GTM Metrics Calculation Guide
The formulas behind healthy growth are usually straightforward.
The harder work is deciding what should be measured, how each metric is defined, who owns the data, and how the executive team will use it to make decisions.
This guide provides a practical reference for calculating the core metrics used to evaluate GTM health across recurring-revenue and non-SaaS B2B businesses. Use these formulas as a starting point, then align your definitions to your business model, stage, revenue structure, and operating reality.
Recurring-Revenue / SaaS Metrics
Burn Multiple
What it measures: How much cash the company is burning to generate each net-new dollar of ARR.
Net New ARR Calculation
Burn Multiple is useful because topline ARR growth can look strong while the company becomes increasingly expensive to scale. The lower the amount of cash required to create incremental ARR, the more efficiently the company is converting investment into growth.
Customer Acquisition Cost (CAC)
What it measures: The average cost required to acquire a new customer.
The most important implementation decision is determining which costs belong in the numerator. Depending on the company, CAC may include:
The exact definition matters less than choosing a defensible definition and applying it consistently.
CAC Payback
What it measures: How long it takes the company to recover the cost of acquiring a new customer.
CAC Payback should generally be measured using profit contribution rather than revenue alone. The key question is whether the company recovers its acquisition investment before the customer relationship ends or materially degrades.
Gross Revenue Retention (GRR)
What it measures: How much recurring revenue from the existing customer base remains after churn and contraction, before expansion.
GRR isolates the durability of the installed base. Expansion revenue is excluded because the goal is to understand how much of the starting revenue survives on its own.
Net Revenue Retention (NRR)
What it measures: Whether the existing customer base shrinks or compounds over time.
NRR adds expansion back into the equation. It shows whether growth from existing customers is strong enough to offset churn and contraction.
Revenue per Employee
What it measures: How effectively the company converts organizational capacity into revenue.
Revenue per Employee is most useful as a trend metric. It can help leadership see whether increased headcount is creating leverage—or whether organizational complexity is growing faster than productive revenue.
Revenue Quality by Motion, Segment & Geography
Revenue Quality is not one calculated metric. It is a way of cutting the company’s core metrics across the GTM dimensions that matter most.
By GTM Motion
- Inbound-Led
- Outbound-Led
- Product-Led
- Partner-Led
- Event-Led
- Community-Led
By Segment / ICP
- Customer segments
- ICP groups
- Company size tier
- Industry vertical
- Primary use case
- Buyer persona
By Geography
- Countries
- Regions (EMEA, APAC, NA)
- Territories
- Mature vs. expansion markets
By Product / Offering
- Products & SKU tiers
- Service lines
- Packaging bundles
- Solutions & business units
“The purpose is not simply to know where revenue came from. It is to identify where the most efficient, durable, and scalable revenue originates—and where additional investment is least justified.”
Non-SaaS B2B Metrics
For services businesses, project-based companies, manufacturers, distributors, hybrid businesses, and other non-subscription models, ARR-based metrics may not apply directly. These metrics answer the same executive questions about profitability, retention, and risk.
Revenue Growth Rate
What it measures: The percentage change in revenue between two comparable periods.
Revenue growth should never be evaluated alone. Leadership should consider whether that growth came from higher prices, greater volume, new customers, returning customers, new offerings, one-time projects, acquisitions, or geographic expansion. The source of growth matters as much as the growth rate itself.
Gross Margin by Offering
What it measures: The profitability of an individual product, service line, or offering after direct delivery costs.
Blended company margin can hide meaningful differences between offerings. Gross Margin by Offering helps leaders see which areas of the business create economic value—and which consume resources without sufficient return.
Contribution Margin
What it measures: The amount remaining after direct variable costs required to generate and deliver revenue.
Contribution margin is especially useful when gross margin does not fully reflect the costs that change as revenue grows. The company must explicitly define which costs are treated as variable.
ECRR — Existing Customer Revenue Retention
What it measures: Whether revenue from an existing customer cohort holds, shrinks, or expands over time.
Cohort Version
Component Version
ECRR is a useful non-SaaS analogue to NRR. Instead of measuring subscription contracts, it measures whether starting customer accounts continue to generate enough revenue to offset customer losses and contraction. ECRR can exceed 100% when expansion within existing accounts exceeds lost and contracted revenue.
Repeat Revenue Rate
What it measures: How much total revenue comes from existing or returning customers.
Repeat Revenue Rate is different from ECRR. ECRR tracks whether a specific starting cohort expanded. Repeat Revenue Rate asks what percentage of the company’s total current revenue comes from past customers. A higher rate indicates greater predictability and reduced dependence on constant new-logo acquisition.
Customer Lifetime Value (LTV) & LTV/CAC
What it measures: The expected gross profit generated across a customer relationship compared to acquisition cost.
For non-SaaS businesses, project-based revenue, uneven purchase frequency, and varying lifespans make LTV less precise. The goal is not false precision—it is to determine whether customer economics justify continued acquisition investment.
Customer Concentration
What it measures: How vulnerable the business is to the loss, reduction, or delayed renewal of major accounts.
A concentrated business is not automatically unhealthy, but leadership must understand the exact financial impact if a major customer leaves or delays.
Required Definition Decisions Before Implementation
For a GTM Executive Scorecard to be trusted, the executive team needs to agree on the definitions behind the numbers. At minimum, resolve these three areas:
1. What Counts as Direct Delivery Cost?
For gross margin and contribution margin, determine whether direct cost includes employee labor, contractors, materials, implementation costs, travel, customer support, hosting/infrastructure, fulfillment, or third-party tools. Without agreement, teams calculate differently while believing they are correct.
2. What Does CAC Include?
Determine which sales and marketing costs belong in the acquisition calculation: sales compensation, marketing compensation, commissions, agency costs, paid media, SDR/AE loaded costs, events, software, and founder selling time.
3. What Qualifies as an Existing or Returning Customer?
Especially important for professional services, project-based companies, and seasonal models. Agree on how long an account can go without buying before being considered new, how separate business units are counted, how acquired accounts are treated, and how multi-year projects are classified.
Consistency Matters More Than Complexity
The executive team should be able to answer four questions for every metric on the GTM Executive Scorecard:
Need Help Building Your GTM Executive Scorecard?
A Certified GTM OS Partner can help your executive team select the metrics that best represent GTM health, establish shared definitions, and build the operating rhythm for using those metrics consistently.