👋 Hi, it’s CJ Gustafson and welcome to Mostly Metrics, my weekly newsletter where I unpack how the world’s best CFOs and business experts use metrics to make better decisions.
Part II: The Metrics that MATTER
Every piece of data you present should support one of these three pillars:
Revenue: Are we growing?
Efficiency: Are we growing sustainably?
Runway: Can we afford to keep growing?
Think of these as the “big three” every board member and executive team is looking for clarity on during your presentation (whether they are vocal about it or not). If your metrics don’t answer these questions, they don’t belong in your report.
Let’s dig into tactics to elevate your reporting across each of these pillars below.
(With LOTS of BOARD templates…)
Pillar 1: Revenue
Revenue is the ultimate measure of success. No matter how many fancy dashboards you include, the board will always come back to this: Are we driving top-line growth?
Key Metrics to Track:
ARR Additions: Break this down into new logos and expansions to highlight the engines of growth, and show how successive periods are building on one another.
Net Revenue Retention (NRR): Dissect this metric into expansion, upsell, down sell, and churn. A bridge is the most helpful way to illustrate the changes (more below).
Pipeline Conversion Rate: What percentage of qualified opportunities are turning into revenue? It’s critical to segment this by your sales teams and the customer types they are serving.
Tactics to Elevate Your Revenue Reporting:
Source: Chart Mogul
Show Progress with an ARR Waterfall.
This visualization helps your board see where growth is coming from—and where it’s slipping.
Example: “Last quarter, ARR grew by $1.5M. Expansions contributed $1.2M, while churn reduced ARR by $300K. Our churn mitigation program in mid-market accounts is already showing early results.”
(TEMPLATE BELOW)
Remember: ARR from new customers cannot be included in NDR. It’s a measure of existing customer activity during a period. Don’t let any new customers slip in there.
Dissect NRR into Components.
Don’t just stop at the headline number—break it down to uncover actionable insights.
Example: “NRR dropped to 115% last quarter, driven by mid-market churn. This segment represents 30% of our ARR, and we’re piloting proactive onboarding initiatives to reduce churn.”
Tie Pipeline Metrics to Sales Strategy.
Show conversion rates across different sales channels to identify opportunities for improvement. You will need more pipeline for certain segments, and grouping it into one number may gloss over critical gaps.
Example: “Our Enterprise pipeline is 2.2x next quarter, while our SMB pipeline coverage is 3.2x. Both of these are about 0.5x higher than the previous quarter, showing we are creating room for new deals at a faster pace. Most of this increase is driven by inbound from sponsoring the Run the Numbers podcast.”
Pillar 2: Efficiency
Revenue is the scoreboard, but efficiency shows how well you’re playing the game. Also, I have no idea if that analogy made sense. To use some silly buzz words, growth at all costs is a thing of the past. Today’s CFOs need to show that their company is scaling smartly.
But seriously…
Key Metrics to Track:
CAC Payback Period: How long does it take to recover customer acquisition costs? This will impact how you think about cash flows returning to your model from sales and marketing efforts.
LTV to CAC Ratio: Are customers worth the cost to acquire them? A ratio of 3x or higher is ideal. You should investigate and benchmark this by segment.
Gross Margin: What’s the true cost of delivering your product? Does your business indicate future operational leverage at scale?
Revenue per Head: The gold standard for SaaS efficiency. And in my opinion, the GOAT of SaaS metrics.
Tactics to Elevate Your Efficiency Reporting:
Visualize CAC Trends by Channel.
Compare payback periods for sales-led vs. marketing-driven acquisitions. Use color coding to highlight efficient and inefficient channels.
Example: “Marketing-driven acquisitions achieve a CAC payback of 9 months, while sales-led channels average 15 months. A reallocation of 10% of budget to marketing could reduce overall payback by 2 months.”
Show Efficiency Gains Over Time.
Don’t just present a snapshot—show how metrics like gross margin or revenue per head have evolved and what levers were pulled to change them. Saying gross margin changed is not enough. Why?
Example: “Gross margin improved from 72% to 76% QoQ, driven by reduced infrastructure costs and renegotiated vendor contracts.”
Focus on Sustainability.
Highlight how your efficiency metrics ensure long-term scalability.
Example: “Our LTV to CAC ratio has stabilized at 3.5x, indicating we’re maintaining healthy unit economics as we scale and not spending over our skiis to fill the top of our funnel with new customers.”
Pillar 3: Runway
Revenue and efficiency metrics answer the “how are we doing today?” question. Runway metrics answer the “can we keep doing this tomorrow?” question.
Key Metrics to Track:
Cash Burn Rate: How much cash are you burning monthly and quarterly?
Burn Multiple: Cash burned relative to net new ARR (≤ 2x is a healthy benchmark).
Cash Runway: How many months of operating capital remain?
Tactics to Elevate Your Runway Reporting:
Connect Runway to Strategic Decisions.
Don’t just present numbers—explain what they mean for your business.
Example: “With 18 months of runway, we have the flexibility to double our Customer Success team from 2 to 4 people to address mid-market churn. This move is expected to increase NRR by at least 10%.”
Show QoQ Improvements in Burn Multiple.
Use a simple grid to visualize how your burn multiple is improving over time.
Example: “Our burn multiple improved from 2.5x to 2.0x this quarter due to stronger-than-expected ARR growth and tighter cost controls.”
Plan for Scenarios.
Use runway metrics to frame discussions around contingency planning.
Example: “If we maintain our current burn rate, we’ll need to secure additional funding within the next 12 months. However, a $500K reduction in monthly burn could extend our runway by 6 months.”
Wrapping It Up
Great executive reporting isn’t about how much data you can pack into a slide deck. It’s about delivering clarity, focus, and actionable insights. Remember:
Every metric should align with Revenue, Efficiency, or Runway.
Simple charts win. This is not the time to try out a new work of art.
Your report should answer: “What’s the story? What should we do about it?”
In Part II of this series, we’ll dive into how to structure your executive reporting for maximum impact. Until then, remember: Less noise, more signal.
