Sales efficiency (magic number) calculator

What you get

• A quarterly calculator for three magic number variants and bookings per S&M dollar
• Every formula in plain arithmetic with a worked quarter
• An explanation of when each variant is the right one to use
• An inputs checklist so spend and revenue are measured consistently
• A labeled rule of thumb for reading the result, with a prompt to use your own history

Who it's for

• •RevOps and finance teams reporting go-to-market efficiency
• •CROs and CFOs deciding whether to add sales capacity
• •Founders preparing efficiency metrics for investors

What's inside

1. 1

   Quarterly calculator

   9 columns, 4 worked example rows

2. 2

   Formulas

   3 columns, 5 worked example rows

3. 3

   Which variant to use

   Guidance notes

4. 4

   Inputs and definitions

   6 fields to complete

5. 5

   Consistency checks

   7-point checklist

The preview shows part of section 1. The full template has all 5 sections (4 not previewed here), with blank rows ready to fill in. Download the full template

How to use it

1. 1

   Pick one variant and label it

   Choose the variant that matches your reporting (revenue-based if you report GAAP revenue to investors, ARR-based if ARR is your primary metric) and always label it in reports. Switching variants between quarters makes the trend meaningless.

2. 2

   Lag the spend one quarter

   The magic number divides this quarter's growth by last quarter's sales and marketing spend, because spend takes time to produce revenue. Use same-quarter spend only for the bookings-per-dollar check.

3. 3

   Use total S&M expense from finance

   Take sales and marketing expense from the income statement, including salaries, commissions, programs, and tools. Hand-built spend numbers tend to leave costs out.

4. 4

   Look at four quarters, not one

   A single quarter swings with deal timing. Read the trend over four quarters, or compute a trailing four-quarter version, before changing hiring plans.

Frequently asked questions