B2B SaaS companies don't have many opportunities to win new customers. Unlike B2C businesses that rely on a high volume of transactions, SaaS providers often depend on a smaller number of high-value deals to drive growth.
Those customers also tend to stay with the same platform for years. Adopting new software takes time, training, and a significant financial investment, making switching providers a decision few companies take lightly.
That's why every marketing dollar matters. A B2B SaaS marketing budget plays a direct role in helping prospects find your company, evaluate your solution, and build confidence before making a purchase.
Allocating that budget effectively can be difficult, especially when customer acquisition demands so much attention from growing SaaS companies.
B2B SaaS Marketing Consumes Company Budgets: A Common Misconception
Is your SaaS marketing strategy and budget not doing what you’d hoped it would? Don’t be discouraged -- it’s fixable.
Because of the nature of the SaaS industry, SaaS companies are under constant pressure to acquire recurring revenue. With customer acquisition comes a cost. SaaS companies seek to make back the money they spent on acquiring these customers before they find themselves in a deficit. As a result, their main concern is growing at a quick speed, while paying off the money they’ve spent.
To pay off the money spent on customer acquisition, the company must have a strong SaaS product marketing strategy.
According to SaaS Capital's 2026 benchmark survey of more than 1,000 B2B SaaS companies:
- Sales account for 15% of ARR (annual recurring revenue) at the median company.
- Marketing represents 8% of ARR.
- Companies backed by outside investors spend 2x more on marketing as self-funded companies.
As depicted by these statistics, marketing budgets vary wildly by company. Your company’s annual spend on sales and marketing will depend on your products, services, and talents of your team. Marketing budgets will vary, but a safe estimate of marketing and sales spend should be anywhere from 10-40% of your annual recurring revenue (ARR).
When adjusting your SaaS marketing strategy and budget, start off slow and see what works for you. Moving full steam ahead on a drastic budget change can be harmful to your company’s revenue stream. Trial and error will help you learn best and make adjustments where necessary.
Where to Start With a SaaS Marketing Budget
If you're looking for a one-size-fits-all formula, you're probably going to be disappointed. Every SaaS marketing budget is different because every company has different goals, revenue targets, and growth plans. The good news is that building a budget doesn't have to be complicated.
1. Start With Your Goal
Before deciding how much to spend, decide what you want your marketing to accomplish. All stakeholders should be aligned on this before you move forward. A clear goal gives your budget direction and makes it easier to measure whether your investment is paying off.
2. Understand What You Can Afford
Take a look at your annual recurring revenue, customer acquisition cost (CAC), and current marketing spend. Those numbers provide a realistic starting point and can help you build a budget your business can support. They also give you a better understanding of how much you can invest in acquiring new customers.
3. Invest Where It Makes Sense
Every dollar in your SaaS marketing budget should have a purpose. Think about the marketing activities that have produced results for your business and the opportunities that will have the greatest impact moving forward.
At the same time, you should avoid putting your entire budget into a single marketing strategy. A balanced approach gives your business more opportunities to grow over time.
4. Review and Adjust
No budget stays perfect forever. Track your results, make adjustments when needed, and continue investing in the marketing efforts that help your business grow. A little trial and error can go a long way toward helping you build a stronger marketing strategy.
Inbound Marketing Saves Money
Did you know that inbound marketing can save your SaaS company money?
SaaS companies must generate enough revenue, as quickly as possible, to offset the cost of customer acquisition. While inbound marketing takes 12 months or so to gain momentum, its comparatively low cost can consolidate your budget until the magic starts to happen.
Inbound marketing costs approximately 61% less per lead than outbound marketing. Leads can be generated via organic, non-paid channels such as:
Incorporating inbound marketing into your SaaS marketing budget may just be the best thing your company ever does to increase revenue. For example, by establishing a blog and posting regularly, you can identify yourself as an industry expert and thought leader. HubSpot found that businesses with a blog experience 126% higher lead growth than businesses without one.
Most of the best SaaS companies have blogs. Customers are more likely to trust your company and product/service when they see proof of your knowledge level.
Inbound marketing compounds itself over time. As you start putting more effort into SEO and blogging, your business will start ranking higher in Google search results. Over time, your company will begin ranking more frequently and in a higher position without having to do much at all. Inbound marketing is a great equalizer for small-to-mid sized budgets because it doesn’t cost an arm and a leg to make great content!
A B2B SaaS Marketing Budget Is Never Set in Stone
Creating a B2B SaaS marketing budget that allows for steady content creation will help your company succeed in the long run. Although inbound marketing efforts don't produce immediate results, your company will hit its stride in years 2-5 and be able to compete with the big players in your industry.
Keep in mind: Inbound marketing is just one piece of the puzzle. Lower customer acquisition costs don't mean you can slash your marketing budget. The combination of inbound marketing and traditional marketing strategies can help your company reach the next stage of growth – and sustain it.
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This article was originally published in December 2020 and was recently updated to reflect current marketing trends.
How to Audit your Online Marketing
If you are executing digital marketing, congratulations! You are most likely already one step ahead of your competition, and making strides to meaningfully connect with prospects online. But, how do you know if you’re seeing continual success year over year, and improving your metrics?
Without the tools in place to analyze and benchmark your efforts, it is impossible to scale your online marketing and ensure continuous success.
