What to budget for digital marketing as a SaaS company

Fibvo editorial · 5 November 2023 · 4 min read

A SaaS marketing budget is best sized against CAC payback period — how many months of revenue it takes to recover the cost of acquiring a customer — rather than a fixed percentage of revenue, since payback period accounts for both the spend and the pricing model together.

What the spend typically covers

• Paid acquisition (search, social), sized against a target payback period.
• Content and SEO for problem-stage and comparison searches, an ongoing cost.
• Onboarding and retention email tooling — often underfunded relative to its impact on churn.

The acquisition-versus-retention balance

A SaaS company spending heavily on acquisition while under-investing in onboarding and retention marketing is filling a leaky bucket. If churn is high, redirecting some acquisition budget toward retention often produces a better return than adding more top-of-funnel spend.

Acquiring more customers into a product with high early churn just increases the number of people who leave.

Adjusting by stage

Early-stage SaaS companies often need to spend more on content and product-led growth mechanics relative to paid acquisition, since paid channels are expensive without an established brand or proof points to support conversion.

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Written by Fibvo — Bengaluru and Erode, India — working with clients in other time zones. Questions, or think we have it wrong? Tell us.