GTM Efficiency Score Calculator

What is GTM Efficiency?

GTM efficiency combines net new ARR per sales and marketing dollar with NRR and gross margin into one composite score. It is a summary indicator, not a replacement for inspecting CAC, retention, and pipeline quality separately.

Formula

Version v1. See methodology and the public formula repo for sources and change history.

Worked example

Using the default example inputs (Net new ARR: $1,200,000; Sales and marketing spend: $600,000; Net revenue retention: 110%; Gross margin: 80%), GTM Efficiency equals 176 (GTM efficiency score). This score combines ARR creation, retention quality, and margin into one GTM health indicator.

What good looks like

Use as a directional composite for executive reviews. Investigate components when the score moves; a single blended number can hide weak retention or thin margin.

Directional guidance only, not a cohort benchmark claim. Premium cohort bands appear when sample thresholds are met for your profile.

FAQ

What is GTM Efficiency?

GTM efficiency combines net new ARR per sales and marketing dollar with NRR and gross margin into one composite score. It is a summary indicator, not a replacement for inspecting CAC, retention, and pipeline quality separately.

What is the GTM Efficiency formula?

GTM efficiency = (Net new ARR / Sales and marketing spend) × NRR × Gross margin

Why multiply by NRR and margin?

Efficient ARR creation matters more when retention and margin are strong. The formula rewards durable unit economics, not spend alone.

GTM efficiency vs magic number?

Magic number is ARR over S&M only; this score also folds retention and margin for a broader operating read.

Is there one industry standard score?

No. Treat output as internal trending. Compare components and related calculators rather than a universal threshold.