Customer Success Metrics & Terms | Churnopedia

A Glossary of the Customer Success Metrics & Terms CS Professionals Need to Know To Understand the Health of Their SaaS Business

You need to be well-versed in measuring customer health in order to advance as a Customer Success professional. Understanding the metrics that SaaS companies use to assess success is fundamental to your ability to make strategic choices, track performance against shared company goals, and ultimately, prove your value as a strong business leader. Use this essential resource (filled with realistic examples) to learn the Customer Success terms, metrics, and formulas that every Customer Success professional needs to know. Be sure to bookmark this page to use as an easy reference.

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Annual Contract Value (ACV)

Annual contract value (ACV) is the average annual revenue generated from every customer contract, not including fees.

Annual Recurring Revenue (ARR)

Annual recurring revenue (ARR) looks at how recurring or subscription-based revenue grows over time.

Average Revenue Per User/Unit (ARPU)

Average Revenue Per User or Unit (ARPU) is the revenue generated per user or unit within a time period, usually monthly or yearly.

Backlog

Backlog consists of revenue that is committed by the customer in advance of their service and is not yet invoiced.

Bad Fit Customer

A bad-fit customer is a customer who is not likely to be successful with the product or service being offered.

Bookings vs. Billings vs. Revenue

Bookings, billings, and revenue are all independently important and interrelated.

Churn Rate

The churn rate is the rate at which you lose customers or revenue within a time period, usually monthly or yearly.

Cohort

A cohort is a specific group of customers, typically categorized by the length of time a customer has been with a company.

Cost of Goods Sold (COGS)

COGS is the cost a company incurs to deliver a product (or service) to its customer and is variable as the company grows and increases sales.

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