An MQL becomes an SQL when the sales team confirms the lead has enough interest and is a fit for a discovery call to initiate a sales conversation.

An SQL becomes an Open Opportunity when they confirm your company could provide a viable solution to their problem and decide to continue the sales process by exploring your products and services in greater detail.

Purely generated by marketing activities, e.g. paid/organic traffic. Mutually exclusive from Opportunities sourced from Outbound Sales.

Cold calls/emails and networking. Mutually exclusive from Opps sourced from marketing.

SDRs are responsible for outbound prospecting. They research and reach out to prospective clients who might be interested in the products your company sells, and introduce those clients to the company. They generate Open Opps.

A salesperson responsible for closing sales deals to create new customers.

MQL -> SQL -> Open Opp -> Closed Won Opp -> Setup Phase -> Live/Fully Onboarded

Signed Customers that didn’t become Fully Onboarded

Revenue that repeats each month from SaaS product as well as ongoing professional services.

A = Client ARR $ from 12 months prior
B = Current ARR $ of clients from only that same cohort

NRR = B/A

NRR can be above 100% due to upsells.

Same as NRR, but instead of $ it’s client count. By definition, this maxes out at 100%.

An annual churn rate: (1 – NRR)

An annual churn rate: (1 – Logo Retention Rate)

For an average customer, the total expected gross profit (ARR – cost of revenue) to be recognized over the course of the customer’s lifetime.

Expected Lifetime is calculated in years as: 1 / Logo Churn.

The formula is:

ARR * Gross margin / Expected Lifetime

In a given period:

(Sales and marketing – salaries and overhead for Account Management) / # of closed won opportunities

Accounts Receivable

Travel and Entertainment expense