We track the return on sales and marketing spend of all the SaaS companies that went public since October 2017, starting with MongoDB. The dataset encompasses 72 SaaS companies, of which 63 still trade. The return on S&M is calculated simply as the dollar growth in revenue divided by S&M spend in a particular year. For instance, if revenue grows by $20mm and S&M spend was $40mm, then the return on S&M spend is $0.50 for every dollar of spend. If a company’s revenue did not grow, they’re excluded from the analysis. The data is below.
As the data shows, on median the typical SaaS company in in 2024 generated $0.38 of new revenue for every dollar of S&M spend. On average the figure is also $0.43. Both figures are down from their 2023 metrics of $0.43 and $0.48 respectively, so the return on S&M spend is worsening in SaaS.
For profitable companies, the median was $0.28 in 2024, down from $0.42 in 2023; that is a huge drop we cannot explain, but also note the slow revenue growth of the profitable companies at 9% YOY. Unprofitable companies, which are faster growing at 22% YOY on median, were far more efficacious with a median of $0.40 in 2024, although note that was also down from 2023.
Use this data for comparison to your own S&M performance.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com or connect on LI. No AI was involved in the writing of this article.
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