New CAC Ratio

Total fully-loaded S&M spend in the period divided by the dollars of new CARR generated in the period (new-customer + expansion CARR combined). Per the SMSB standard, the headline efficiency ratio for the full sales-and-marketing motion — answers "how many cents do we spend on S&M to add one dollar of contracted ARR." Common pitfall: blending without separately reporting New CAC Ratio and Expansion CAC Ratio hides which side of the motion is driving efficiency — for a healthy SaaS company expansion CAC is usually 3–5× cheaper per dollar than new-logo CAC.

Fully-loaded S&M plus Customer Success expense attributable to expansion divided by expansion CARR generated in the period. Per SMSB, the efficiency read on the upsell / cross-sell / land-and-expand motion. Distinct from the new-logo CAC ratio because the cost base often includes CSMs whose primary metric is retention but whose secondary metric is expansion — boards expect to see that allocation called out. Common pitfall: excluding CS comp entirely understates the true cost of expansion; including all of CS overstates it. The SMSB standard prescribes a documented allocation rule (typically tied to expansion-quota OTE share).

Fully-loaded sales-and-marketing (S&M) expense incurred to acquire one new customer during the period. Per the SMSB standard, the CAC numerator includes salaries + commissions + benefits + travel + marketing programs + tooling — i.e. all S&M costs, not just direct-attribution paid acquisition. The denominator is new logos, not deals. Common pitfall: omitting fully-loaded comp (especially BDR/SDR base salary and CS-team cost-of-sale where they participate in expansion) understates CAC and inflates every downstream efficiency metric. The board cares about CAC alongside CAC Payback and the CAC Ratio family — single-number CAC is a building block, not a verdict.

Number of months required for the gross profit generated from a new customer's ARR to recover the fully-loaded S&M spend used to acquire them. The single most decision-useful efficiency metric at the board level — it directly connects acquisition cost, ACV, and gross margin into one "how long until we break even on this customer" answer. Per the SMSB standard, the calculation must use gross-margin-adjusted ARR in the denominator (not raw ARR) to be cross-company comparable. Common pitfall: using raw ARR understates payback by ~25–30 percentage points and breaks comparability with peer benchmarks.

Annualized recurring revenue booked from net-new logos (first-time customers) during the period. This is the "hunt" line of the ARR waterfall — the output of the new-customer acquisition motion, distinct from expansion (existing-customer upsell) and from churn / downgrades. Common pitfall: counting renewals or expansion deals as new business inflates the new-logo conversion engine and hides a stalled acquisition motion. The KpiVarianceTable widget shows period forecast vs actual; downstream views compare it to S&M spend to derive new-business CAC and CAC payback.

Contracted Annual Recurring Revenue — recognized MRR × 12 plus the annualized value of contracts that are signed but not yet live (i.e. implementation, ramp, deferred-start). Per the SMSB standard, CARR sits between ARR (live only) and pipeline (unsigned) on the revenue-certainty spectrum: contractually committed but not yet delivered. Boards reading CARR > ARR gap can quantify the in-flight implementation backlog and the leading indicator of next-period ARR. Common pitfall: counting verbal commitments or LOIs as CARR — only signed contracts qualify under the SMSB definition.