Metrics · Finance · Ops · Quarterly · ratio

Sales & Marketing Efficiency (CAC Ratio)

A ratio comparing new revenue generated to the total sales and marketing spend required to generate it, similar to the magic number but often computed over a trailing year.

Formula

Net new revenue / Trailing sales & marketing spend

How to measure

Divide net new revenue generated over a trailing period by the total sales and marketing spend across that same trailing period.

Why track it

This ratio gives a smoothed, longer-window view of go-to-market efficiency, useful for spotting structural trends beneath quarter-to-quarter noise.

Example

A company generating $2 million in net new revenue against $2.5 million in trailing 12-month sales and marketing spend reports a 0.8 efficiency ratio.