→
| Word | Definition |
|---|---|
Average net revenue per order | |
Customer Acquisition Cost — marketing expense in a period divided by the number of newly acquired customers during the same period. | |
Customer Lifetime Value — Customer lifetime value is the total amount of money a customer is expected to spend with your business, or on your products, during the lifetime of an average business relationship. | |
Total discounted sum of all expected revenues / profits from a customer over their lifetime, before subtracting acquisition costs. | |
Total discounted sum of all expected revenues / profits, after CAC: CLV = (CLV before CAC) – CAC | |
Ratio of CLV after CAC to CAC | |
Revenue generated from repeat purchases | |
Sum of expected future discounted revenues / contribution profits expected to be generated from a customer | |
Average number of purchases made by active | |
The SaaS Magic Number is a widely used formula to measure sales efficiency. It measures the output of a year’s worth of revenue growth for every dollar spent on sales and marketing. | |
The Bessemer CAC Ratio is similar to the Magic Number, but the formula is more defined to new acquisition. A ratio of means 1.0 indicates that within one year you are completely break even on a customer. | |
This is similar to the Bessemer CAC Ratio, but it flips the numerator and denominator and uses MRR to convert this to monthly payback number. |