Discover the essential elements and expenses involved in establishing a marketing function for your SaaS startup. In this blog, we will provide you with a comprehensive guide on the cost of marketing a SaaS business. Whether you are just starting out or looking to scale, we will cover everything from team composition and salaries to software and technology expenses.
We will even show you how to create a realistic marketing budget and measure the success of your marketing efforts. Plus, don't forget to check out our marketing budget template to help kickstart your planning process.
SaaS Marketing Team Structure
Building a successful marketing team is crucial for the growth and success of any SaaS startup. The key roles and job titles in a marketing team vary depending on the size and specific needs of the business, and only you will know what exactly is right for you. That said, these are the essential roles of any new marketing team in any SaaS startup.
- Chief Marketing Officer (CMO) or Head of Marketing (HoM)
The Chief Marketing Officer or Head of Marketing is a crucial hire for any business starting a go-to-market function. They shape the overall marketing strategy, ensuring it aligns with business goals. They oversee demand generation and lead generation efforts, optimising the customer journey and improving conversion rates.
With their industry knowledge, they identify growth opportunities and adapt marketing strategies to changing customer needs. This marketing champion plays a vital role in establishing a strong brand presence and driving revenue growth for your SaaS startup.
Average compensation: £158,104 (CMO) or £77,257 (HoM)
- Product Marketing Manager
Product marketing managers are crucial for successful marketing in SaaS startups. They bridge the gap between product development, marketing, and sales by creating and executing tailored marketing plans. They understand the product's value proposition, conduct market research, and develop effective strategies.
They collaborate with teams to ensure seamless execution and analyse metrics for optimisation. In summary, they promote products through strategic planning, messaging, and collaboration to drive results.
Average compensation: £68,744
- Growth Marketing Manager
Growth marketing managers are experts in lead and demand generation, driving growth in both marketing and sales. They optimise every touchpoint in the customer journey, using data and analytics to identify effective channels and tactics.
They constantly experiment and iterate on marketing strategies, leveraging A/B testing for insights. With a strong understanding of sales funnels, they align marketing efforts with sales goals. Staying up to date with industry trends and technologies, they position your SaaS startup as innovative. Overall, growth marketing managers are essential for sustainable growth and success.
Average compensation: £54,427
- Content Marketing Manager
Content marketing managers are the driving force behind your marketing team, specialising in creating compelling content and engaging copy. They possess a deep understanding of SEO, events, public relations, and social media, allowing them to effectively fuel your marketing efforts.
By delivering inbound leads to support the growth marketing manager and collaborating with the product marketing manager, they also contribute to the creation of impactful product and sales collateral.
Average compensation: £51,252
- Pay-Per-Click (PPC) Specialist
Their strong analytical and communication abilities allow them to collaborate with other team members and ensure a cohesive marketing approach. Overall, PPC specialists help SaaS startups establish a strong online presence and effectively reach their target audience.
Average compensation: £43,649
All in, an effective startup marketing team covering the essential roles will cost you in the region of £350,000 - £400,000 in salaries alone. When you add in employer tax contributions, additional compensation and benefits, recruitment fees and desk costs (a good rule of thumb is to multiply the salary by 1.45 to estimate total employee costs), you can expect a total cost of labour for your marketing team to be in the region of £580,000 per year.
Many startups, especially in the SaaS space, choose to partner with marketing agencies like RevForm to replace some, or even all of these roles. To give you an idea of agency cost, RevForm charges between £2000 and £5000 per month for a service that covers the needs of most businesses, meaning your total agency cost would be around £60,000 a year to replace all or most of the roles listed here.
Software and Technology
Software and technology play a crucial role in streamlining marketing processes and driving results for SaaS startups. By leveraging the right tools and platforms, you can automate tasks, gather valuable data, and optimize your marketing efforts. Here are some key software and technology solutions that can help you achieve these goals:
- Customer Relationship Management (CRM) Software: A CRM system like HubSpot allows you to track and manage customer interactions, leads, and sales. It enables you to streamline your sales and marketing processes, improve customer relationships, and gather insights to enhance your marketing strategies.
An essential for any business is a solution like Sales Hub Professional, which will cost around £5,200 per year.
- Marketing Automation Tools: Marketing automation tools automate repetitive marketing tasks, such as email campaigns, lead nurturing, and social media scheduling. These tools help you save time, improve efficiency, and deliver personalized experiences to your target audience. HubSpot can be your vendor of choice here too, with Marketing Hub Professional costing around £9,360 per year.
- SEO Tools: SEO tools assist you in optimising your website for search engines. They provide insights into keyword rankings, backlinks, and competitor analysis. By optimising your website's SEO, you can improve your organic search visibility and attract more qualified traffic.
Our recommended SEO tool, SEMRush, also doubles as a PPC tool as well and will cost around £1,200 per year.
- Website Hosting and CMS: Website hosting and CMS are essential for SaaS startups' marketing strategies, providing the foundation for building and managing a professional website. Website hosting ensures a secure, reliable, and fast-loading website, while CMS simplifies content creation and organisation. HubSpot CMS offers SEO optimisation, lead capture forms, and analytics, while WordPress offers greater flexibility and customisation. Both platforms scale to accommodate startup growth, creating an engaging online presence and effectively communicating the brand message.
HubSpot CMS will cost around £4,200 per year.
- Partner Relationship Management: PRM platforms streamline processes and maximize reach for businesses in indirect sales and marketing channels. With PartnerStack, businesses easily onboard and incentivize partners, track performance, and collaborate on joint marketing campaigns. By leveraging these platforms, businesses expand their customer base effectively and focus on driving mutual success in their ecosystem.
Our provider of choice, PartnerStack, customises their pricing based on you and your business. Realistically you can expect costs to start from around £10,000 per year, but it really depends on how much you are rewarding your partners.
By incorporating these software and technology solutions into your marketing function, you can streamline your processes, improve efficiency, and drive better results for your SaaS startup. It's essential to research and choose the right tools that align with your specific needs and goals. Remember to regularly evaluate and update your technology stack as your marketing needs evolve and your startup scales. All in, you can expect to be paying around £30,000 a year for your marketing tech stack essentials.
Creating Your Marketing "Showtime" Budget
If you've been working through this blog with the calculator up on your phone, you'll be sat there with a number in the region of £600,000 just to have the lights on in your marketing function. So what is left in your "Showtime" budget, and where should you be allocating it?
The average marketing budget for a startup should be around 11.2% of overall revenue, however, this may need to be higher if you're in a more competitive space, or you want to grow more aggressively. Many SaaS startups allocate 20% of their gross revenue to marketing.
So where should you allocate your marketing budget?
- Market Research (10%): Know Your Battlefield
Allocate about 10% of your budget to market research for valuable insights into your target audience and competition. It helps understand customer needs, preferences, and behaviors, allowing you to create more effective marketing campaigns. Analysing competitors helps identify market gaps and position your startup uniquely. Market research also provides insights into trends and opportunities, enabling you to stay ahead and optimse your marketing efforts. Prioritising market research is crucial for a strong marketing foundation.
- Creative Design (15%): Visuals That Speak Volumes
Allocate approximately 15% of your budget to visually appealing designs that captivate your audience and effectively convey your brand message. Consider elements such as color schemes, typography, and imagery that align with your brand's identity. Investing in professional graphic designers or agencies can help create visually appealing designs strategically designed to evoke emotions and drive action. In today's visually driven digital landscape, investing in design that stands out and leaves a lasting impression is crucial for the success of your marketing efforts.
- Paid Advertising (30%): Amplify Your Reach
Allocate around 30% of your marketing budget for paid advertising across various channels, such as search engine advertising, social media advertising, and display advertising. This allows you to amplify brand awareness, reach a wider audience, and acquire new customers for your SaaS startup. Continuously monitor and optimise your campaigns, analysing metrics to maximise the impact of your advertising budget. Remember, paid advertising is an investment that can effectively increase your reach and brand exposure.
- Events (20%): Networking Goldmines
Events are a powerful strategy for networking, increasing brand exposure, and generating leads for your SaaS startup. Allocate about 20% of your marketing budget to industry conferences, trade shows, and webinars. These platforms allow you to connect with professionals, showcase your brand, and establish valuable relationships. Evaluate the costs and potential ROI for each event, prioritise those that align with your audience and objectives, and track their effectiveness to continuously improve your marketing efforts.
- Content Production (25%): Fueling Engagement
Allocating approximately 25% of your budget to content creation is crucial for your SaaS startup's success. Regularly producing blog posts, videos, and whitepapers helps engage your audience, establish authority, and drive growth. Blog posts provide in-depth information and industry insights, while videos captivate viewers and showcase your solution's value. Whitepapers offer comprehensive analysis and attract potential customers. Tailor your content to meet audience preferences, analyse performance, and prioritise quality over quantity. By consistently delivering valuable content, you can build trust, establish your brand, and drive growth.
- Influencer Marketing, Incentives, and Public Relations: Tailor to Your Needs
When considering your marketing budget, tailor it to your specific goals and target audience. Every SaaS startup is unique, so invest in strategies that align with your business objectives. For example, allocate more budget to social media advertising if your audience is active on social media. Consider other strategies like influencer marketing, incentives, competitions, and public relations based on your specific needs. By evaluating your goals and unique requirements, you can maximise the impact of your budget and drive the success of your SaaS startup.
In conclusion, establishing a marketing function for your SaaS business requires careful planning and budgeting. From building a strong marketing team to investing in the right software and technology, there are several elements and expenses to consider.
However, partnering with a performance marketing agency like RevForm can help reduce costs and maximise results. By leveraging our expertise, you can focus on growing your business while we handle your marketing needs.
Don't forget to check out our marketing budget Excel template to help you create a realistic budget and measure the success of your marketing efforts. With the right strategies and resources in place, your SaaS business can thrive in the competitive landscape of 2024.