Glossary of terms on profitability factors in business analysis

Factors from the Business Perspective:

 Churn Rate: The rate at which customers cancel or defect within a specific period, typically expressed as a percentage. Formula: (Number of customers who left during the period / Total number of customers at the beginning of the period) * 100

 Development Cost for MVP / PMF / CMF: Costs associated with developing different stages of a product: MVP (Minimum Viable Product), PMF (Product-Market Fit), and CMF (Customer-Market Fit).

 Maintenance Cost: Ongoing expenses to keep the product or service operational, including support, updates, and improvements.

 Cost per Release: The expenses involved in the development and launch process of a new version of the product.

 Revenue: The total amount of money that enters the company from the sale of products or services.

 Lifetime Value (LTV): The expected monetary value that a customer will bring to the company during their lifetime as a customer, taking into account their recurring purchases.

 Profit Margin: The percentage of profit obtained by subtracting production or service provision costs from revenues. In the case of the SaaS model, a high margin is sought, typically between 70% and 80%. Formula: ((Revenues - Costs) / Revenues) * 100

 NPS (Net Promoter Score): A metric that measures customer satisfaction and loyalty. It is based on the question: "On a scale from 0 to 10, how likely is it that you would recommend our product/service to others?" (Values from 41-55 indicate moderate satisfaction).

 Team Turnover Rate per Release: The frequency with which the team experiences changes (entries or exits) in relation to the release of new versions.

 Time per Release: The average time required to launch a new version or update of the product to the market.

Factors from the Technical Perspective:

 Cost per Sprint: The expenses involved in the planning, development, and completion of a sprint in an agile development process.

 Maintenance Cost: Ongoing expenses related to the management and technical support of the product or service.

 Rework Index: A measure indicating the amount of work that needs to be repeated due to errors or issues found during development.

 Team Turnover Rate per Release: The frequency with which team members enter or exit in relation to the release of new product versions.

 Time per Release: The time needed to complete a work iteration, known as a sprint, in an agile development team.

 Time per Sprint (Team Velocity): The time required to complete a work iteration, known as a sprint, in an agile development team.

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