State of SaaS

An Annual
Marketing Report

Table of Contents

Hey 👋 I'm Corey, the founder of Swipe Files.

As a 4x first marketing hire and a marketer who's been at both bootstrapped and funded startups large and small, I've always wanted a way to benchmark against other SaaS companies to understand how I'm doing.

Unfortunately, that's been basically impossible...

Until now.

The State of SaaS Marketing is an annual report that aggregates data from hundreds of SaaS companies to build benchmarks on every major area of marketing.

Firmographics, target markets, team dynamics, pricing, growth, channels... it's the data I've always dreamed of having my hands on.

And now you can have it too.


Section 1 - Foundational Data

Here’s some basic information about the survey respondents who provided the data in this report. This is mostly for context.
The nature of surveys like this is that it will always be biased to the nature of the pool of respondents you’re soliciting to complete the survey. In this case, it’s the lovely Swipe Files newsletter audience list.

Which best describes the time your company has been in the market?

Which best describes the total capital raised at your company?

Which best describes the total employee count at your company?

Which best describes your current MRR?

Corey Haines
Swipe Files
"Marketing looks very different depending on product maturity, funding, team size, and revenue stage. You always have to custom tailor your marketing strategy to fit your unique situation."

Section 2 - Target Market

Which best represents your target customer?

Businesses are the dominant customer persona for SaaS companies. B2C pales in comparison. No one uses software for fun. It has to serve a purpose, which is usually done by making a business more money, saving it money, or saving it time.
Prosumers/Creators/Freelancers are a more popular customer persona than consumers. Prosumers are consumers that make decisions like a business. They’reusing software for a hobby, side project, creative outlet, or their own sole proprietorship.

Which best describes your primary market?

The US is the dominant regional market to sell software to. There’s an enormous amount of businesses with an enormous share of global value.
All of Europe only represents about 10% of market share (including responses that only listed a single European country, e.g. “Spain”).
Canada and Indonesia have equal market share with 3.5% respectively.

Section 3 - Marketing Team

In addition to you, how many full-time or contract employees currently work in marketing?

The vast majority of marketing teams are relatively small, with 5 orless people. It’s rare to see a marketing department with 20+ people.
There are a lot of marketing-team-of-one’s. It’s often the founder, CEO, or first marketing hire pulling all the weight.

How many contractors or freelancers do you work with?

It's no surprise that many companies work with marketing contractors and freelancers given how many specialized disciplines and skill sets there are. 66% work with at least one!
16% working with four or more contractors and freelancers is actually a pretty large amount. Essentially, whole marketing teams can be assembled using contractors and freelancers.

How many marketing agencies do you work with?

For the companies that do work with an agency, it's not surprising that they mostly invest in a relationship with a single main service provider to partner with.
I expected the number of companies working with an agency to be much higher than 19%. At the same time, this would make sense given the popularity of contractors and freelancers who can operate like a micro-agency.

Which best describes your annual spend on marketing tools?

Marketing tools add up, and fast. Expect to pay 5 figures annually as a rule of thumb.
With the rise of freemium plans, it seems a decent portion get away with spending virtually nothing on marketing tools. This is likely skewed towards very early stage startups, but still a higher percentage than I would originally expect.

How many tools do you use across your marketing team?

The number of marketing tools closely correlates to the diversity of marketing skill sets and disciplines (which is a lot!).
Given how large the MarTech Lumascape is, it's surprising to see how many companies get by with just five or fewer dedicated marketing tools. Many features and product functions are being bundled into a single tool.

Section 4 - Revenue and Pricing

Which best describes your monthly
Average Revenue Per Customer?

There’s a wide spread of average price points for SaaS companies. Between the target market, value delivered, and category norms, there’s no such thing as a perfect price.
This paints a pretty good picture between businesses that are primarily product-led growth with a lower average price point vs businesses that are primarily sales-led growth with a higher average price point. However, I would have originally expected the split to be pretty 50/50, or at least 60/40. Instead it’s about 75/25 in favor of a lower price point.

Which best describes the pricing plan for your highest-cost pricing tier on a monthly basis?

The lowest price point mirrors the ARPC from the last question pretty closely, which is a good indicator that the majority of customers are on lower priced plans, if not the very bottom plan.

Which best describes the pricing plan for your lowest-cost pricing tier on a monthly basis?

Almost every company that has a starting price point between $1-10/mo also offers larger price points. It’s rare to only offer arange of plans between $1-10/mo.

Do you offer a free trial for your product?

I originally expected a lot more companies to respond with “Yes” since it feels pretty ubiquitous across the board when looking at pricing pages and calls to action on homepages. And given the dynamics of the ARPC listed previously, I would expect to see more product-led growth models.

Do you offer a forever-free plan?

After not seeing many mentions of free trials, I would have expected to see more mentions of free plans.

It’s possible that freemium models are the dominant model, which just isn’t being represented in the survey here. Many freemium models today are more akin to a usage-based trial, which may not be accurately described as a free trial or forever-free plan.

Do you charge a setup fee?

Setup fees are pretty rare, with the exception of larger ARPC deals that require a lot of time from a customer success manager or solutions engineer.
13.3% is actually a pretty significant number. Given the breakdown of ARPC we saw earlier, this would suggest a meaningful portion of companies with high ARPC do charge a setup fee.
Sebastian Cuervo
GM Media at 42 Agency
"Most orgs do not have a setup fee (87%), and in parallel, 84% do not have a free trial for the product. That means products are probably thought of as the ultimate marketing tool, and the value is so clear people are willing to pay for it upfront. So is the PLG frictionless playbook still ruling SaaS?"

Section 5 - Growth Metrics

Which best describes your average year over year growth rate over the past 12 months?

There’s a wide spread of growth rates across the board. It may seem like every other startup is experiencing hockey stick growth, but the reality is that growth rates above 100% YoY are more the exception than the rule.
There’s still a large portion of companies growing at least 50% YoY. These numbers can be inflated by early stage startups working with small numbers, e.g. going from $10k ARR to $100k ARR and showing 10x growth. But that kind of growth is needed in the early days, so I would be concerned if there weren’t that many companies growing by 300%+. Still the 50%+ crowd is encouraging to see what’s possible.

Which best describes your average website traffic of unique visitors over the past 3 months?

100k+ unique visitors per month is a pretty rare achievement. It’s hard to imagine a market even being that big for a lot of SaaS companies. Mid thousands to mid tends of thousands of unique visitors is a very achievable milestone for most SaaS companies.
I’m surprised to see so many companies with less than 1k unique visitors per month. That’s an extremely small amount of traffic that makes it virtually impossible to grow.

Which best describes your visitor to lead rate?

Converting visitors to leads is hard! Even achieving 4%+ is a rare feat.
I am encouraged to see the portion of companies converting 2%+, as that’s a significant amount and makes life a lot easier as a marketer.

Which best describes your lead to customer rate?

40%+ lead to customer conversion rate is amazingly exceptional. If you’re one of the rare companies who can relate, you’re either really lucky or working with a really small number of leads.
The 0-10% portion feels larger than what I originally expected. It’s disproportionately larger than any other category, and a little discouraging given its the lowest conversion rate range. Alas, converting leads to customers is also hard!

Which best describes your total blended payback period?

It’s split pretty evenly between less than 6 months and more than 6 months, which isn’t surprising.
There’s a much higher amount of companies with a payback period of 0-2 months than I originally expected. That is an exceptional payback period, but my hypothesis is that it’s due to only working on “free” marketing channels or not doing much marketing at all that’s the real reason.

Section 6 - Marketing Channels

Which channel do you believe has the biggest impact on growing revenue?

Certainly a large spread of answers. The fact that one answer dominates the rest is still a good indicator of how different it is for everyone. If there were 2 or 3 dominant answers, that would paint a much different story of what’s working for SaaS companies.
I expected content to be one of the more popular answers, but I didn’t expect just how popular the sentiment is. That’s a huge portion! I expected product virality and advertising to be at least a close 2nd and 3rd. It's surprising that app marketplaces and engineering-as-marketing aren't as popular.
Jonathan Gandolf
CEO of The Juice
"I was encouraged to see that the respondents believed content had the greatest potential impact on revenue growth. Traditionally, content has meant many different things to many different marketers. The truth is that content flows through every marketing activity. While attribution can be tricky, a consistent approach will ensure that the right message finds the right person at the right time."

Which channels have you invested resources in the last 12 months?

Content and advertising lead the pack, which I would expect to see given the responses to the previous question. The distribution isn’t an exact match, however, so it’s interesting to see the differences.
Partnerships are an outlier as a clear 3rd. This is a channel that is more under the radar, but up and coming.
It's surprising that guerrilla tactics aren't more popular. Scrappy, unorthodox tactics used to be more of the norm of what you'd expect from a startup.
Brett McGrath
VP of Marketing at The Juice
Host of Modern Day Marketer
"These results indicate that content can no longer be siloed by a function. Content is how brands communicate, educate, and build trust with our customers. It's critical that marketers recognize content is the fuel to more revenue and should be the responsibility of everyone in a customer facing role. Building a culture of content opens the door to individual distribution channels. Finding reach in new channels and building resonance through content is how we create fans who end up buying our products."

Which channels have your company advertised on in the last 12 months?

Google, LinkedIn, and Facebook are still the "Big 3" in SaaS advertising. The mix of reach, targeting, and ad platform maturity make them go-to options.
It's interesting to see Newsletters as one of the emerging advertising channels, outpacing Instagram, Twitter, and YouTube. Podcasts had just a single response, which I would have expected to at least be equal to Newsletters.

Does your company send an email newsletter?

Email marketing is still a main stay in SaaS and a regular part of the mix for the majority of SaaS companies.
35.4% is still a significant number of SaaS companies leveraging email marketing to its full potential. Personally, I’m a huge fan of newsletters as a product and customer marketing strategy.

Which best describes how much money you have invested in marketing in the last 12 months, including salaries?

There’s a wide spread of results across the board. This question in particular is going to depend on revenue, funding, and time in market. So it’s not a great standalone analysis. Regardless, interesting to compare against budgets.
I’m actually quite surprised to see that the $100,000 – $1,000,000 answer was the 2nd most popular. A 6 figure investment in marketing is nothing to snuff at.

Special thanks to...

Webpage Design:
Nick Loudon
Twitter: @ItsNickLoudon

Data Analytics: Drake Senter
Twitter: @DrakeSenter