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A Summary of

PADRE: New Operating Metrics for the New Subscription Business Model

by
Ben Kwon, Iain Hassall
Zuora
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In a subscription business model, relationship with your customer – not the product – is key to success.

Customer Health

  • Customer health is captured through your Annual Recurring Revenue (ARR).
  • PADRE (Pipeline, Acquire, Deploy, Run and Expand) is an internal reporting framework which serves as a lens into the customer’s subscription journey.

Pipeline Generation and Development

  • Two high level components of pipeline health measured to determine whether they will support the revenue targets
    • Pipeline creation multiple
    • Pipeline coverage ratio

Acquire

  • Customer acquisition is an indicator of the effectiveness of your sales organization
  • Internal tools and data management will be heavily influenced by the organizational structure
  • Key leading indicators that are relevant across the board
    • Sales cycle velocity
    • Sales ramp time
    • Predictive forecast
    • Incentivizing metrics

Deploy

  • Deployment can be a critical function of your subscription business model
  • Deployment targets:
    • Rapid fulfillment
    • Cash preservation

Run and Expand

  • Think about how you retain and grow your existing customer base
  • Churn - you might spend a significant amount of money to acquire your customers
  • How to measure churn
    • Net retention
    • Renewals
    • Upsells

Feeding into ARR Growth

  • You should maintain focus on the customer relationship and focus your operating metrics around growth and preservation of ARR
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