The Sales/Marketing Expense Ratio
The article introduces the sales-to-marketing expense ratio as a critical metric that reveals organizational budget priorities and operational efficiency trends in SaaS companies. It explains why this ratio tends to drift unfavorably (sales spending increases while marketing gets squeezed) due to CRO negotiating leverage and demonstrates how to surface and correct this imbalance through metrics transparency, funnel modeling scrutiny, and cross-functional alignment.
Metrics in this report
2700dollars
baseline
Before aggressive funnel assumption changes
1800dollars
target
After compounded funnel improvements (33% reduction)
23percent
median
SaaS companies spending 35% of revenue on S&M
34percent
top-quartile
SaaS companies spending 35% of revenue on S&M
35percent
median
$15M ARR SaaS companies
45percent
top-quartile
$15M ARR SaaS companies
15percent
minimum
$15M ARR SaaS companies (bottom quartile)