What are the long-term metrics that you prioritize reviewing in running your organization?
The specific answer here will depend on the type of organization (e.g. B2B/B2C), target segmentation (e.g. Enterprise/SMB) and go-to-market model (e.g. Product Led Growth, Sales Driven). I'd suggest looking at this through teh framework of of leading indicators (input metrics) and lagging indicators (output metrics) which are aligned with your buyer's journey and then determine over which time period it makes sense to evalute these metrics. Factors such as sales cycle will play heavily into these decisions. If we decompose revenue, it's comprised of # of deals * ASP + recurring revenue from your installed base (taking a simplistic view) which are all output metrics. To look at the underlying health of the business in the short-term, I'd look at the input metrics that drive the # of deals, ASP and installed base health and ensure that there are clear drivers aligned to these metrics within the organization. For medium-term to long-term, I'd look at diagnostic metrics to look at the composition of your output metrics (in this case, revenue) and look at what channels and demand sources helped to generate this revenue (e.g. BDRs, Marketing Leads, Partners, eCommerce, PLG, Services). You might look at this on a trended or quarterly basis and assess the relative efficiency or effectiveness of these channels and work with your leadership team to discuss what pivots or shifts you should consider making to accelerate sales velocity.
Your metrics are divided into run the business and long range plan.
Run the business:
Long Range Plan:
Competitive Win Rate
Partner Revenue & Growth
Revenue role productivity
Profitability - big one in our current market
Total Addressable Market
There are a variety of others but the real difference is what will sustain your business vs meet your annual targets.
Balancing short- and long-term health is essential, it defines the pace at which the company makes its inroads, even if it already achieved some "financial independence" through a healthy LTV/CAC ratio. When thinking about the long term, I’d think mostly of productivity ($/HC), NRR, profitability and vintaged data. Zooming in:
Productivity: Analyze sales HC productivity by product/service, sales approach (acquisition, renewal, upsell, etc.), and market/segment. Comparability is key to appropriately set swim lanes, sales territories, and set internal benchmarks.
NRR potential (customer value headroom): Utilize past sales data, client firmographics, product usage, and post-sales CRM signals to identify the features that best predict NRR potential. This allows for refining segmentation, resource deployment, and target setting.
Profitability: The effectiveness of your 3 examples vary depending on whether margin is measured by function or by segment x product line. Work closely with your finance function to allocate direct and indirect costs, to pin down what really makes you money. Be prepared for surprises here.
Vintages: Evaluate customer NRR (Net Revenue Retention) by vintage to differentiate micro and macro trends and create ROI conviction (sales and CS resourcing, marketing budget) for new & old logos alike.
A final thought on metrics: one key aspect is to drive clarity in the roles of RevOps vs. Sales in metric selection. While only a subset of sales leaders find value in digging deeply into metrics, all of them drive better outcomes when equipped with a crystal-clear narrative to drive their teams. Ruthlessly prioritize your external-facing KPIs and desired outcomes, even if in the background you are working hard to correlate short-term and long-term metrics. In summary, don’t shy away from strategy discovery but simplify execution by reducing the number of dimensions articulated to and by Sales.
New logo lands and partner activity are great measures of long term success. I would also but renewal rates, average deal size, and length of contract terms (e.g. 1 vs 2 vs 5 year deals) as very strong indicators of the long term health of an organization that can easily be measured in the short term.