Sales Efficiency Ratio

New revenue produced per unit of sales and marketing spend, in one of several closely related formulations.

Formulation matters

Gross or net of churn, revenue or ARR, lagged or contemporaneous spend — each choice materially changes the number. Comparing your ratio to a published figure without matching definitions compares nothing.

Consistency beats correctness

Pick one formulation, document it, and hold it. A ratio whose definition moves cannot show a trend, and the trend is the entire value.

RELATED TERMS

CAC Payback Period

How long it takes for a customer's gross profit to repay the cost of acquiring them. The bridge between sales efficiency and cash flow.

Magic Number

A sales efficiency measure comparing new recurring revenue produced to the sales and marketing spend that produced it.

Customer Acquisition Cost (CAC)

The fully loaded cost of acquiring one new customer: sales and marketing spend for a period divided by new customers acquired from it.

Learn how to apply this: RevOps 101: Revenue Operations Foundations

Definitions are the vocabulary. The courses are where you learn to operate it, with the interactive audit tools.

See the course