To have a brand that makes a difference, you need to have really good budget management and be able to make market analyses. This whole process is a very long and troublesome process. SaaS firms need to be much more conscious about investing in the right channels. Since these firms are also driving digital marketing, they have to be really good at SaaS marketing budget management.
Of course, there are many different firms that are closely related to the term marketing budget, and these firms can also allocate SaaS marketing budgets in the same way. Although this may not seem like a mandatory expenditure for firms, it is quite beneficial in terms of time-money-returns.
We recommend that you review our blog post with a lot of information and guidance that can help you achieve success as a company or SaaS company owner who will work with SaaS Marketing.
B2B SaaS Marketing Budget Planning
One of the most frequently asked topics in the marketing world is SaaS marketing budget standards. Because companies may not know how much budget they will allocate to SaaS in the name of marketing or SaaS companies may not know which investments to direct their budgets to at the first stage.
When we look at the statistics and recommendations, the budgets that companies spend on marketing are clear. In another article, we mentioned that the digital marketing budget ratio is around 10-15% of total revenue. But this is not always the case for start-ups and SaaS. Companies that initially spent more than 80% achieved success much faster in the following years.
Spending Benchmarks for B2B SaaS Companies
Spend metrics support efficient financial management and expense tracking for B2B SaaS businesses. When SaaS marketing budget examples are examined, it will be seen that it is used to promote the expansion of the business, increase profitability and make strategic choices. Each organization’s priorities and KPIs can be different, so spending SaaS marketing budget benchmarks should be created following these needs.
1. Marketing Spends:
Includes the costs of activities such as digital advertising, content marketing, participation in events, and SEO (search engine optimization). Measuring the return on these expenses involves calculating the Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLTV).
2. Product and Software Development Costs:
For B2B SaaS companies, expenses related to product and software development processes include the costs of activities such as product design, software development, updating, and improvement.
3. Infrastructure and Server Costs:
Infrastructure and servers are needed to provide the service. These costs include elements such as renting servers, data center costs, and security measures.
4. Customer Support Costs:
Customer satisfaction is vital for B2B SaaS companies. The customer support team is tasked with answering customers’ questions, resolving issues, and managing customer relationships.
How is a SaaS Marketing Budget Determined?
It is important for SaaS companies to know specific concepts and criteria. For example, it is necessary to target and optimize by analyzing previous performance data, and marketing channels/strategies are determined accordingly. In line with revenue goals, it will be important to understand the following concepts. Review it and plan your SaaS PPC budget accordingly.
- Revenue Goals: Refers to the intended earnings within any given time frame.
- Marketing-Sales Ratio: It refers to whatever the appropriate ratio is for your company between marketing and sales expenses.
- Customer Acquisition Cost (CAC): This is the average expenditure that companies spend to acquire new customers.
- Churn (Meltdown or Customer Loss): Refers to the customer who is lost.
- Customer Lifetime Value (LTV): An estimate of a single customer’s lifetime earnings.
SaaS Marketing Budget Formula
Now that you are familiar with the above terms, we leave it below so that you can take advantage of the formula necessary for budget planning.
*Marketing Budget = Revenue Goals x Marketing to Sales Ratio – (CAC x Number of Customers) + (LTV x Number of Customers)
SaaS Marketing Budget Template
We leave the template created by SaaS Capital that you can interpret in light of the terms of the SaaS marketing budget that we have mentioned throughout the article and apply it to your company policy by making adjustments. You can adapt this template to your own firm by thinking of it as a sample SaaS marketing budget.
How Much Should Your Business SaaS Marketing Budget Be?
When looking at popular SaaS firms that have exceeded a certain level of revenue, this expenditure can be up to 50%. But to say this ratio with certainty would be illogical without knowing the sector and the market.
What are the SaaS Marketing Channels with a Good ROI?
When managing a SaaS marketing budget, pay attention to the channels that provide the best return on investment. These are digital or online channels, email marketing, SEO, and PPC advertising.
What’s the Difference Between B2B and B2C SaaS Marketing Budget Planning?
B2C sales are to individual consumers, and B2B sales are to other businesses. CRM systems, analytics programs, and platforms for customer assistance are a few instances of SaaS B2B products. SaaS B2C goods include items like social media platforms, photo and video editing tools, and word processing programs.
How Do SaaS Companies Allocate Marketing Budgets?
A strategy should be established considering the targeted growth and revenue. Marketing methods such as SEO, PPC, and content are used in the strategy and the budget is distributed accordingly.
