Average Cost Per Lead: SaaS

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Overview - US: B2B Saas's Willingness To Pay for SQL's

Upon searching for information regarding the average cost per lead of B2B SaaS companies in the United States, in addition to the number of leads that they generate per month, much of the available information was conflicting, or included a scope that was wider than requested for this project. For example, relevant industry reports that had information regarding average cost per lead and number of sales-qualified leads (SQLs) that are generated per month focused on the technical and software industry as a whole, as opposed to just B2B SaaS companies. For this reason, some measurements pertaining to the average amount that these businesses spend have a very wide range. However, this information will be reported below for comparison, as well as the mentioning of other sources and their estimates of how much SaaS B2B companies in particular spend per lead. In addition, two examples of ways in which B2B SaaS companies spend their money for leads (Google AdWords and LinkedIn Ads) will be provided for a deeper understanding of costs per lead and associated revenues generated as a result. From this information — even the numbers on the extreme high and low ends — it can be concluded that B2B SaaS companies would likely be willing to spend between $1,000 and $2,000 per month for 400 to 500 SQLs, as it would save them a significant amount of money on a monthly basis.

Average Cost of SQL's in Tech and Services Industry

According to the Demand Generation Benchmark Report from 2015, companies in the information tech & services industry obtain between 500 and 1,000 leads per month and spend between $51 and $100 per lead. There was no indication within this report, however, that the leads were obtained through a third party. Regardless, it can be determined that in 2015, companies in the IT & services industry spent between $25,500 and $100,000 every month for leads.

[500 leads minimum] * [$51/lead minimum] = $25,500 minimum for leads

[1,000 leads maximum] * [$100/lead maximum] = $100,000 maximum for leads

In 2017, this same report was published again with more recent data stating that, on average, IT & services companies were spending approximately $369.88 per lead, a major increase from 2015. On average, approximately 3,052 of the leads that they received were SQLs, and around 416 sales opportunities were generated from these leads. Specifically focusing on the SQLs that lead to sales, it can be calculated that IT & service companies spent around $153,870.08 for each successful lead.

[416 sales from SQLs] * [$369.88 per lead] = $153,870.08 per month for successful sales from SQLs

The reason for focusing specifically on successful sales in this calculation is that, within the report, it states that IT & services companies generate 1,481,571 visitors to their site every month. From these visitors, around 3,660 produce leads, and 3,052 of the leads produced are SQLs. It would be too high of an estimate to calculate how much companies are spending per month based off of page visitors, and there is no indication of where the SQLs came from (whether from a third party or elsewhere).

Based on the information provided between 2015 and 2017, it can be concluded that the amount that companies are spending per lead is increasing over time. In 2015, IT & services companies spent anywhere between $25,500 and $100,000 every month for leads, and in 2017, these same business spent around $153,870.88 per month on successful SQLs.

When this new plan of $1,000 to $2,000 per month for 400 to 500 leads, companies would only be spending between $2.50 and $4.00 per lead.

[$1,000/month minimum] / [400 lead minimum] = $2.50/lead minimum

[$2,000/month maximum] / [500 lead maximum] = $4.00/lead maximum

With the new plan, companies could save between $152,206.08 and $152,830.08 every month on SQLs, a significant amount. These differences in costs per lead and monthly savings give reasonable proof to conclude that business would likely be more than willing to spend $1,000 to $2,000 per month for 400 to 500 SQLs. Keep in mind that this data considers the IT & services industry as a whole, not specific SaaS B2B companies, and is likely an overestimate. It is included for the purpose of a comparison.

[$2.50/lead minimum] * [416 sales from SQLs in 2017] = $1,040 minimum per month for sales from SQLs

[$4.00/lead maximum] * [416 sales from SQLs in 2017] = $1,664 maximum per month for sales from SQLs

[$153,870.08 per month for sales from SQLs] — [$1,664 maximum with client plant] = $152,206.08 savings

[$153,870.08 per month for successful sales from SQLs] — [$1,040 minimum with client plan] = $152,830.08 savings

Google AdWords for B2B Saas companies

In a report released based on data from 2017, Software and SaaS B2B companies spent approximately $106 per lead through Google AdWords. Around 32% of all company leads for the year were produced from Google AdWords for B2B SaaS companies included in this study, and around 38% of the leads led to sales opportunities, with an average rate of interest of 255%. The revenue produced from each sale due to Google AdWords for B2B SaaS companies in 2017 was approximately $340. No information was provided on how many leads B2B SaaS specific companies were obtaining through Google AdWords. Although Google AdWords is not providing a list of SQLs to businesses, it provides a way to understand average spending habits of B2B SaaS companies and how it produces leads.

Based on the new plan, if businesses were to receive a list of 400 to 500 SQLs per month for $1,000 to $2,000, they would spend around $2.50 to $4.00 per lead (based on above calculations). This would save them between $102 and $103.50 on every lead, which leads to the conclusion that B2B SaaS companies would likely be willing to commit to this new plan.

[$106/lead AdWords] — [$2.50/lead minimum] = $103.5 maximum savings per lead

[$106/lead AdWords] — [$4.00/lead maximum] = $102 minimum savings per lead

LinkedIn Ads for B2B SaaS Companies

A 2016 report regarding the use of LinkedIn ads by Software and SaaS B2B companies stated that around $575 in revenue is generated per lead through LinkedIn ads, and approximately $3,500 in revenue for sales due to these ads. Although no numbers were provided based on how much these companies spend per lead through these, the report did state that B2B SaaS and software companies spent around 2.5% of their total revenue on LinkedIn ads, and around 5% of their total leads come from these ads.

Conclusion

Based on the information from these reports and the proposed plan of $1,000 to $2,000 per month for 400 to 500 SQLs, it is likely that B2B SaaS companies would be willing to spend this much for leads on a monthly basis. As it stands right now, the IT & services industry as a whole, in addition to specifically B2B SaaS companies, spend significantly more than this much for leads on a monthly basis from one source, if not across multiple locations. The amount of revenue that is generated per lead seems to outweigh the costs for most companies, but with an even lower cost per lead, business would increase revenues significantly. On a final note, if interested specifically on the setup for marketing and sales departments in B2B SaaS startup companies, a second request may prove helpful, as this research project primarily provided information regarding the current spending habits of these businesses for leads.
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