Sales Efficiency
Sales efficiency measures how much new recurring revenue each unit of sales and marketing spend produces. The family includes the magic number, CAC ratio and payback period — all asking: what does a dollar of go-to-market buy?
Formula
Worked example
Spending $1M on S&M in a year that produces $1.4M of new ARR is a sales efficiency of 1.4 — each go-to-market dollar bought $1.40 of annual recurring revenue.
Readings around 1.0 are solid for B2B SaaS at scale; well below 0.5 says the motion loses money even before churn; above 1.5 usually marks strong product-market fit or an under-exploited channel worth funding harder.
Gross variants (new ARR only) measure the acquisition engine; net variants (net new ARR, after churn) measure the whole system. Quote which one you are using — the difference is precisely your revenue churn.
Compute it: CAC calculator