In my previous article, I talked about how product teams are no longer primarily measured by shipping.
Revenue is increasingly becoming the dominant success metric for product organizations. The latest State of Product Teams 2025 report from Pragmatic Institute reflects this shift very clearly.
Source: Pragmatic Institute State of Product Teams 2025
At a high level, this makes sense.
Product should absolutely care about business impact.
But many organizations are now creating a new type of friction:
both Product and Sales are being held accountable for revenue without clearly defining which part of revenue each team actually influences.
And not all revenue is the same.
Product And Sales Influence Different Revenue Motions
Sales teams are typically optimized around:
- net new acquisition,
- pipeline generation,
- closed won deals,
- quota attainment,
- and new logo growth.
Product teams influence:
- retention,
- adoption,
- feature engagement,
- customer expansion,
- churn reduction,
- and long term product stickiness.
Those are very different revenue mechanisms.
Yet many organizations still evaluate both teams against broad top line revenue growth as though they fully control the same outcomes.
That creates predictable tension.
Sales says:
"We cannot close what the product does not support."
Product says:
"We cannot drive retention if the wrong customers are being sold."
Often, both are partially right.
Recurring Revenue Is Usually A Better Product Metric
I increasingly believe product organizations should be evaluated more heavily on recurring revenue quality rather than pure net new revenue generation.
Especially in SaaS and subscription businesses.
Why?
Because recurring revenue reflects:
- sustained customer value,
- retention,
- adoption depth,
- expansion behavior,
- and long term usability.
Those are areas product teams directly influence over time.
Examples of product aligned metrics:
- Net Revenue Retention
- Gross Revenue Retention
- Churn Rate
- Expansion ARR
- Product Adoption
- Feature Utilization
- Customer Lifetime Value
External source: Benchmarkit 2024 SaaS Benchmarks
The Benchmarkit report highlights Net Revenue Retention and expansion metrics as core indicators of long term SaaS health and product value realization.
Net New Revenue Mostly Belongs To Sales
On the other side, metrics like:
- Net New ARR,
- Pipeline Coverage,
- Win Rate,
- Average Deal Size,
- and Quota Attainment
are heavily influenced by:
- outbound execution,
- prospecting,
- pricing negotiation,
- relationship management,
- and sales process quality.
External source: Streak CRM 2024 Sales Metrics Guide
That distinction matters because otherwise organizations accidentally create overlapping accountability systems.
And overlapping accountability often becomes organizational conflict.
A Simple Exercise To Try
Take every revenue metric in your organization and classify it into:
- Primarily Product influenced
- Primarily Sales influenced
- Shared accountability
For example:
Product aligned:
- churn,
- adoption,
- retention,
- expansion usage.
Sales aligned:
- new logos,
- pipeline,
- win rate,
- quota attainment.
Shared:
- expansion ARR,
- customer lifetime value,
- renewal revenue.
This sounds simple.
In reality, most organizations quickly discover:
- duplicated incentives,
- conflicting ownership,
- inconsistent definitions,
- and unclear accountability boundaries.
That realization is usually extremely valuable.
Because the goal is not separating Product and Sales.
It is clarifying how each team contributes to revenue so collaboration becomes easier instead of political.
As product organizations become more commercially accountable, companies will need much cleaner definitions between:
- acquisition revenue,
- retention revenue,
- expansion revenue,
- and product health.
Because in the AI era, when everyone can ship faster, durable recurring revenue becomes one of the clearest signals that the product is actually delivering long term value.
