To spend, or not to spend – or more important, how much and where.
One of our favorite sayings here in the Marketing COE is that you don’t become a billion-dollar company without marketing. Investing in marketing is clearly a requirement and having enough budget, and allocating it to the right areas, is a key driver of marketing success.
But how much is enough?
We often hear a generic marketing spend vs. total revenue benchmark of ~10%. However, from our experience working high growth B2B SaaS companies, we’ve learned two key things:
- Marketing spend will vary greatly depending on key company attributes like average deal size and company size. Generic benchmarks are not enough.
- Marketing teams at high growth companies are focused on driving new logo business. Thus, spend should be compared to new business bookings, not revenue.
While there’s no shortage of surveys and datasets out there, we couldn’t find one that we were satisfied with given the above. Additionally, once you figure out how much to spend, there’s the question of where to allocate it. How much should go to people vs. program? How much to digital vs. tradeshows? How much to driving new business vs. brand? All considered, we decided that it was time for us to create our own dataset. And once we did, we figured we’d share our findings.
Although the below doesn’t showcase the full richness of our data set, it’s a great place to start (notably, after you fill out the form and get the benchmarks by average deal size – I promise it’s worth it). Using these key benchmarks, you can get a sense of how marketing should be resourced to hit new logo booking targets, from how much to spend, to how many people should be on your team.
Though tempting to just take these numbers and run with them, it’s important to remember that benchmarks are just a data point. Every company is a bit different and how you allocate spend will vary depending on your specific company attributes and situation. Additionally, when budgeting, it’s important to take a top-down and bottom-up approach. In short, use these benchmarks as a starting point for discussions – not a target.
It's important to benchmark against companies like yours, with new logo deal size being an important dimension. Fill out our form below the infographic to access these benchmarks by new logo deal size.