How efficient is your sales spend?
Enter this and last quarter's recurring revenue and last quarter's sales and marketing spend. See the SaaS magic number.
Your numbers
Example numbers are filled in. Replace them with yours.
Quarterly recurring revenue.
SaaS magic number
2
(This quarter's revenue − last quarter's) × 4 ÷ last quarter's sales and marketing spend
Above about 0.75 is often read as efficient. This is a common rule of thumb, not a standard.
- New annualised revenue addedQuarterly increase × 4.
- ₹20,00,000
Open gives finance teams live bank data, so spend figures like these come from the source, not a spreadsheet.
A calculation for planning, not accounting, tax or investment advice. It uses only the numbers you enter, and everything is calculated in your browser: nothing you type leaves it.
Questions about this tool
How is the magic number calculated?
Magic number = (this quarter's recurring revenue − last quarter's) × 4 ÷ last quarter's sales and marketing spend. The increase is multiplied by four to annualise it.
Why last quarter's spend?
Sales and marketing spend usually takes time to turn into revenue, so this quarter's revenue growth is matched with the spend from the quarter before.
What is a good number?
Below about 0.5 is often read as inefficient, between 0.5 and 0.75 as acceptable and above 0.75 as efficient. These are common rules of thumb, not standards, and they vary by company stage.
What should I include in spend?
All sales and marketing costs for the quarter: salaries, commissions, advertising, tools and events. Use the same definition each time.
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