🔆 Pay attention to ARR per Employee.

ARR per Employee – I talked about this metric in the past because I am a big fan of its honesty. It proves you’re doing things right at the foundational level:

But in a conversation with one of my customers last week, I realized it’s easily misunderstood.

 

When I talk about ARR per Employee, I don’t mean Salespeople.

I mean ALL employees.

 

Let me explain why: 

 

Even though your ARR per sales grows fast, 

Your ARR per employee can decline even faster. 

 

Here’s the thing:

Just because your Sales team brings in a lot of new customers doesn’t mean you’re growing efficiently.

A new customer that’s not in your sweetspot

  • takes more effort to get live
  • takes more effort to get to experience value
  • takes more effort at the R&D level
  • takes more effort to support.

It requires adding more people, meaning the ARR per employee will decrease.

 

So, pay attention to that metric.

Every day your ARR per Employee suffers you’re losing.

Even if ARR per Sales grows.

 


Question for you to reflect upon

Over the last 12 months, how has ARR per Employee evolved in your SaaS organization? What does that tell you?


 

Be Remarkable

 

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About the author

Sales Pitch

Ton Dobbe is a former B2B software product marketer who's on a mission to save mission-driven SaaS CEOs from the stress of 'not enough' traction. He's the author of The Remarkable Effect, the host of the Tech-Entrepreneur on a Mission podcast, and writes a daily newsletter on the secrets to mastering predictable traction.