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← GlossaryCRM 101 · Metrics
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Magic Number

Net new ARR in a quarter divided by S&M spend in the prior quarter. A payback proxy.

In depth

Above 1.0: invest more in S&M. Between 0.5 and 1.0: keep spending. Below 0.5: something is broken, fix efficiency before adding headcount.

Related terms

CAC Payback
Months of gross profit required to recover the CAC of a new customer.
CAC
Customer Acquisition Cost, fully-loaded S&M spend divided by new customers acquired in the period.
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