Revenue Executive Officer flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Rule of 40

A SaaS health heuristic where revenue growth rate plus profit margin should equal or exceed 40 percent. It frames the trade-off between growth investment and profitability.

LTV to CAC ratio

Customer lifetime value divided by customer acquisition cost. A ratio of at least 3:1 is a common target; below 1:1 each acquired customer destroys value.

CAC payback period

Customer acquisition cost divided by monthly recurring revenue per account times gross margin percentage. It measures months to recover acquisition spend and signals capital efficiency.

Bottom-up TAM sizing

Estimating total addressable market by multiplying the number of qualified accounts by expected annual contract value, rather than applying a top-down percentage to an analyst figure.

Land and expand model

A strategy of winning a small initial deployment and growing revenue through seats, usage, or modules. It requires a defined expansion lever and measurable attach rate.

Lead-to-cash handoff map

A documented sequence of stages from marketing qualified lead through renewal, with a named owner and service-level agreement at each transition to prevent revenue leakage.

Pipeline coverage ratio

Qualified pipeline divided by quota for the period. Three to four times coverage is typical; lower coverage predicts a miss unless win rate or deal size improves.

Territory balance rule

Territory design should distribute addressable opportunity within roughly ten to fifteen percent across reps and avoid splitting named accounts among multiple owners.

Value-based pricing

Setting price from the quantified economic value a customer receives, such as cost saved or revenue gained, rather than from internal cost plus a markup.

Value metric selection

Choosing the unit that price scales with, such as seats or usage. It must track customer value, be easy to understand and forecast, and resist gaming.

Good-better-best packaging

A three-tier structure with a clear value metric and upgrade path. The middle tier is usually the designed target and should carry the strongest margin.

Net price realization

List price minus discounts, rebates, and concessions. Tracking it by segment exposes deep discount outliers that an average discount figure conceals.

Usage-based bill shock

Customer distress from unexpectedly high consumption invoices. Spend caps, alerts, and predictability features are standard mitigations because bill shock drives churn.

Weighted pipeline forecast

Summing deal value multiplied by stage probability. Probabilities should be calibrated from historical stage conversion rates rather than assigned by intuition.

Net revenue retention

Starting ARR plus expansion minus contraction and churn, divided by starting ARR. It captures expansion and is reported separately from gross retention.

SaaS magic number

Net new annual recurring revenue in a quarter divided by prior-quarter sales and marketing spend. Values above roughly 0.75 to 1.0 indicate efficient go-to-market spend.

Forecast commit category

Deals a rep will personally vouch for closing in the period. Accuracy is judged against actual results within a tolerance band, commonly five to ten percent.

Cohort retention analysis

Grouping customers by acquisition period and tracking behavior over time. It separates acquisition quality from later behavior that blended averages hide.

On-target earnings

Base salary plus target variable compensation at one hundred percent quota attainment. Common splits are 50/50 or 60/40 for account executives.

Quota overassignment

Setting the sum of rep quotas ten to twenty percent above the company target to absorb ramp, attrition, and underperformance. Attainment should cluster near sixty to seventy percent.

Ramped quota

A reduced quota for new hires during a defined onboarding period, often paired with a guaranteed minimum. Unramped quotas predict early failure and attrition.

Commission accelerator

An increased commission rate applied to sales above a quota threshold. Decelerators apply below threshold; retroactive caps damage motivation and trust.

SPIFF

A short-term sales incentive for a specific behavior such as selling a new product. It must expire and be measured against incremental behavior, not existing pipeline.

Clawback provision

A plan term allowing recovery of commission on deals that churn or go unpaid. It needs a defined lookback window and clear legal language.

Gross versus net churn

Gross revenue churn measures lost recurring revenue; net revenue churn subtracts expansion. Logo churn counts customers. Each answers a different retention question.

Customer health score

A composite of usage depth, support sentiment, executive engagement, payment behavior, and renewal proximity. Weights should be validated against actual churn outcomes.

Time to first value

Days from contract signature to the customer achieving a defined first outcome. It is among the strongest early predictors of renewal and expansion.

Renewal playbook timeline

A sequence starting ninety to one hundred twenty days before expiry for enterprise accounts: confirm value, map stakeholders, then negotiate. Late starts reduce leverage.

Expansion revenue levers

Seat growth, usage growth, cross-sell, tier upsell, and renewal price uplift. Each lever needs an owner, a trigger, and a measured attach rate.

CRM system of record

The authoritative database for accounts, contacts, opportunities, and activities. Any connected tool writing revenue data must conform to its object and field standards.

Data stewardship roles

Data owners hold business accountability, stewards operate quality processes, and system owners administer tools. Unnamed ownership causes gradual quality decay.

CPQ to billing lineage

End-to-end traceability from configured quote through booked contract to invoiced amount. A mismatch between booked and billed recurring revenue is a governance failure.