We’ve been tossing the sales and marketing metrics ball back and forth and around the OPEXEngine Room the past few weeks. Cost structures can vary widely between peer groups of revenue size, growth rate, and average contract value (ACV). Our Benchmark Engine can break out benchmark data by ‘Sales Growth: Top 25%’ and also ‘Net Profit: Top25%.’ The differences are quite striking in places, and our data supports much of what Jason Lemkin writes in this article, Why Can’t SaaS Companies Just Mint Cash?
Jason does a great job of writing about how the structural differences are manifested in a company, and he writes it in an easy to read and conversational manner.
One of my favorite lessons he cites is also his shortest: “Fiefdoms can consume a lot of cash. Do you really need 12 people on the product team? 18 in marketing? You do? Really?“
Our data shows that lots of times you don’t. OPEXEngine data shows the top profit-makers are generating more revenue with fewer people, and at an almost identical cost per sales employee, than the companies at the top of the sales-growth list. Our data also directly supports his comment, “Go upmarket. Get your ACVs up.” when faced with competition. (These are just some of many useful ways to use our BenchmarkEngine!)
Please give us your thoughts about Sales & Marketing cost structures of SaaS companies that meet what kinds of objectives.