Metrics That Matter

The fifteen metrics every revenue leader should know cold: ARR, MRR, ACV, ASP, CAC, LTV, LTV:CAC, payback, gross retention, NRR, gross margin, win rate, sales cycle length, pipeline coverage and quota attainment.

The fifteen metrics every revenue leader should know cold: ARR (annual recurring revenue), MRR (monthly recurring revenue), ACV (average contract value), ASP (average selling price), CAC (customer acquisition cost), LTV (lifetime value), LTV:CAC ratio (target 3:1 or higher), CAC payback period (target under 12 months), gross retention, net revenue retention (NRR; target above 100% for SaaS), gross margin, win rate, sales cycle length, pipeline coverage (typically 3-4x of quota) and quota attainment.

Each of these tells you something different about the health of your revenue function and they should be reviewed in combination, not isolation. A high MRR with poor NRR is a leaky bucket. A strong win rate with a long cycle is a capacity constraint. A short payback with low LTV is an acquisition machine without retention.

The job of the revenue leader is to know which of these is the binding constraint at any moment, and to focus the function on the lever that will materially move the business forward.