If you think ARR really only matters to the board or C-suite, think again!
ARR – and related/derived metrics like Net Retention Rate – can unlock some key insights.
Call me biased but I believe the whole organization should be regularly using their recurring revenue metrics to make strategic decisions on a regular basis.
Here’s a very typical trend I see in organizations that are just starting to build out their metrics:
🌥 We know we need to calculate ARR but not sure the best way yet or how to get it right.
🌤 OK, company-wide ARR done, now we need to break this down by Group of Accounts (think market segment, or other cohort types)
☀ Awesome, we trust these numbers. But can we now focus on ARR by product?
And once you can understand product trends through ARR (which you can with ARRow by the way 😎), you then have a critical data point that can be used by everyone:
✅ Customer Success can see the trend of when products are adopted and abandoned, and better approach renewal conversations. It can also highlight which products might need some additional TLC to boost user adoption.
✅ Marketing will have access to clear (and reliable, up-to-date…) lists of who owns what, know which products to create resources around and be able to focus on specific messages around cross-selling between products.
✅ Product will have feedback data on which products are generating the most revenue, and be able to understand their average life cycle (looking at cohort churn analysis) so that they can identify patterns and build roadmaps on the stickiest products.
✅ Sales will know what products to focus on as an entry point for a specific market, geo or industry, and which can be later introduced.
ARR is more than a number on a slide.
ARR is for evARRyone (sorry… had to 🤦♂️).
Use it or lose it.