SaaS Trivia 5 — Questions and Answers
Question 1: What does 'time to value' (TTV) measure in SaaS?
- How quickly a new customer achieves meaningful benefit from the product (Correct answer)
- The duration of a free trial period
- How long it takes to invoice a new customer
- The time between lead capture and contract signing
Correct answer: How quickly a new customer achieves meaningful benefit from the product
TTV measures the elapsed time from when a customer signs up to when they first experience tangible value from the product.
Question 2: Which revenue metric specifically captures NEW business won in a period, excluding renewals or expansions?
- New MRR (Correct answer)
- Expansion MRR
- Net MRR
- Reactivation MRR
Correct answer: New MRR
New MRR tracks only the recurring revenue added from brand-new customers acquired during a given period.
Question 3: What is a 'champion' in a B2B SaaS sales context?
- An internal advocate at a prospect who pushes for your product's adoption (Correct answer)
- The highest-spending customer in your portfolio
- A salesperson who closes the most deals in a quarter
- A customer who wins an award from your company
Correct answer: An internal advocate at a prospect who pushes for your product's adoption
A champion is an internal stakeholder at a target account who believes in your solution and actively promotes it to decision-makers.
Question 4: Which term describes offering customers a discount in exchange for paying annually rather than monthly?
- Annual prepay incentive (Correct answer)
- Freemium conversion
- Usage cap discount
- Seat compression
Correct answer: Annual prepay incentive
Annual prepay incentives (often 15–20% discounts) improve SaaS cash flow and reduce churn by locking customers in for a full year.
Question 5: In SaaS, what is 'cohort analysis' used for?
- Tracking behavior and retention of groups of customers who started at the same time (Correct answer)
- Comparing pricing tiers across different customer segments
- Analyzing server performance by geographic region
- Grouping features by release quarter
Correct answer: Tracking behavior and retention of groups of customers who started at the same time
Cohort analysis groups customers by start date and tracks how each group retains, churns, or expands over time to reveal trends invisible in aggregate data.
Question 6: What is 'vendor lock-in' in the context of SaaS?
- A customer's inability to easily migrate away from a SaaS vendor due to data, integration, or cost barriers (Correct answer)
- A contract clause preventing a vendor from raising prices
- An exclusivity agreement between a SaaS vendor and a reseller
- When a vendor is acquired and discontinues its product
Correct answer: A customer's inability to easily migrate away from a SaaS vendor due to data, integration, or cost barriers
Vendor lock-in occurs when switching costs—data migration complexity, integration dependencies, or contract penalties—make it difficult for customers to leave.
Question 7: Which SaaS business term describes revenue lost due to customers downgrading to a cheaper plan?
- Contraction MRR (Correct answer)
- Churn MRR
- Compression revenue
- Downsell ARR
Correct answer: Contraction MRR
Contraction MRR captures the decrease in recurring revenue from existing customers who move to a lower-priced tier, distinct from full cancellations.
SaaS Trivia 5
What does 'time to value' (TTV) measure in SaaS?