’s brand. Such elements include logos, imagery, colors, font, tone of voice, and core values. A seamless brand identity helps create a recognizable and consistent image in the minds of customers and prospects.
Content marketing is a marketing strategy that entails creating and sharing valuable, relevant, and educational content to attract leads and engage customers. In SaaS sales, this often includes blog posts, ebooks, videos, and other materials that help raise brand awareness and build trust with potential customers.
Inbound marketing is a marketing approach that aims to attract prospects through content and experiences that align with their needs and interests. SaaS companies that use inbound marketing hope to entice potential customers to their offerings by publishing valuable content instead of using traditional outbound advertising methods.
Outbound marketing involves proactively reaching out to prospects through tactics like cold calling, email marketing, and traditional advertising (e.g., direct mail). This is a more straightforward approach to lead generation and — due to its proactive nature — helps promote products to a wider audience.
SEO is the practice of optimizing a SaaS company’s website and online content to improve its visibility in search engine results. Effective SEO strategies help drive organic traffic and improve the website’s ranking on search engines.
Lead generation is the process of identifying and attracting potential prospects who have expressed interest in a SaaS product. It involves the combination of several tactics, including content marketing, email marketing, and social media marketing, with the goal of converting leads into paying customers.
An SERP is the page you see after conducting a search on a site like Google, Bing, or DuckDuckGo. SERP pages are displayed in response to user queries. In SaaS sales, marketing and SEO teams are laser-focused on appearing prominently on relevant SERPs to increase visibility and drive organic traffic.
An ESP is the software SaaS companies use to send, manage, and analyze email marketing campaigns. It helps automate email marketing efforts, track engagement, and optimize email content for better results with the intended recipient.
Of course, top-performing SaaS sales teams are also equipped with tools that help them cover more ground and accomplish more every day. Brush up on these terms to increase the chances you invest in tools that help your team do their best work.
SaaS is a software distribution model where applications are hosted and maintained by providers and accessed over the internet by customers on a subscription basis. As a result, customers are able to use the software without the need for traditional installation or maintenance, making it a cost-effective, scalable solution.
In SaaS, an API is a set of rules that allows different software applications to communicate and interact with one another (e.g., for passing data back and forth to maintain a single source of truth). APIs are often used to integrate SaaS products with other systems, enhancing the functionality of each platform.
UX refers to the overall experience and satisfaction users have when interacting with SaaS products. It encompasses the design, usability, and accessibility of the software. According to McKinsey, companies with top-quartile design scores outperform industry benchmarks by as much as two to one.
UI is the graphical and visual design of a SaaS application, including elements like buttons, menus, layout, and search. A well-designed UI is essential for providing an intuitive interface, which enhances the overall UX.
CRO is the process of improving a SaaS company’s landing page or website to increase the percentage of visitors who complete the desired task (e.g., such as signing up for a trial or downloading a gated asset). It involves testing and optimizing various elements of each digital property to maximize conversions.
PPC advertising is a model where advertisers pay a fee every time a user clicks their ads. In SaaS sales, PPC campaigns are commonly used to drive website traffic and generate leads or conversions.
CPM refers to how much advertisers pay for every 1,000 impressions or views of their ads. This metric is often used to evaluate the cost-effectiveness of reaching a broad audience in display advertising campaigns.
CPC is an advertising metric that represents the cost advertisers pay for each click on their ads. This is critical in PPC advertising campaigns, helping advertisers assess the efficiency and profitability of their efforts.
A CTR represents the number of clicks on an online ad or link compared to the number of times it was shown (impressions). This helps marketers evaluate the effectiveness of various campaigns to determine which are working best and which need optimization.
CRM software — like Salesforce and HubSpot — helps SaaS sales teams manage interactions and relationships with customers and prospects. CRM solutions provide tools that make it easy to track and organize customer data, communications, and sales activities, which helps increase customer engagement and streamline sales processes.
As you can see, the world of SaaS sales is full of an endless amount of acronyms and other terms you need to know to reach your potential as a rep or member of a GTM team. Jump into SaaS sales without a working knowledge of many of these terms, and you might as well be living on another planet.
On the flipside, by studying these terms and integrating the associated knowledge into your daily practices, you can get even better results over time.
The ever-evolving B2B SaaS landscape moves faster every day. By committing to continuous learning, being adaptable, and adhering to industry best practices, you can keep pace with the rapid change the industry is known for while speaking to buyers in a language they understand and — ultimately — closing more deals.
What’s not to like?
To learn more about how today’s most effective SaaS sales teams close more deals, read our free guide: The modern prospecting workflow.