C4 · Economics & metrics · 12 metrics
GTM Metrics
Definitions with benchmark data by stage, motion, and regime.
12 GTM metrics with benchmark ranges by stage, motion, and regime. Each includes the formula, the naive version, and the corrected version (where they differ). Best-in-class: NRR > 120%, CAC payback < 12 months, Rule of 40 score > 60 (Bessemer 2024). The MRR walk is the only true identity — everything else is an estimator.
All 12 metrics
| Metric | Formula | Best-in-class | Type |
|---|---|---|---|
| Monthly Recurring Revenue (MRR) | MRR = sum of all monthly subscription values (normalized from any billing cadence to monthly) | $2M+/month | identity |
| Annual Recurring Revenue (ARR) | ARR = MRR × 12 | $100M+ ARR | identity |
| Customer Acquisition Cost (CAC) | CAC = Total Sales & Marketing spend / New customers acquired in the period | LTV:CAC > 3:1 | ratio |
| Customer Lifetime Value (LTV) | LTV = sum over the declared horizon of S(t) × expected contribution at t given active / (1 + period discount rate)^t | Contribution LTV / CAC | model-dependent |
| LTV:CAC Ratio (LTV/CAC) | LTV:CAC = Contribution LTV / CAC | > 5:1 | ratio |
| CAC Payback Period (CAC Payback) | Payback = first P for which cumulative expected contribution through P ≥ CAC; constant monthly c>0 gives CAC/c | > 24 months | ratio |
| Net Revenue Retention (NRR) | NRR = (Beginning ARR + Expansion - Contraction - Churn) / Beginning ARR | < 85% | identity |
| Gross Revenue Retention (GRR) | GRR = (Beginning ARR - Contraction - Churn) / Beginning ARR | < 75% | identity |
| GTM Magic Number (Magic Number) | Magic Number = 4 × (subscription revenue this quarter - last quarter) / S&M spend last quarter | > 1.5 | ratio |
| Burn Multiple (Burn Multiple) | Burn Multiple = Net Burn / Net New ARR | > 4x | ratio |
| Rule of 40 (Rule of 40) | Rule of 40 score = stated annual growth % + stated profitability margin % | > 80 | heuristic |
| Rule of X (Rule of X) | Rule of X score = X × stated annual growth % + FCF margin % | g=30%, FCF=0%, X=3 → 90 | model-dependent |