This series is mainly curated for the new CS Managers and CS Aspirants who are trying to break into CS and build a profile for themselves. We are looking to build a unified repository of all CS-related content for you folks to refer throughout your CSM lifecycle.
For our first post, we figured we would start with the basic abbreviations and terms used frequently in the CS ecosystem. At the end of the post, we will include resources we believe that you should check out to complete the picture.
Terms every new CSM should know before starting in a CS role
KPIs- Key performance indicators
In short, KPIs are the way you measure how well individuals, business units, projects, and companies are performing against their strategic goals. For example, you have a favorite place to cut your hair. The reason you love this place is that the person cutting your hair is:
- Always can do it the way you like.
- Never takes more than 30 min to complete it.
- The place is clean and his equipment is sterile.
- You always have a nice conversation when he is cutting your hair.
SLA- Service Level Agreement
It is basically an agreement between a service provider to the end-user. Let's say you are using your local cable company for television services. Recently you encounter reception issues with some of the channels. You are well organized, so you keep at hand the contract with the cable company and you look at the support section:
- When calling their call center, someone will take your call in less than 10 minutes.
- Once the problem is well understood a technician will be assigned to your case.
- You should accept the visit from the technician in 5 business days.
- Once the technician visits your home, a solution would be provided in additional 5 business days.
ROI- Return on Investment (ROI)
ROI is a performance measure used to evaluate the efficiency of profitability of an investment or compare the efficiency of a number of different investments. You just love pasta. You invest in buying imported pasta from Italy and pay around 30 $ per week to buy it.
Your good friend just told you he bought a machine to prepare home-made pasta, which is just as good as the past you buy. The machine will cost 600 $ and for the sake of discussion, you have all the Ingredients home. ROI will be used to determine if your investment is profitable.
In short, this is the process of getting the customer to start to familiarize or oriented himself with a new product or service. Let's say you are about to start studying in a new university. The onboarding process will include a tour of the campus, attending a panel with different students from different years, and meeting for the first time your professors.
Following the onboarding process comes the adoption process, which basically means to start using the product or service successfully and gain value from it. If we go back to the example of starting to study in a new university, the adoption will be going to your classes on a regular basis, completing all the exams, and living the vivid life of a student.
SaaS- Software as a Service
The best example that comes to mind is when you think about your anti-virus on your laptop that protects you from malware. In the past (if you are old enough to remember) you would buy it as a product and will have a license for life. Nowadays, you will install the software but will buy a license for a period of time (for a month or a year). This allows you to have flexibility in choosing your preferable software, flexibility in choosing the right plan for you, and how much you would like to spend on it.
When using this term in the CS world we talk about a customer that purchased a license for the anti-virus software from the last example (let's say a year) and reach the end of the license period. When approaching this user to extend his license for another year this is basically renewing it.
Let's say the person who purchased the anti-virus software is an admin or IT personal in his or her organization, and when you approached him to renew his license, you heard they are very happy with your solution and would like to purchase 10 more licenses for other workers, that would be an upsell!
Going back to the anti-virus example let's assume your company is selling a different product as well: an operating system (like Windows - only better!). The user which used your anti-virus was so happy he wants to purchase your operating system as well! this is what extension is all about!
Retention is the percentage of all your customers who use the anti-virus and renew their license, which means that as a CSM you would like to keep that number as high as possible!
Churn is quite the opposite, this is the percentage of all your customers who use the anti-virus and don't renew their license, as a CSM most work to keep this number to a minimum!
ARPA / ARPU
Annual Revenue Per Account / User
The estimated Annual revenue the user or the account will give for the 12 months of their subscription.
MRR / ARR - Monthly / Annual Recurring Revenue
The amount that is invoiced to the customer every month / year for their subscription usage.
CLTV - Cumulative Lifetime Value
The total amount spent by the customer on your product/tool until their latest renewal.
CAC / CRC - Customer Acquisition / Retention Cost
The expenditure involved in acquiring a customer / retaining a customer.
NRR - Net Retention Rate / Net Recurring Revenue
The percentage of recurring revenue retained from existing customers in a defined timeline, including expansion revenue, downsizing revenue by reduction & cancellations,
NPS - Net Promoter Score
The lead indicator that conveys the truth about if the customer will advocate or promote your product to their network. NPS score is considered to be one of the important metrics in the business world and even investors ask for it during Board meetings.
CSAT - Customer Satisfaction survey / score
The real time validation of your Customer Service teams and their efforts in solving the problem.
QBR / EBR - Quarterly / Executive Business Review
A meeting between the primary stakeholders from both ends to discuss to retrospect the Quarter in detail and work on improvements in operations.