SaaS Magic Number Benchmark
Measure sales & marketing efficiency (net new ARR ÷ prior S&M spend) against bands.
Disclaimer: This tool is for general informational and estimation purposes only and is not professional financial, tax, accounting or legal advice. All figures are estimates — verify with a qualified professional before making decisions. Read the full disclaimer.
Deciding whether to step on the gas? Calculate your SaaS Magic Number to see how efficiently sales and marketing spend turns into recurring revenue.
About SaaS Magic Number Benchmark
The SaaS Magic Number measures how efficiently sales and marketing spend converts into recurring revenue: net new ARR in a quarter divided by the prior quarter's S&M spend. This tool computes it and places it against the bands VCs use.
How to use SaaS Magic Number Benchmark
- 1Enter current-quarter ARR, prior-quarter ARR and prior-quarter S&M spend.
- 2Read your Magic Number and the efficiency band it falls in.
- 3Use the bands to decide whether to invest more or improve conversion.
Why use SaaS Magic Number Benchmark?
- ✓Quantify your sales & marketing efficiency in one number.
- ✓Know whether to spend more on growth or fix the funnel first.
- ✓Clear bands translate the score into an action.
- ✓Free, private and runs entirely in your browser.
Frequently asked questions
What is the SaaS Magic Number?+
It's net new ARR added in a quarter divided by the previous quarter's sales & marketing spend. Above ~0.75 generally means you can safely invest more.
What's a good Magic Number?+
Below 0.5 is inefficient, 0.75–1.0 is good, and above 1.0 suggests you're under-investing. Enter your figures to see your band.
Is the SaaS Magic Number benchmark free to use?+
Yes. It is completely free, runs in your browser and needs no sign-up. Any data point you add stays on your device — nothing is uploaded.
Embed SaaS Magic Number Benchmark on your website
Want SaaS Magic Number Benchmarkon your own site? Paste this snippet into any HTML page — it's free, with no API key or sign-up. The tool loads in an iframe and keeps working exactly as it does here.
<iframe src="https://tooljolt.com/tools/saas-magic-number-benchmark" width="100%" height="640" style="border:1px solid #e5e7eb;border-radius:12px;max-width:680px" title="SaaS Magic Number Benchmark — ToolJolt" loading="lazy"></iframe>Related Community tools
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