# Ratios *Every ratio has an opinion.* --- You've been summoned to the next board meeting. Two ratios in the pack are going the wrong way. Gross margin has dropped from 82% to 74%. Revenue per head has fallen from £200k to £170k. How are you going to explain yourself? --- Start with margin. Last year you exclusively sold your own software. This year you started reselling third-party integrations alongside it. The margin on resold products is 30-40%, which drags the blended number down. But those products didn't need building. No development cost, no engineering time, no roadmap. You're generating an extra £15k per customer per year from products that cost you nothing to create. Total gross profit per customer is up, even though gross margin is down. And the customers buying the bundle are stickier. They're embedding your platform as the hub for three or four tools instead of one, making it more painful for them to leave you. The blended gross margin has declined, but you have higher profit per customer and ultimately better retention per cohort. --- Now revenue per head. Your top salesperson left. £100k salary, bringing in £200k of ARR per year. You replaced them with two junior reps at £40k each. Between them they're generating £180. You're spending 80% of the cost for 90% of the output - £ efficiency has improved. You've removed a single point of failure, and you've got two people learning the product, building relationships, growing into roles that will produce more as they mature. Revenue per head has dropped, but the sales function got more resilient - and more cost-effective. --- The board is not wrong to call you in - they're doing their job to call out these numbers. It's your responsibility to prove the plan is working. Gross margin on its own told a story about erosion. Paired with profit per customer and cohort retention, it tells a story about a smarter product strategy. Revenue per head on its own told a story about declining productivity. Paired with cost per rep and ramp timeline, it tells a story about building a sales team that scales. Ratios work better in groups. The story is yours to assemble.