How Much Should a SaaS Startup Spend on Marketing?
SaaS startups operate with a tight budget, and any mismanaged finances could have devastating consequences. Although it might be tempting to allocate most of your budget to other areas of your business, don’t forget about marketing! Without a proper SaaS marketing strategy, acquiring new users is going to be an uphill battle and no startup has time for that! Although the percentage of revenue invested in marketing varies from business to business, there are right ways and wrong ways to approach B2B SaaS startup marketing budgets. Read on to learn all about the basics of SaaS company marketing spend for startups and discover how much to allocate for a marketing budget.
What Is a Reasonable Marketing Budget For B2B SaaS Startups?
Before you lock down a concrete budget, you’re going to need to do some research. It’s no fun, we know. But you know what’s less fun? Losing money, and lots of it. For now, just sit back, relax and let Statwax tell you a tale of how to develop a reasonable marketing budget that will lead your startup to success!
Step 1: Find out how much you’re making.
First things first, you have to figure out your gross revenue and decide how much of that revenue is going towards your marketing budget. Not quite sure where your gross revenue stands? The US Small Business Association (SBA) has a ton of resources to help you get started with this process. For example, the SBA created an online revenue calculator to help you lock down your exact numbers. It’s vital for your startup to base it’s marketing budget on gross revenue because it provides a holistic view of how much you’re making, and determines what you’re willing to spend. So, how much of your gross revenue will you need to spend on marketing? That depends on your specific needs, but, the 2021 Gartner CMO spend survey reported that the average marketing budget for startups is 11.2% of overall revenue.
Step 2: Decide what’s included in your marketing budget.
After you gather the full picture of your revenue, it’s time to identify your marketing expenses. When going through this process, it helps to think through what resources you will need to keep all components of your marketing strategy running smoothly. This can include factors like:
- Marketing tech like CRMs and social media marketing tools.
- Paid advertising like PPC ads or social media ads.
- Content marketing like your blog or other content creation.
- Branding like company swag, your logo, or your branded collateral.
These are all expenses you will need to account for while you are creating your new B2B SaaS marketing budget. An easy way to get all of this organized is by creating a spreadsheet or using a SaaS marketing budget template. Here are some resources for both of these options below:
- Video Resource: Creating a startup marketing budget template in Google sheets.
- Video Resource: Creating a general budget template in Excel.
- Template Resource: Downloadable SaaS marketing budget templates.
Step 3: Make sure you’re not wasting money.
What happens if you allocate too much of your budget towards the wrong marketing efforts or attract low quality leads? It’s simple – you lose money. That’s why it’s critical for SaaS startups to choose their expenses wisely. One way to avoid losing money in your marketing budget is by analyzing your customer acquisition costs (CAC) and looking at your data to determine which expenses are warranted and which are not. Sound too complicated? Not to worry, Statwax can help you with this process by building feedback loops to figure out which marketing expenses are worth it, and which ones you can ditch.
Another way to save your budget is to make sure your marketing strategy delivers the right leads. Wasting your budget on strategies and campaigns that don’t yield high quality leads can severely damage your startup’s growth potential. But how do you attract the right leads through your marketing strategy? Statwax can come to your rescue again! Our predictive modeling and customer data integration shows where and how to get more of the right leads so you can get more out of your marketing investment.
Don’t believe us? Check this out: By turning internal customer journey insights into actionable digital ad insights we provided one of our SaaS clients with a 14.75% increase in qualified leads YoY coming directly from digital ad efforts. Get the full story here.
Make the Most Out of Your Budget With Statwax
When you’re evaluating your startup’s marketing budget, consider how much money you’re making, where your money is going, and whether that money is being used efficiently. At Statwax, we can help you transform how your marketing spend performs. Our ABM-style digital approach, data models, and lead scoring, all work together to keep your marketing strategy efficient and eliminate any opportunities for waste. Connect with us today to get started.
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