Common practice is to measure Sales and Marketing expenses as a percentage of revenue, which in the SaaS industry ranges between 20% - 60% based upon stage, growth and efficiency. CAC and Growth discuss an alternative metric which measures the ratio between Sales expenses and Marketing expenses, known as the Sales/Marketing Expense Ratio.
During this episode topics discussed include:
- Sales and Marketing expense as percentage of revenue benchmarks
- Sales and Marketing expense ratio - value and insights
- What a 2:1 Sales and Marketing expense ratio means
- What drives a changing Sales and Marketing expense ratio
- Customer Acquisition Cost Efficiency metric - CAC Ratio vs S&M Expense Ratio
If you are interested in measuring the allocation of the GTM budget between Sales and Marketing, this is a great episode and listen.
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