cost of outsourced marketing

The cost of outsourcing your B2B SaaS marketing

Stijn Hendrikse
Jan 6, 2021

What should you expect to pay when outsourcing your marketing function to a B2B SaaS marketing agency?

Budgeting for marketing isn’t easy, and neither is finding the right outsourced marketing team. In fact, outsourcing marketing is hard, and if you pick the wrong agency, you can setback your growth and risk your valuable time, money and resources. Luckily, there’s a way to ensure a positive ROI and measurable results when investing in an outsourced team. 

An increasing need for outsourced marketing 

As a B2B SaaS company, you’re probably lacking the necessary marketing experience because you’ve gone back and forth on your marketing efforts, building plan after plan, and blowing through resources with little to no results. 

Are any of these scenarios familiar to you? 

  • My agency wasted 6 months of resources and time doing SEO and my funnel is still empty.
  • We did a few marketing workshops and surveys, and we still don’t have a concrete marketing plan, let alone results.
  • My marketing team is doing a lot for the first time. Experiments are good if they lead to new insights, but not if I’m just paying the bill for my team to learn.
  • After my team or marketing leader finally learned how to do marketing for my company, they left for a better-paying role.
  • I want to outsource my marketing, but have no way to hold the agency accountable if they don’t deliver on their promises. 
  • I don’t know what I should be spending on marketing. It seems like a black hole without any transparent ROI. 

If you’ve experienced any of the scenarios above, you’re not alone. 

The diagram below depicts the average marketing “load” curve -- as you get started, your strategic marketing needs are high (i.e. identifying your positioning, defining your branding, setting up automation, and creating a great website). 

marketing costs over time

But by the time you’ve hired and ramped up your team, your marketing needs become far less complex, and can be accomplished with fewer (and cheaper) resources. Now, your team’s become more expensive––they’ve gained valuable experiences, and sometimes even jump ship to work somewhere else. The same often happens when you hire agencies, as they also let junior people ‘learn on the job’ while increasing their prices or move more experienced team members to other clients once they start to find their groove.

Whether you turn to a marketing agency or build your own marketing team in-house, this process often leaves you without the right talent, commitment and skills you need to execute and scale towards long-term profit. 

Budgeting for an outsourced B2B SaaS marketing team 

Your marketing function will require different resources as you go through your growth journey. Early on, you’ll need to invest in branding and positioning. Later, however, you’ll need a one-time investment in analyst relationships. 

Building a channel program requires a lift from someone “who’s done it before,” an example of an expensive resource that your SaaS venture won’t need forever. Because of this, many marketing efforts include the engagement of external experts. 

When planning your marketing budget, remember that when you hire a comprehensive team of full-time marketing professionals, you’ll still need some of these “one-time” external experts. Because of the economics of hiring external expertise, it makes more sense to outsource your marketing to a team with these experts on-hand. 

In doing this, you only pay for what you use --  just like renting vs. buying a boat. The image below describes the many different costs and fees to consider when you own your boat -- docking, insurance, fuel, taxes and financing -- and when you’re only using the boat 20 days out of each year, the gross ownership costs just don’t add up. Because of this, many boat lovers choose to join a boat club or simply rent.  

how much is a b2b marketing agency

However, B2B SaaS leaders face another problem -- on top of frustrated customers investing in empty promises from the wrong resources, marketing agencies and in-house team members are just as frustrated. Company leaders often have unrealistic expectations for their marketing professionals -- whether that’s getting leads in the first couple of weeks, or content creation that magically succeeds without the company’s product-market-fit (PMF), or a solid value proposition to articulate.

Marketing is abstract and difficult to define, with a different meaning to many people, agencies and marketing professionals. Because of mismatched understandings, marketing professionals don’t feel they’re set up for success and instead try to “wing it” without taking accountability for results. 

Taking accountability for marketing outcomes

At Kalungi, we think we’ve found a better way to approach B2B SaaS marketing. Based on our playbook and proven approach, we’re willing to put our money where our mouth is, and take accountability for your marketing results. 

This is because we control most of the variables across your marketing function, not just owning the content of your website or your outbound ABM approach. To be held accountable for your results, we take control of your brand’s positioning, campaign strategy, resource prioritization, and content planning (to name a few). By taking end-to-end ownership, we can assume responsibility for outcomes.

As you can see in the graphic below, a lot of “heavy lifting” must happen early in the engagement. Our playbook optimizes our team of experts “who’ve done it before,” lined up in the correct order with the right time availability to drive optimal speed and outcomes needed to get your marketing off the ground for a fast-growing B2B SaaS company.

marketing needs over time for b2b saas

By focusing all of our resources on setting a solid, research-backed go-to-market foundation, all other marketing activities point backwards toward your overarching objectives and goals. 

How much does outsourcing B2B SaaS marketing cost? 

By working with an experienced B2B SaaS marketing team, you’ll be provided with a team of 10-12 expert professionals who cover all of your needs -- design, strategic positioning, full-stack web development, copywriting, automation expertise, analyst relationship management, and more -- for the price you’d pay to attract, hire and onboard a team of three to four full-time marketing employees.

Kalungi has two typical engagement models:

  1. Pay-as-you-go: A monthly retainer for either Marketing Leadership (your personal outsourced Fractional VP of Marketing or CMO), marketing execution (a team of 10-12 Marketing Experts to plan and execute all necessary marketing work), or both together. You can cancel during any month. The pay-as-you-go engagement model gives you maximum flexibility with minimal risk on your marketing investment. 
  2. Pay-for-performance: When you let us run with both your Marketing leadership (a Fractional B2B SaaS CMO) and the Marketing team (your outsourced B2B SaaS Marketing Team) to execute your Fractional CMO’s strategy, Kalungi typically makes half our payment based on outcomes. By using our pay-for-performance methodology, you’re not just giving your company’s resources to someone making empty promises. Rather, you’ll pay for what we’ve accomplished according to mutually agreed upon engagement Objectives and Key Results (OKRs). 

For both engagement models, the pricing is dependent on your company’s size and marketing maturity (do you have any existing marketing capabilities?). We identify this through your ARR: 

cost of marketing agency

The cost of outsourcing your complete marketing function is typically the same as hiring a full-time marketing team, which is 25% to 30% of the size of your equivalent Kalungi team.

Kalungi’s current pricing is as follows (subject to change):

 

Profit

Scale

Start

MVP

Coach

Marketing Leadership
(Your own Fractional CMO)

$45,000

$25,000

$17,500

$12,500

$6,000

The average share of time

100%

75%

50%

33%

15%

Marketing Agency Services

(Your Marketing Team)

$30,000

$25,000

$20,000

$10,000

 

Average team size

20

15

10

5

 

 

For a B2B SaaS startup planning to hire its first marketing team of three to four people, the Kalungi alternative would cost between $30,000 to $37,500/month. For this amount, you’d get a team of 10 experts, plus your own marketing leader. All these team members would “have done it before,” and you miss the risk of hiring the wrong people, nor the delay of hiring, onboarding and training.

Most of the Kalungi engagements last six to 12 months, which allows for a maximum impact on your ROI. When a client decides to pre-pay part of the engagement, we offer discounts from 5%-15%.

The price of a Fractional CMO Coach

Some Kalungi clients already have a Marketing Leader, and are just looking for an experienced SaaS marketing advisor ‘who’s done it before’. As part of a Kalungi Coaching engagement, you’ll also get access to our complete B2B SaaS Marketing Playbook, templates, best practices, and the experience of the rest of our 75+ experts.

fractional CMO cost

Depending on the intensity of your marketing leadership needs, you can choose from three fractional CMO options -- pure mentorship, partial execution, and hands-on project management. If you have a current marketing function in-house but wish to refine and execute on your market strategy, using a Fractional SaaS Marketing Coach can deliver exceptional results. 

Should you outsource your B2B SaaS marketing?

If your B2B SaaS venture just got funded north of $10M, it’s probably best you hire a full-time marketing leader and let them build out your team. Kalungi can still help you “get going” while you recruit your permanent marketing leader by speeding up your recruitment, on-boarding and optimization to build the marketing function. 

If you’ve received less funding, you can’t run the risk of “getting it wrong” when hiring your first marketing team and leader. Outsourcing your marketing could be a great way to balance the “need for speed” with optimal returns and minimal risk.

If you’re interested in talking with one of our CMOs to discuss your options, don’t hesitate to reach out! We’d love to hear from you, and answer any questions you may have. 

Talk to a B2B SaaS marketing specialist

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