Where Should Mid-Sized SaaS Companies Spend to Grow?

Over my decade-plus in content, pre-sales, and marketing, I’ve seen one question come up time and again: “How much should we spend on marketing—and where?”

For mid-sized SaaS companies, this isn’t just a budgeting exercise; it’s a strategic decision that can make or break growth. With so many channels, tools, and strategies to choose from, allocating your budget wisely is a must. I’ve been there—juggling tight budgets, balancing priorities, and trying to make every dollar count.

Here’s how to think about it (and a few lessons learned along the way).

1. Start with the Bigger Picture: According to a survey by Gartner, 68% of CMOs feel their marketing budgets are underperforming because they’re not tied to business objectives. Before diving into numbers, take a step back. Ask yourself:

• What’s the primary goal? More leads? Retention? Brand awareness?
• What’s your company’s growth stage? Early-stage SaaS needs more acquisition spend, while mature companies might shift focus to retention and brand-building.

Your goals define your spend. For example, if you’re chasing MQLs (Marketing Qualified Leads), your budget will lean heavily toward paid ads and lead-gen campaigns. But if you’re nurturing existing customers, retention strategies like email marketing or customer success programs should take priority.

Think of this step as setting the GPS for your marketing journey. Without a clear destination, even the best budget allocation won’t get you where you want to go. Once your big-picture goals are crystal clear, it becomes much easier to decide where to focus your spend and measure success effectively.

Pro Tip: Align with other teams—sales, customer success, and product—to ensure your marketing goals support overall business objectives. Collaboration helps you avoid wasting resources on misaligned campaigns.

2. Break Down Your Budget Like This: Here’s a breakdown I’ve found works well for mid-sized SaaS companies:

a. Paid Acquisition (25-40%)

• Why It Matters: Paid ads are still one of the fastest ways to generate leads. Platforms like Google and LinkedIn let you laser-target your audience—job titles, industries, company size, you name it.
• My Experience: I’ve seen campaigns with modest budgets outperform big-spenders because they honed their messaging and audience. It’s not about throwing money at ads—it’s about smart targeting and A/B testing.

Tip: Start small, test aggressively, and double down on what works. Always monitor CAC (Customer Acquisition Cost)—you don’t want to spend $2 to make $1.

b. Content Marketing (20-30%)

• Why It Matters: SaaS buyers research a lot before making decisions. Blogs, eBooks, webinars, and case studies help position your brand as a trusted expert while nurturing leads through the funnel.
• My Experience: Evergreen content (think SEO blogs or ROI calculators) has been a game-changer for long-term ROI. Unlike ads, content keeps working for you long after it’s published.

Tip: Don’t just write blogs—focus on content that solves real problems for your audience. And repurpose! A whitepaper can become a webinar, a blog, and a LinkedIn carousel.

c. Customer Retention & Upsell (15-25%)

• Why It Matters: It’s cheaper to retain a customer than to acquire a new one. Plus, upselling can be a hidden goldmine for SaaS companies.
• My Experience: One of the biggest mistakes I’ve seen? Spending all the budget on acquisition and ignoring the customers you already have. Tools like automated emails and personalized campaigns can boost retention and upsell opportunities dramatically.

Tip: Don’t overlook post-sales content. Guides, tutorials, and webinars for your current customers drive adoption and keep them coming back.

d. Brand Awareness (10-20%)

• Why It Matters: Competing with bigger SaaS players? You need to stay visible. PR, events, and social media campaigns help establish credibility and ensure your name pops up in the right conversations.
• My Experience: I’ve seen startups punch above their weight by investing in thought leadership—guest posts, webinars, and panels. It’s not always about paid visibility; sometimes, showing up in the right places builds trust organically.

Tip: Don’t just spend on “fluffy” awareness campaigns. Tie your efforts to measurable goals like demo requests or website traffic.

e. Tools & Analytics (5-10%)

• Why It Matters: The right tools make everything else run smoothly. From CRM systems to analytics platforms, they give you insights and automate repetitive tasks.
• My Experience: Don’t overdo it. I’ve seen companies burn cash on fancy tools they barely use. Focus on platforms that integrate well and actually solve problems.

Tip: Invest in tools that track ROI. If you can’t measure it, it’s not worth spending on.

3. Avoid These Budgeting Pitfalls: Let’s be real—marketing budgets are tight, and mistakes can be costly. Here’s where I’ve seen companies go wrong:

• Over-indexing on awareness: Awareness is great, but if it doesn’t lead to conversions, you’re just burning cash. Tie awareness campaigns to measurable goals.
• Ignoring retention: Existing customers are your best advocates (and often your most reliable revenue stream). Skimping on retention is a huge missed opportunity.
• Shiny tool syndrome: Fancy tools won’t save a broken strategy. Invest only in what you’ll use regularly and what supports your goals.

4. Benchmarks and Flexibility: A good rule of thumb for SaaS marketing is to allocate 10-25% of your annual revenue to marketing.

• Early Stage: Closer to 25%, focusing on aggressive acquisition.
• Growth Stage: Around 20%, balancing acquisition, retention, and scaling efforts.
• Mature Stage: Closer to 10-15%, leveraging brand equity and organic growth.

But budgets aren’t static. Review your spending quarterly. If a channel isn’t delivering, don’t hesitate to reallocate. Marketing is all about adaptability.

Spend Smarter, Not More

Here’s the truth: It’s not about how much you spend—it’s about where and how you spend it. A well-thought-out marketing budget is your growth engine, but only if it’s tied to clear goals and measurable outcomes.

Over the years, I’ve learned that there’s no magic formula—every SaaS company has unique needs. But if you focus on high-impact channels, track performance relentlessly, and stay flexible, you’ll get the most out of every dollar.

#SaaSMarketing #MarketingBudget #GrowthStrategy #ContentMarketing #CustomerRetention #DigitalMarketingTips