The five main go-to-market metrics businesses need to track are:
- Annual Recurring Revenue (ARR): Annual Recurring Revenue refers to the predictable and recurring revenue generated from subscription-based products or services over a year. It represents the total value of subscriptions that a company expects to receive annually from its customers.
- Annual Contract Value (ACV): Annual Contract Value is the total value of a contract or subscription that a customer commits to paying annually. It is calculated by multiplying the average monthly payment by the number of months in the contract term.
- Gross Retention Rate: Gross Retention Rate measures the percentage of existing customers that a company retains over a specific period, without accounting for any additional revenue generated from upsells, cross-sells, or expansion revenue. It reflects the ability of a company to maintain and satisfy its customer base.
- Net Revenue Retention: Net Revenue Retention measures the revenue growth generated from existing customers over a specific period, taking into account not only customer retention but also additional revenue from expansions, upsells, and cross-sells. It reflects the company’s ability to retain and grow its existing customer relationships.
- Category Growth: Category Growth refers to the rate at which a specific market or industry is expanding over a given period. It measures the overall growth and demand for products or services within a particular category, indicating the potential for new market opportunities and increased revenue.
