If you are running a SaaS company and trying to figure out how much to spend on marketing, you are not alone. It is one of the most common questions I hear from founders and VPs of Marketing, and the honest answer is that most of them are either spending too much in the wrong places or not enough in the right ones.
Your SaaS marketing budget is not just a line item. It is the engine that determines how fast you grow, how efficiently you acquire customers, and whether your unit economics actually work. Get it wrong, and you are burning cash with nothing to show for it. Get it right, and you build a machine that compounds over time.
Here is what the data actually says, and more importantly, what to do with it.
What Are the Current SaaS Marketing Budget Benchmarks?
The median marketing spend for private B2B SaaS companies sits at around 8% of annual recurring revenue, according to SaaS Capital’s 2025 survey of over 1,000 companies. That is down slightly from 10% in previous years, which tells you that companies are getting more disciplined about where their dollars go.
But that 8% median hides a lot of variation. Here is where it gets interesting.
Venture backed SaaS companies spend roughly double what bootstrapped companies spend on marketing. Higher growth companies, both bootstrapped and venture backed, spend approximately 40% more on marketing than their slower growing peers. And when you combine sales and marketing together, the typical range is 30% to 50% of total revenue.
The takeaway is not that you should copy someone else’s number. It is that your SaaS marketing budget should be driven by your growth goals, your stage, and your unit economics, not by what some other company is doing.
How Does Marketing Spend Change by Growth Stage?
This is where most SaaS companies get it wrong. They apply the same budget framework at every stage, which is like wearing the same shoes whether you are running a sprint or hiking a mountain. Different stages demand different investment levels.
Early stage (pre revenue to $3 million ARR): At this point, you are figuring out product market fit and getting your first customers. Marketing budgets here tend to be high as a percentage of revenue because revenue is small. Many early stage SaaS companies invest 15% to 20% or more of revenue into marketing, focused heavily on web site design that converts, content, SEO, and building an initial audience. The goal is awareness and activation, not efficiency.
Growth stage ($3 million to $20 million ARR): This is the scale up phase. You know who your customer is, and now you need to reach a lot more of them. Combined sales and marketing spend at this stage often runs 40% to 50% of revenue. According to the Benchmarkit 2025 report, the percentage of budget allocated to demand generation increases at each stage up to $100 million ARR. This is where your SaaS marketing budget needs to be aggressive but strategic.
Mature stage ($20 million ARR and beyond): As companies scale past $20 million, marketing spend as a percentage of revenue starts to decrease. Companies at $100 million ARR and above typically spend around 33% of revenue on combined sales and marketing, which is the same percentage as public SaaS companies. The focus shifts from pure acquisition to a balance of acquisition, expansion, and retention.
One pattern that stood out in the 2025 data: companies in the $50 million to $100 million range actually increase their marketing spend. Why? Because this is often the stage where companies are pushing into new markets or new geographies to sustain growth. It is an investment in the next chapter, not a sign of inefficiency.
Where Should You Allocate Your SaaS Marketing Budget?
Knowing how much to spend is only half the question. Where you put it matters just as much. And this is where I see the biggest mistakes.
Content and SEO should be your foundation. About 53% of all SaaS website traffic comes from blogs, according to industry benchmarks. And organic search leads convert to customers at roughly 14.6%, compared to only 1.7% for pure outbound leads. That is not a small difference. That is an entirely different return on investment.
Content marketing generates approximately $3 for every $1 invested, while paid ads return about $1.80. For SaaS companies with long sales cycles and buyers who want to evaluate on their own before talking to sales, content is the channel that builds trust before the sales conversation even starts.
I have seen this play out across every SaaS company I have worked with. The ones that invest in content early build an asset that compounds. The ones that rely only on paid acquisition find themselves in a bidding war that gets more expensive every quarter.
Paid acquisition has its place, but it is not your whole strategy. Google Ads deliver the highest click through rate for SaaS at 4.28%, but the average cost per lead through paid channels is around $310. Compare that to roughly $164 for organic leads. Paid works best when it is layered on top of a strong organic foundation, not as a replacement for one.
Retention marketing is the most overlooked budget line. The most successful SaaS companies in 2026 allocate up to 60% of their marketing budget toward existing customers. That sounds aggressive, but the math supports it. This approach delivers 25% higher net revenue retention, 40% lower churn, and 3x higher ROI compared to purely acquisition focused budgets. Consider carving out at least 10% to 15% of your marketing budget for customer marketing, email marketing sequences that nurture and upsell, and expansion campaigns that grow accounts you already have.
A practical framework that works for most SaaS companies is the 70/20/10 rule: 70% on proven channels that are already delivering results, 20% on emerging strategies that show promise, and 10% on experiments. This keeps you grounded while leaving room to find your next growth lever.
What Does the Relationship Between Spend and CAC Look Like?
Here is the number that should keep every SaaS leader honest about their budget: the median new customer acquisition cost ratio hit $2.00 in 2024. That means the typical SaaS company is spending $2 in sales and marketing to acquire $1 of new annual recurring revenue.
That is not great. And it gets worse. Companies in the bottom quartile are spending $2.82 to acquire that same $1. Meanwhile, the top quartile spends about $1.00.
The difference between those two groups is not just budget size. It is allocation. The top performers are investing in channels that compound, like content and SEO, while the bottom quartile is throwing money at paid channels without the organic foundation to support it.
The average CAC payback period for private SaaS companies is now about 23 months. That means you are operating at a loss on every new customer for nearly two years before you break even. When your payback period is that long, every dollar in your SaaS marketing budget has to work harder. You cannot afford to guess.
This is also why the LTV to CAC ratio matters so much. The benchmark is 3:1, meaning you should be generating $3 in customer lifetime value for every $1 you spend on acquisition. If you are below that, it does not necessarily mean you should cut your budget. It might mean you need to reallocate it toward channels and strategies that deliver higher quality customers who stick around longer.
When Should You Bring in an Agency Instead of Building In House?
This is a question I get asked constantly, and the answer depends on your stage and your team.
If you are an early stage SaaS company with limited marketing headcount, an agency gives you access to specialized skills you cannot afford to hire individually. One experienced SaaS marketer on staff supported by an agency that handles SEO services, content strategy, and paid campaigns is often more effective than trying to hire three or four generalists.
If you are a growth stage company with a marketing team in place, an agency can fill specific gaps. Maybe your team is strong on product marketing but needs help with web site design that actually converts trial signups. Maybe your email marketing sequences are underperforming and you need someone who understands SaaS specific marketing challenges at a level your generalist agency never did.
The key question is not whether to use an agency. It is whether the agency actually understands SaaS. Subscription economics, churn reduction, trial conversion optimization, net revenue retention: these are not things a generalist agency is equipped to handle. And the cost of a wrong fit is not just the monthly retainer. It is 6 to 12 months of lost time and missed growth.
A good SaaS focused agency pays for itself. If the agency costs $5,000 per month but generates 10 customers worth $1,200 each in lifetime value, the ROI is clear. If they cannot show you that kind of math within 6 months, they are the wrong partner.
How Do You Know If Your SaaS Marketing Budget Is Working?
You do not need a dashboard with 50 metrics. You need a handful that actually tell you whether your money is producing results.
Track these five things: customer acquisition cost by channel (so you know where your efficient growth is coming from), LTV to CAC ratio (to make sure your economics work), CAC payback period (to understand your cash flow timeline), net revenue retention (to see if your existing customers are growing or shrinking), and pipeline generated per marketing dollar (to connect spend directly to revenue).
If your CAC is climbing and your payback period is stretching, that is not a signal to cut your budget. It is a signal to reallocate it. Move spend from channels that are getting more expensive toward channels that compound over time. Invest in SEO services that build organic traffic month over month. Double down on content that converts, not just content that gets traffic. And invest in retention marketing that keeps the customers you already paid to acquire.
The companies I have worked with that grow the fastest are not the ones with the biggest budgets. They are the ones that review their numbers every month and adjust. They know exactly what each channel costs them and what it produces. They are not guessing. They are iterating.
What Matters More Than How Much You Spend on Your SaaS Marketing Budget?
The real question is not how much to spend. It is how strategically you allocate what you have. Two SaaS companies can spend exactly the same percentage of revenue on marketing and get wildly different results. The one investing in compounding channels like content and SEO while keeping a disciplined eye on unit economics will outgrow the one pouring money into paid acquisition without a retention strategy.
Start with your numbers. Know your CAC, your LTV, your payback period, and your churn rate. Then build a SaaS marketing budget that addresses your biggest bottleneck, whether that is awareness, conversion, or retention. Revisit it every quarter. Cut what is not working. Double down on what is.
The companies that allocate strategically outgrow the ones that just spend more. That is not theory. That is what the data shows, and it is what I have seen play out across 13 years of working with businesses at every stage.
If you want to know where your current budget is leaving revenue on the table, start with a free marketing audit. We will benchmark your spend against the latest industry data and show you exactly where to invest for the highest return.
