Marketing Spend Benchmarks for SaaS Growth

Marketing is a key driver of growth for SaaS companies, but how much should you spend? Benchmarking marketing budgets as a percentage of annual recurring revenue (ARR) can help SaaS leaders allocate resources effectively.

How Much Should You Spend on Marketing?

Marketing spend varies based on company size, sales strategy, and sector. Here’s what industry benchmarks suggest:

• $10M-$25M ARR: 26% of ARR

• $25M-$100M ARR: 18% of ARR

• $100M-$250M ARR: 17% of ARR

• $250M+ ARR: 15% of ARR

Factors That Influence Marketing Budgets

1. Sales Motion: Companies with a field sales strategy spend more on marketing than those with an inside sales model.

2. Sector: Vertical SaaS companies (healthcare, legal tech) spend around 20% of ARR, while horizontal SaaS (collaboration tools) spend around 16%.

3. Product Complexity: Companies with multiple standalone products often spend more on marketing than those with a single core product.

   
   

The Takeaway

For SaaS leaders, marketing spend isn’t just an expense—it’s an investment in pipeline growth. Optimizing spend based on ARR stage and business model ensures sustainable scaling.