Hey,

Welcome to ChiefCustomerOfficer.io, the newsletter to help you increase ARR in your businesses.

This week, we cover:

• Metrics that matter
• Pressure-testing your 2025 budget with your AI thought partner
• Building an engagement matrix

Jeff

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ARTICLE

Metrics that Matter

SaaS leaders often navigate growth using intuition or a narrow focus on metrics like ARR. But in a landscape where scaling demands precision, Murray’s playbook from The SaaS CFO offers a structured framework to drive sustainable growth.

“Metrics act like cockpit instruments for your company, helping you navigate growth opportunities, identify what’s working and not working, and stay on course toward your goals.”

Why This Framework Matters

1. Scaling Without Guesswork — Murray’s framework provides structure, ensuring you focus on the right metrics across the business—not just top-line growth.
2. Visibility into the Real Health of the Business — The framework forces leaders to connect the dots between acquisition costs, profitability, and retention.
3. Prioritization of Resources - Scaling isn’t about doing everything at once—it’s about focusing on what moves the needle.
4. Prevents the "Churn and Burn" Mentality - SaaS growth can tempt companies into aggressive customer acquisition without considering whether they’re keeping their existing customers.
5. Empowers Confident Decision-Making - Scaling requires constant decisions on where to invest (and cut back). A framework like this builds confidence when presenting plans to your CFO or CEO, as every decision is tied to a metric that reflects business health.

Metrics are your map to scalable, profitable growth. Understanding the business is becoming a bigger priority when you ascend into leadership. Don’t wait until you get a seat at the table, start to learn now.

IMPLEMENTING AI INTO YOUR BUSINESS

Pressure-Test Your 2025 Budget

Budget planning isn’t just about filling out a spreadsheet — it’s about anticipating challenges and ensuring your plan can be scrutinized. This AI prompt will help you validate your Customer Success budget before it lands on your CFO’s and CEO’s desks.

Prompt:

“Act as a financial analyst specializing in Customer Success. Help me pressure-test my 2025 budget before I submit it to the CFO and CEO.

• Analyze my proposed spending on [team headcount, tools/technology, customer engagement initiatives].
• Evaluate whether my budget aligns with industry benchmarks (e.g., % of revenue allocated to Customer Success).
• Highlight potential risks, like under-investing in key areas or overestimating cost savings.
• Suggest areas for optimization or reallocation to maximize ROI on customer retention and expansion efforts.
• Propose 3-5 tough questions the CFO/CEO might ask about this budget and how to address them effectively.”

Before running the prompt, gather specific details about your budget, such as:

• Team headcount projections and costs.
• Expected revenue growth and retention goals.
• Current Customer Success metrics (e.g., Net Revenue Retention [NRR], Gross Revenue Retention [GRR]).

Example AI Output:

1. Risk Analysis: “Proposed spending on tools is 15% below industry average—this could impact efficiency.”
2. Optimization Suggestions: “Reallocate 10% from the event budget to hire an additional CSM, better managing the mid-market segment.”
3. Tough Questions: “What’s the projected ROI for the new engagement initiative?” and “Why is retention spend increasing if GRR is stable?”

Takeaway:

AI can help you uncover blind spots, validate your assumptions, and prepare for tough questions before they’re even asked. A well-tested budget is a defensible budget.

How did it help you prepare for budget discussions this year?

A FRAMEWORK

Build an engagement matrix that drives action

Do you need help prioritizing your customer accounts or tailoring your engagement strategies?

A simple engagement matrix can transform how your team focuses its efforts and delivers value, especially if you are trying to engage in more digital environments.

It’s a simple 3×3 matrix, but can help your team to action on specific contacts:

• Low in Frequency, Low in Recency - Dormant - why are they not engaging at all?
• High in Frequency, Low in Recency - Needs Attention - what made them drop off recently?
• Higher In Frequency, Higher in Recency - Champion - how can we reward them as advocates?
• Low in Frequency, Higher in Recency - New - how can we encourage them to stay engaged?