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:

• Pipeline generation

• Forecasting Accuracy

• Win Rates

• YoY Growth

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.

Like most RevOps teams, we look at a wide array of metrics that help us understand performance in various parts of the business. It's crucial to look at both short term and long term metrics, so I don't think it's bad to be concerned about the short-term, especially in a highly dynamic environment like we have been in for the past few years of Covid, ZIRP, and inflation.

I like the book Cracking the Sales Management Code: The Secrets to Measuring and Managing Sales Performance by Jason Jordan that talks extensively about how to think about different levels of metrics in the sales organization. It's 12+ years old at this point but still spot on.

A few longer-term metrics you may want to consider:

• Top of funnel metrics - web visits, leads by source, MQL/SAL/various pipeline stages; trends here can also help identify the causes of improvement or decline in the business so should be readily available; these all may vary wildly day-to-day or week-to-week but looking longer term gives great perspective

• Sales channel share - percentages of the business coming from marketing/inbound, outbound, partners, referrals, etc.; likewise a useful view over longer periods of time to understand where your new logos/new revenue is coming from

• Churn & contraction and existing business expansion/x-sell - important both in the short and long run; you need to know how this is doing in quarter but also over time, and what are the underlying reasons and characteristics of companies that contract/churn/grow

• Rep productivity - trends over time (by quarter) are very valuable to see how your team is doing, if they are getting better over time, etc. This is typically going to be bookings/billings but you can also look at activities, pipeline generation, win/loss rates, and so on.

• Magic Number (for the SaaS people out there), CAC:LTV, and related metrics that take revenue and cost into account - this gives you a sense of the economics of your business. You might have lots of activity, pipeline, or even revenue but if that is done too inefficiently you need to change your business model.

• Tenure/retention - gives you a sense of how long people stick around, and from there you can dig into correlation to productivity

• Ramp times - how good is your enablement team at getting new hires or promoted reps up to full productivity; especially if you have higher turnover being able to do this well is important to having an efficient sales team

• Marketing probably looks at others over time such as awareness

• Customer support will look at CSAT, response times, volumes of contact/tickets, resolution rates, and so on that all will have useful long-term trends

Nearly everything can be measured at a point in time but it's giving them context of the long-term that is helpful. If you find your sales partners just asking for the metric in quarter, you can proactively bring them some context by providing the quarter-over-quarter or year-over-year view and some hypothesis as to what has changed. Taking that action yourself is probably the best way to get them to engage with the longer-term because you'll have some insight along with the metric vs. just reporting what is happening now.

To analyze the long-term health of a concern, it is important to measure immediately testable performance criteria together with indicators that shed light on future sustainability and growth.

In focus of long-term metrics, here are the key that I attach greatest import to:

• Customer Lifetime Value (CLV): This measures the total revenue anticipated from an individual customer account. It helps to give us a perspective on whether those relationships you are building will continue yielding returns in the long run or not just initial sales profits.

• Customer Retention Rates: A high retention rate often indicates customer satisfaction. On the other hand, failure to retain customers over time generates attrition: losses. That is why it is important to provide feedback on our customer service and support initiatives.

Also important for judging whether our efforts have been successful are the four key Long-Term Indicators below.

• Market Growth Rates and Share Capture: Measures how well the Company is making inroads into its existing markets, or else opening up new ones. This second metric is essential to long-range planning and strategic development of the day-to-day business cycle. Conventional wisdom says if you have more market share (provided the market is growing) your business will do better.

• New Logo Wins: track the number of new customer accounts. It is essential for understanding just how strong territory is getting extended and our growing presence on the market.

• Partner Wins and Contribution: Assess the extent to which partners and collaboration have been successful. This includes evaluating revenues from partners, as well as the effectiveness of joint go-to-market strategies.

• Growth in Pull-Through Services: This metric evaluates the success of taking existing customers an additional service above or complementary service to what they are already doing.

When it comes to assessing the health of an organization, there is a mix of short-term and long-term metrics that paint a comprehensive picture. At the heart of every organization's effort lies the goal of driving pipeline, converting prospects into customers, and nurturing those customer relationships for long-term growth. These core metrics serve as guiding lights, shaping decisions not just for the current quarter, but for the trajectory of the entire fiscal year. While metrics like pipeline, CQ and FY forecasts, YoY growth, gross retention, and net retention are vital and often take center stage in leadership discussions, they are not the only ones deserving attention.

It is equally important to complement these key metrics with a range of financial indicators that offer deeper insights into the business's sustainability and effectiveness. Metrics such as the Customer Acquisition Cost (CAC) Ratio, CAC Payback, and the Lifetime Value (LTV) to CAC ratio provide valuable insights into how efficiently we are acquiring and retaining customers and whether our strategies are delivering the desired results over the long term. If your organization is not currently tracking CAC Payback, it is absolutely worth investing in the time to start tracking that now.

• CAC Payback is like a financial compass guiding us through the wilderness of customer acquisition. Imagine it as a map showing how long it takes for the revenue generated from a customer to cover the cost of acquiring that customer. It is not just about how much it costs to reel in a new client; it is about how quickly we can recoup that investment.

• Think of it this way: if we spend $1000 to acquire a customer and they generate $100 in monthly revenue, it will take 10 months to break even (1000 / 100 = 10). Once we hit that 10-month mark, every dollar generated from that customer is pure profit.

• Now, why is this important? Well, just like a savvy investor wants quick returns on their investments, we want to ensure that our customer acquisition efforts are paying off promptly. A shorter CAC Payback period means we can reinvest those profits into acquiring even more customers, fueling our growth engine.

• But, if our CAC Payback period is too long, it is like trudging through mud; progress is slow, and it's harder to sustain momentum. That is why keeping an eye on CAC Payback helps us fine-tune our strategies, optimize our resources, and stay on course towards sustainable growth.