Go-to-market (GTM) teams are drowning in dashboards. Sales, marketing, product and customer success teams all have metrics they swear by, but too often those metrics do not add up to sustainable revenue. Research and practitioner reports over the last few years show a clear pattern: Teams are working toward different goals, speaking different measurement languages, and as a result leaving revenue on the table.
At Mereo we believe fewer, clearer and shared KPIs beat dozens of siloed partial measures. Alignment on the right outcomes matters. Below we summarize the research that shows where GTM organizations miss the mark, then argue for four core KPIs every revenue-focused GTM organization should align on and track together:
- Customer acquisition (and CAC)
- Customer lifetime value (LTV/CLV)
- Deal velocity and conversion rates (stage conversion + win rate)
- Customer churn and retention (gross & net)
These four capture both the inflow and outflow of revenue, the efficiency of your buying journey and whether your business actually sustains value once buyers sign deals.
WHY KPI MISALIGNMENT IS A REVENUE PROBLEM
Misalignment is not theoretical. Organizations that align go-to-market teams around common goals grow faster and more profitably.
Weaknesses often show up in three ways:
- Marketing measures activity (impressions, MQLs) while sales measures outcomes (opportunities closed), and neither translates cleanly into revenue impact.
- Dashboards report correlation, not cause — so leaders chase vanity improvements that do not move revenue.
- Different teams use different definitions for the “same” metric (what counts as an MQL, how to compute churn), so one team thinks performance is healthy while another is alarmed.
If your organization struggles to predict revenue, investigate whether the problem starts with shared KPIs and consistent definitions — that is the highest-leverage fix.
4 KPIS TO ALIGN ON (AND HOW TO MAKE THEM ACTIONABLE)
1) Customer Acquisition Cost (CAC)
What it tracks: The number (and cost) of new buyers acquired in a period. CAC = (sales + marketing spend to acquire customers) ÷ (number of new buyers acquired). You can also measure new ARR or new revenue per period as a complementary volume metric.
Why it matters: Acquisition feeds the top of your revenue funnel, but acquisition without efficiency kills margin. Tracking both volume and CAC tells you whether growth is sustainable and whether your investment in demand is delivering profitable buyers.
How to track:
- Define “new customer” consistently (e.g., first paid invoice or signed contract).
- Use integrated data: CRM for deals closed, billing for revenue recognition and your finance ledger for marketing + sales spend.
- Calculate CAC by cohort and channel (e.g., CAC by campaign, partner, or vertical). Cohort CAC lets you see which channels deliver profitable customers over time.
- Monitor CAC payback period (months to recover CAC from gross margin) as an operational threshold for investment decisions.
2) Customer Lifetime Value (LTV or CLV)
What it tracks: The expected gross margin-contribution from a buyer over their entire relationship. A simple formula: LTV ≈ (average revenue per account per period × gross margin %) × average customer lifetime (in periods). Advanced models use cohort retention curves and discounting.
Why it matters: LTV tells you the long-term value of the buyers you are winning. Comparing LTV to CAC (LTV:CAC) is the single clearest test of whether your growth investments pay off. If LTV is low relative to CAC, scale will destroy value.
How to track:
- Use billing/subscription data to compute average revenue per account (ARPA) and realized gross margin.
- Derive average customer lifetime from historical retention cohorts rather than a single-period snapshot. Cohort analysis reduces noise from seasonality or one-off churn events.
- Report LTV and LTV:CAC by segment (e.g., SMB vs. mid-market vs. enterprise, or by product line or by geography). That tells you where to allocate GTM effort and pricing.
- Update LTV quarterly; re-run cohort lifetimes annually or when you change pricing or packaging.
- Consider emphasizing customer expansion by selling more services or solutions within existing accounts. This contributes meaningfully to gross dollar retention and should be captured in your LTV calculations.
3) Deal velocity and Conversion Rates (stage conversion + win rate)
What it tracks: The time it takes to move an opportunity from first qualified contact to closed-won (sales cycle length), and the conversion rates between funnel stages (lead → MQL → SQL → opportunity → discovery → proposal → negotiation → closed-won). Win rate (closed-won ÷ total opportunities) is a summary conversion metric.
Why it matters: Deal velocity affects the speed of revenue realization and cash flow; conversion rates determine how many leads you need to hit targets. Improvements in sales cycle length or stage conversions reduce required lead volume and improve forecast accuracy.
How to track:
- Standardize your sales stages and definitions across reps and channels so conversion percentages are comparable.
- Capture stage entry and exit timestamps in CRM to compute median and mean cycle lengths; watch distributions (high variance is as telling as the mean).
- Monitor stage-by-stage conversion rates and identify major drop-off points (e.g., marketing-to-sales handoff or proposal-to-negotiation).
- Pair conversion metrics with win-rate by persona/industry to prioritize deals and refine ICP (ideal customer profile).
- Run rolling 90-day and 12-month analyses so you are not chasing short-term noise.
4) Buyer Churn and Retention Rates (gross and net)
What it tracks: The percentage of buyers (or ARR) lost in a period (gross churn), plus net churn which considers expansion (up-sell/cross-sell) and contraction. Retention rate is the inverse view. Cohort retention curves show how different vintages behave over time.
Why it matters: If you are losing buyers faster than you acquire new ones to replace them, no amount of acquisition will produce sustainable revenue. Net retention >100% signals healthy expansion-led growth; high gross churn indicates product-market or onboarding problems that will throttle growth. For SaaS, retention is critical for growth and valuation. High churn rates for software firms can usually reveal other problems within the company: product quality, service, value recognition, competitive and contract terms.
How to track:
- Compute gross churn (lost ARR / starting ARR for the period) and net retention ((starting ARR + expansion – churn) ÷ starting ARR). Report both.
- Use buyer cohorts (by signup month, industry, segment) to spot structural retention differences.
- Develop a health score that includes a strategic action plan for “yellow” and “red” lit buyers.
- Instrument product usage, onboarding milestones, and NPS/CSAT as leading indicators for churn risk. Connect those signals into renewal playbooks.
- Make renewal and expansion a cross-functional KPI — success requires product, customer success, sales and marketing coordination.
- For SaaS, look both to customer number and dollar value retention and break down by solution, geography, industry and company size to directly influence contracting, product roadmap, account management structure / coverage and compensation plan direction.
HOW TO MAKE THESE KPIS OPERATIONAL (SO THEY ACTUALLY CHANGE OUTCOMES)
Tracking these four KPIs is only useful if your organization uses them in alignment. Use this short operational checklist that separates teams that talk about metrics from teams that move them:
- Agree on definitions — and document them. One canonical definitions document (MQL, SQL, new buyer, churn event). Store it in your revenue playbook.
- Single source of truth. Integrate CRM, billing, product-usage, and finance data and publish a single dashboard for executives and a light-weight tactical view for GTM teams. Reports that pull from different systems and are left unreconciled are the root cause of disagreement.
- Segment everything. CAC, LTV, win rate, and churn look very different by segment. Treat KPIs as dimensional and you will know where to invest and where to tighten.
- Set cadence + SLAs. Weekly or bi-weekly pipeline reviews, monthly KPI reviews and quarterly strategic resets. Tie team-level OKRs to the four KPIs (not vanity metrics). Studies show alignment (shared goals + SLAs) materially improves growth and profitability.
- Use cohorts and causal thinking. Do not just report “conversion up 4%.” Ask why. Use cohort analysis to infer causality from experiments (pricing changes, playbooks, onboarding flows) rather than assuming correlation equals cause.
FEWER, SHARED AND CONNECTED METRICS WIN
GTM teams are happiest when every function can point to a number that ties to revenue. The path forward is simple, if not always easy: Agree on a small set of shared KPIs that capture acquisition, value, efficiency and retention — and then operationalize them with rigorous definitions, integrated data and cross-functional accountability.
We can help.
- Map your current KPI landscape and find gaps.
- Build a single “revenue truth” dashboard integrating CRM + billing + product.
- Run a 30-day KPI alignment sprint with definitions, SLAs and a pilot dashboard.
Which of those would you like to tackle first? Reach out here and let me know.