What is the Cost of ARR
Jul 15, 2023•2 min
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Episode description
In the first episode, I talk about my favorite SaaS metric, the Cost of ARR (aka SaaS CAC Ratio).
Highlights:
- You can calculate blended, new, and expansion
- Requires new and expansion bookings data
- Need total sales and marketing expense
- You must allocate S&M for the Cost of ARR New and the Cost of ARR Expansion
- Sales cycle length is important
- Easy way to call BS on a bookings forecast with this metric
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