Magic Number

A SaaS efficiency metric that measures how much new recurring revenue you generate for each £1 spent on sales and marketing. A result above 1 generally signals efficient growth.

It tells you whether spending more on growth is paying off. A low magic number warns you to fix your funnel before pouring in more budget.

A founder spends £10,000 on marketing in a quarter and gains £8,000 in new annual recurring revenue from that spend, giving a magic number of 0.8, a sign she should improve efficiency before scaling.