SaaS Trivia 3 — Questions and Answers
Question 1: Which of the following best describes 'multi-tenancy' in SaaS architecture?
- A single instance of software serves multiple customers simultaneously (Correct answer)
- Each customer gets a dedicated software instance
- Software is installed locally on each customer's server
- Multiple vendors share a single customer account
Correct answer: A single instance of software serves multiple customers simultaneously
Multi-tenancy means one software instance and infrastructure set is shared across many customers, with data isolation between them.
Question 2: What is the primary purpose of a SaaS 'onboarding' process?
- Help new users quickly realize the product's core value (Correct answer)
- Collect payment information from new subscribers
- Conduct background checks on new enterprise clients
- Train the vendor's support team on a new customer's needs
Correct answer: Help new users quickly realize the product's core value
Onboarding guides new users to their first 'aha moment,' reducing time-to-value and improving long-term retention.
Question 3: Which metric tells a SaaS company how long it takes to recoup the cost of acquiring a customer?
- CAC Payback Period (Correct answer)
- Customer Lifetime Value
- Gross Margin
- Annual Contract Value
Correct answer: CAC Payback Period
The CAC Payback Period measures how many months of subscription revenue are needed to recover the cost spent acquiring a customer.
Question 4: What does 'ACV' stand for in SaaS sales?
- Annual Contract Value (Correct answer)
- Average Churn Volume
- Automated Customer Verification
- Account Conversion Velocity
Correct answer: Annual Contract Value
Annual Contract Value (ACV) represents the average annualized revenue generated per customer contract.
Question 5: In SaaS, what is a 'land and expand' strategy?
- Start with a small sale then grow the account through upsells (Correct answer)
- Acquire a company to enter a new geographic market
- Launch a low-cost product then rapidly raise prices
- Use a physical event to close enterprise deals
Correct answer: Start with a small sale then grow the account through upsells
Land and expand means selling a smaller initial deal to get a foot in the door, then growing revenue by expanding usage or seats within the account.
Question 6: Which of the following is NOT typically classified as a SaaS vertical?
- On-premise ERP deployed on customer hardware (Correct answer)
- CRM for sales teams
- HR management software
- Project management tools
Correct answer: On-premise ERP deployed on customer hardware
On-premise software installed on customer hardware is the traditional software model and is not SaaS, which is cloud-delivered by definition.
Question 7: What is 'product-led growth' (PLG) in the SaaS industry?
- The product itself drives user acquisition, conversion, and expansion (Correct answer)
- A growth strategy led by the product management team
- Growing revenue by launching new product lines
- A methodology for rapid product iteration
Correct answer: The product itself drives user acquisition, conversion, and expansion
PLG makes the product the primary vehicle for acquiring, converting, and retaining users, often through free trials or freemium tiers.
SaaS Trivia 3
Which of the following best describes 'multi-tenancy' in SaaS architecture?