While finding the right SEO budget is never easy, it’s even harder for SaaS companies who typically need a larger budget to compete against established competitors.
In this article, I’ll walk through a few things to keep in mind when you’re determining how much to spend on SaaS SEO.
How Much Should a SaaS SEO Budget Be?
In terms of SEO budgeting for SaaS companies, it’s recommended to allocate between 5-10% of total revenue. Industry insights indicate that while the average marketing spend was around 6.5% in 2021, forward-thinking SaaS firms targeting aggressive growth are now leaning towards a 10% allocation in 2023.
This will depend on the size and profitability of the company, but ultimately, you’ll want to consider spending 5-10% of your revenue on monthly SEO expenses.
While there isn’t any magical number for setting your SaaS SEO budget, the best strategy for choosing the proper budget is using a percentage of revenue.
This could be in-house SEO budgets or budgets being outsourced to another agency.
Whatever it is, you’ll want to find the proper budget that can contribute to the right success for your company.
Your goals will dictate your budget too.
A high-spending SEO budget may be necessary for startups looking for growth.
But if you’re already positioned well in your market and looking for sustainable long-term growth, you can get away with a medium-sized SEO budget.
How Does Budget Contribute to SaaS SEO?
Your budget will ultimately dictate the results you can receive through SEO.
Especially for a startup with a fresh website, there’s much more to consider than just creating content.
You’ll need to adopt a growth-first mindset that allows you to target the SEO tactics that produce the most growth in the shortest amount of time.
These growth-first tactics aren’t cheap, so having the budget necessary will make all the difference.
You can use traditional SEO that focuses on a set number of monthly content, but this approach is becoming outdated given the extended wait periods to see ROI.
With a higher budget, this growth-first approach will allow you to see results in a shorter period rather than waiting 3-6 months to see results.
Should a SaaS invest in SEO?
Almost always, it’s going to be worth investing in SEO.
Especially with SaaS, you can build a pipeline entirely through SEO (inbound).
When you invest heavily in SEO, you can eventually scale back your outbound efforts and focus primarily on inbound channels with a significantly lower customer acquisition cost.
Eventually, if you use an omnichannel approach like email marketing, organic social media marketing, and SEO, you can create an inbound pipeline that requires no heavy lifting from paid advertisements.
You can still run them to capture unaware audiences, but your inbound pipeline will be your company’s primary growth driver.
Think about it like this: with outbound, you’re temporarily renting an audience, and with inbound, you’re growing your audience.
Inbound fosters this sense of trust with your audience that’s harder to build with outbound.
And with SEO, once you have all your parts in place, you can set and forget it, and it will continue to drive results, usually without any additional involvement.
You’ll want to continue creating content to capture more audiences and reach more touchpoints, but your existing content will generally perform for you without any additional work.
How to Forecast SaaS SEO
You can use these calculations and metrics to forecast your SaaS SEO data better.
Keyword Growth Forecasting
Calculate the Growth Rate:
Growth Rate= Present Search Volume-Past Search Volume/Past Search Volume×100%
Forecast Future Search Volume:
Future Search Volume=Present Search Volume×(1+Growth Rate)
Seasonal Trends Analysis
Calculate the Seasonal Index for a given period (e.g., a specific month):
Seasonal Index=Search Volume for the Period/Average Search Volume
Forecast Future Search Volume:
Future Search Volume=Projected Search Volume without Seasonality×Seasonal Index
Why Do SaaS Companies Spend More on SEO?
SaaS companies need to spend more on SEO because of the buying intent behind most SaaS products.
Regarding SaaS, subscription costs can range anywhere from $10/month to $5,000/month.
Because of this, SaaS companies need to understand the entire buyer’s journey before a user makes a purchasing decision.
Regarding these higher-priced products, users aren’t going just to read one article and buy your product.
You may have a few outliers where that happens, but it will be rare.
Instead, these users must be engaged at multiple touchpoints throughout your marketing funnel.
So whether that’s multiple touchpoints through search or a mixed approach where they’re engaged through SEO, email, and organic social.
The same goes for a lead magnet too.
You can’t expect a user to download a whitepaper and immediately convert.
You’ll need to engage them further to push them down the funnel.
Even pushing them down the funnel isn’t guaranteed to drive results.
But having multiple touchpoints in place will be the best way to automate your touchpoints by creating content they can find throughout their buyer’s journey.
That’s why I recommend starting at the bottom of the funnel before making your way up.
Think about it; a user follows the discovery, consideration, and decision process.
The decision is ultimately the decision they make whether they want to choose your brand or not, so it’s essential to have content in place that can help sway their decision before moving on to content that doesn’t move the needle.
For bottom of the funnel, this could be a “competitor vs competitor” article.
For consideration, this could be “competitor alternatives” or “best “niche software.”
So, in this case, when someone comes across your article about the “best software products,” they may select a few options they want to investigate further.
Once they’re getting closer to a decision, they might have two products they’re split between.
If they’re comparing these two products through search, the goal is to have optimized content that can sway their decision toward your product.
So if they are ultimately choosing between Ahrefs and SEMrush, you (imagining your Ahrefs) can create an article optimized around “Ahrefs vs. SEMrush” that compares your SEO tool vs theirs.
This allows you to control the narrative about your product and sway users toward your product.
From the bottom of the funnel to the top, there are many touchpoints to consider, especially for SEO.
This is why SaaS tends to need a larger budget for SEO.
Just check out this checklist that shows how much is involved with SaaS SEO.
Should a SaaS Invest in PPC Too?
While PPC is great for short-term growth, it’s not sustainable as a long-term strategy.
You’ll want to start with PPC to capture leads while your SEO progresses.
With SEO, you’ll receive compounding results over time, so you’ll want to use both strategies until your SEO has caught up or surpassed your PPC results.
After SEO surpasses PPC, you can scale your outbound budget back to focus on more inbound channels.
So the answer to this will always depend, but using PPC with SEO is a good starting point for a SaaS.
Need Help Finding the Right Budget for Your SaaS?
Are you looking to find the right SaaS SEO budget? Feel free to schedule a call with me to discuss more.
I’m a SaaS SEO consultant with 5 years of experience. I can help find the budget that makes sense for you.