How much should B2B tech company invest in sales & marketing?

How much should a B2B tech startup spend on marketing? This is one of those questions that keeps resurfacing, especially when funding is tight and expectations are high. The usual expectations for marketing are simple: build hype for the company and drive lots of leads. That’s what founders, execs, investors, and frankly everyone wants.

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But here’s the hard truth: marketing is a game of investment and ideas. If you don’t have the money, you need better ideas. If you have money, you can sometimes get away with mediocre ideas. But even the best ideas still need exposure. And that has a price.

Oh so you want it to go viral, “because that’s free”. Some sell virality as a science, note that you need to pay for their science. But most “viral” hits are engineered with smart scripts, high production value, media budgets, and relentless promotion. There is no free tips shortcut. And in the B2B world, everyone’s chasing the same leads on the same channels. If you’re not coming up with a better idea, you’re part of the noise.

The quick wins (email campaigns, LinkedIn hacks, cold outreach) can work in the short term. But they’re sugar hits. You need persistence and good ideas for the protein: constant visibility, trust, clarity, persistence, freshness. That’s what building a brand requires.

So let’s talk about money, I researched the financials of dozens and dozens of B2B tech companies to try and find how much the budget should be. Here’s the hard truth, they invest 44% of their budget in Sales and Marketing and 31% in R&D (the rest was General and Administrative). Those are the averages, the median investment in Sales and Marketing is 46% vs 28% in R&D.

Yet most B2B tech companies don’t do this. The difference? I only researched the ones who successfully exited.

It’s tempting to try cheap marketing. Fiverr gigs, junior marketers, quick-fix consultants, but the fact is you get what you pay for. Great marketing is not cheap. And once you have paid for the talent, you still need to pay for the distribution / exposure of the great ideas.

So here’s the rule of thumb: match your product development spend with an equal investment in sales and marketing. If you’re spending $1 million on engineering, spend another $1 million on marketing and sales. Anything less, and you’re not giving your product the chance it deserves. Don’t blame the market if you haven’t invested in reaching it.

It is a hard pill to swallow, but if you’re not spending enough to be seen and generate revenue, you’re just building great tech in a dark room.

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About me: I’m a fractional CMO for large travel technology companies helping turn them into industry leaders. I’m also the co-founder of 10minutes.news a hotel news media that is unsensational, factual and keeps hoteliers updated on the industry.

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