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Know Your Metrics: Magic Number - Definition & Calculation

Magic Number is comparing sales and marketing expenses versus how many new customers were signed up, and then tells you how efficiently you are getting back New Logo ARR.

Join Jeff as he further defines and calculates Magic Number for us (lag and no lag examples included).

Let’s unlock the magic behind this efficiency metric!

Calculation slides from video above:

Showing calculation of Magic Number with no lag for Q1 2023

Showing the calculation of Magic Number with 2 Quarter Lag for Q1 2023

If you are interested in learning how we got the two datasets that were used for these calculations you can reference:


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