How SaaS companies spend their money varies based on their specific product, size, and market. However, a detailed analysis from our survey of over 700 private SaaS businesses reveals noteworthy patterns among top-performing businesses that all SaaS company leaders should be cognizant of.
HOW DO TOP-PERFORMING SAAS COMPANIES SPEND THEIR
How SaaS companies spend their money varies based on their specific product, size, and market. However, a detailed
analysis from our survey of over 700 private SaaS businesses reveals noteworthy patterns among top-performing
businesses that all SaaS company leaders should be cognizant of.
We used our survey data to compare the spending
patterns of top-performing growth+profitability1
companies to the spending patterns of bottom-
performing businesses. To the right is a graph showing
the difference in spending by category between the top
quartile companies and the bottom quartile companies.
Top-performing SaaS companies are finding ways to
spend significantly less on direct cost of goods sold
(hosting, support, consulting, third party software),
and are also spending less on overhead relative to
their peers. They are reinvesting those dollars into
the areas that more directly touch the customer and
drive revenue: sales, marketing, customer success, and
product. Many times, the product itself dictates CoGS
and is difficult to change. That said, those businesses
that have lower direct costs appear to be able to re-
direct those dollars into efficient growth.
Breaking the top and bottom performers down based on
the size of their revenue (ARR) reveals additional insights.
SaaS businesses below $10 million in ARR (the bottom
two groups) mirrored the general trends we observed for
all SaaS businesses regardless of size – top performers
have lower overhead and CoGS and spend more on sales
Looking across all revenue sizes yields additional
1. As top performers scale, they invest more and more
in customer success relative to their less successful
peers. These companies appear to recognize the
increasing importance of reten