VIII. Your Move: The Role Assignments
GTM Spotlight: Marketing
What KBCM Measures
The survey’s Marketing coverage is real but shallow: it captures how much is spent, how leads are philosophically sourced, and which channels are in use. Every metric describes activity before the close. None describes what happens after it.
| Metric | Certified Value | Data Year | Source |
|---|---|---|---|
| S&M expense (% of revenue, median) | 54% → 42% → 37% | 2022 → 2024 | 2025 Survey, p. 39 |
| S&M expense, forecast | 35% (2025E) → 32% (2026E) | 2025E–2026E | 2025 Survey, p. 39 |
| S&M expense split: Sales / Marketing (average) | 54% / 46% | 2023 | 2024 Survey, p. 16 |
| S&M expense split: Sales / Marketing (average) | 63% / 37% | 2024 | 2025 Survey, p. 30 |
| Primary lead sourcing: Quality / Volume | 74% / 26% | 2023 | 2024 Survey, p. 15 |
| Primary lead sourcing: Quality / Volume | 83% / 17% | 2025 | 2025 Survey, p. 28 |
| SDR focus: Inbound / Outbound / Hybrid (average) | 28% / 30% / 42% | 2023 | 2024 Survey, p. 16 |
| SDR focus: Inbound / Outbound / Hybrid (average) | 21% / 56% / 24% | 2024 | 2025 Survey, p. 30 |
| New ARR by GTM motion: Field / Inside / Channel / Self-serve / Other (avg) | 56% / 28% / 11% / 3% / 2% | 2024 | 2025 Survey, p. 27 |
| New ARR by GTM motion: Field / Inside / Channel & Other / Self-serve (avg) | 60% / 18% / 15% / 7% | 2023 | 2024 Survey, p. 14 |
| Gross Magic Number (median) | 0.65 / 0.66 / 0.64 | 2022 / 2023 / 2024 | 2025 Survey, p. 4, p. 9 |
| Net Magic Number (median) | 0.5 for four consecutive years (2022–2025E) | 2022–2025E | 2025 Survey, p. 34 |
Channel usage, the survey’s most granular marketing question, trends as follows:
| Marketing Strategy Usage (% of respondents) | 2023 | 2025 |
|---|---|---|
| Paid Digital | 80% | 87% |
| Organic | 82% | 68% |
| 72% | 58% | |
| First Party Events | 69% | 70% |
| Third Party Events | 62% | 62% |
| Physical Mail | 9% | 13% |
And the one place the survey relates spend to outcome, S&M intensity against growth rather than against retention:
| S&M % of Revenue by ARR Growth Cohort (median, 2024) | <10% | 10–20% | 20–30% | >30% | Source |
|---|---|---|---|---|---|
| 2024 data | 35% | 37% | 42% | 55% | 2025 Survey, p. 33 (R² = 0.315, n=55) |
Three moves inside these tables deserve interpretive framing, because the survey presents them without any.
Marketing’s share of the S&M dollar collapsed while the S&M dollar itself was shrinking. S&M fell from 54% to 37% of revenue (2022→2024), and within that shrinking pool, Marketing’s share fell from 46% to 37% (2023→2024 survey averages). Multiply the two 2024 figures and Marketing’s implied budget is roughly 13.7% of revenue, 37% of a 37%-of-revenue line. Calculated Marketing absorbed a cut inside a cut.
The SDR reversal is the sharpest single-year strategy shift in the GTM dataset. Between the 2024 survey (2023 data) and the 2025 survey (2024 data), average outbound SDR focus nearly doubled, from 30% to 56%, while hybrid collapsed from 42% to 24% and inbound fell from 28% to 21%. The channel-usage table shows the same posture change from the other side: organic usage down fourteen points, email down fourteen, paid digital up seven. The industry stopped waiting for demand and went hunting for it. The survey records the pivot; it does not record whether outbound-sourced customers retain differently than inbound-sourced ones. Whether the pivot worked turns on that question, and the survey does not answer it.
Even the spend-to-growth relationship is weak, and the survey says so in a footnote. The S&M-versus-growth scatter carries an R² of 0.315 (2025 Survey, p. 33): spend intensity explains less than a third of the variance in growth outcomes. Two-thirds of what separates growers from stallers is something other than how much they spend, and the survey collects no candidate variables on the retention side of that residual.
What KBCM Concludes
KBCM’s direct commentary on the S&M line is retrospective and blunt. On the ZIRP-era spend that produced a 0.73 gross / 0.50 net magic number, KBCM described “companies heavily investing in S&M initiatives in anticipation of growth that was never realized” (KBCM commentary on the 2023 survey’s 2022 actuals, quoted in the companion analysis).
Beyond that, the survey’s implicit conclusion is carried by what it chooses to trend: the steady march toward quality-based lead sourcing (74% → 83% of respondents) is presented as maturation, and the outbound pivot is presented without editorial.
KBCM offers no commentary connecting any marketing metric to retention, because the survey architecture contains no such connection to comment on.
What We Conclude
Marketing pipeline mostly replaces churned ARR, and the survey cannot see it
The Net Magic Number has been pinned at 0.50 for four consecutive measured years (see Sales Productivity and Acquisition Economics): for every dollar of S&M spend, fifty cents of net ARR survives churn (2025 Survey, p. 34). The churn tax consumes 22–31% of gross S&M output every year, per the cross-survey record. At a $25M ARR company running the survey’s own 14% churn floor, $3.5M of ARR evaporates annually. Calculated That is pipeline Marketing must generate before a single growth dollar exists. Marketing’s targets are set against gross bookings needs, but the business only keeps half of what S&M produces, and no marketing metric in the survey acknowledges that the replacement burden exists.
“Quality” rose nine points while the churn floor did not move
Quality-based sourcing went from 74% to 83% of respondents between the 2024 and 2025 surveys. Across the same period, gross dollar retention sat at 85–86% (2025 Survey, p. 4), a churn floor of 14–15 points, unchanged. Two readings are possible: either lead quality does not influence retention (implausible), or the industry’s definition of “quality” is measured at sourcing (fit for the sales conversation) rather than at renewal (fit for the product). The second reading is the damning one, and the survey provides no data to escape it: quality is self-declared by the respondent, never audited by outcome.
The outbound pivot raises the stakes on a question the survey cannot answer
Outbound-sourced pipeline is interruptive by construction: the prospect was not looking. If outbound cohorts churn faster than inbound cohorts, a testable claim no survey year tests, the 2024 outbound surge is loading tomorrow’s churn line today, and the 2026E efficiency forecast (S&M at 32% of revenue, 0.82 gross magic number) is built on cohorts of unknown durability.
Marketing’s accountability is drifting away from where revenue now comes from
Expansion supplied 52% of pooled new ARR in 2024, the first year above 50% in the series (see Retention: GDR, NDR, and Loss Composition), and the shift is concentrated above $25M ARR (48% below $10M, 56% above $50M; 2025 Survey, p. 18). Every marketing instrument in the survey points at net-new demand. The survey cannot say what share of any marketing budget serves the installed base that now sources the majority of new ARR, because it has never asked.
The Blindspot
The structural omission is a missing edge in the data model: no metric anywhere in the 2019–2025 series links a lead’s origin to that customer’s retention outcome.
Concretely, the survey never asks:
- What is gross retention for marketing-sourced customers versus sales-sourced, channel-sourced, or self-serve customers?
- What share of churned accounts were poor ICP fits at acquisition, and which channel sourced them?
- What share of the marketing budget is spent on existing customers (adoption, community, customer marketing) versus net-new demand?
Why the omission distorts conclusions: the survey’s own headline economics are all downstream of acquisition quality: the 0.50 net magic number, the 37-month new-only CAC payback, and the roughly 37% of new customers (more than one in three) who churn before payback. Calculated If bad-fit acquisition is a material churn driver, then Marketing is a co-author of the churn floor and the highest-leverage fix sits upstream, in targeting. If it is not, Marketing deserves exoneration and the fix sits elsewhere. The survey renders the question undecidable, so Marketing carries no retention accountability at all, the only GTM function with a large budget and no measured link to the retention outcome.
The omission also biases behavior. What is measured is spend efficiency (magic numbers) and sourcing philosophy; what is unmeasured is cohort durability. The benchmark set rewards cutting cost-per-lead and filling pipeline fastest, which is what the 2024 outbound surge did, and tells a CMO nothing about whether the pipeline they filled will still be revenue in 24 months. Inference
What a Complete Picture Would Require
Each addition below closes a specific causal gap: the connective tissue between marketing activity and retention outcome that the current series cannot represent.
| Proposed Metric | Why It Matters Causally |
|---|---|
| Cohort GDR by lead source (12- and 24-month gross retention for marketing- vs. sales- vs. channel- vs. self-serve-sourced customers) | This is the single edge that makes marketing retention-accountable. If sourced cohorts retain differently, channel mix is a churn lever, and the outbound pivot becomes an evaluable bet instead of an article of faith. |
| ICP-fit score at close, tracked against churn | Converts “quality-based sourcing” from a self-declared philosophy into an audited prediction. If high-fit scores don’t predict retention, the ICP definition is wrong; if they do, fit discipline becomes enforceable at the pipeline gate. |
| Churn-replacement burden (share of pipeline consumed replacing churned ARR vs. funding net growth) | Makes the 0.50 net magic number actionable at the planning level. A company at 14% gross churn must generate the replacement wedge before any growth dollar exists; hiding this inside a gross pipeline target systematically understates the real marketing ask. |
| Customer-marketing spend share (% of marketing budget on existing customers) | Expansion supplies 52% of pooled new ARR in 2024, concentrated above $25M ARR (2025 Survey, p. 18). A budget instrument split between acquisition and installed-base marketing would show whether spend has followed revenue mix. Today the survey cannot distinguish a company spending 2% on customer marketing from one spending 40%. |
| Marketing-sourced expansion ARR | Expansion currently appears in the survey only inside the AE Productivity formula, which silently assigns it to Sales (see the companion analysis, Conclusion 2 ownership note). A marketing-sourced expansion line would give Marketing its share of the one growth motion whose share is rising. |
The pattern across all five: the survey measures Marketing’s inputs with precision and its consequences not at all. Until a lead can be followed past its close date, “marketing efficiency” in this dataset means efficiency at producing revenue the company has a 50% chance of keeping, and no one can say which half Marketing produced.
Related Spotlights
- Sales: the same measurement stops at the same signature: quota and productivity gross of churn, and the CAC economics marketing pipeline feeds into
- Customer Success: the function that inherits every bad-fit acquisition this page shows the survey cannot trace
- Product: where “quality” would have to be audited: fit for the product, measured at renewal
- Support: the early-warning telemetry that would reveal which sourced cohorts are struggling, long before churn
Frequently asked questions
What is SaaS marketing's net magic number?
The Net Magic Number has held at 0.50 for four consecutive years (2022 to 2025E): for every dollar of sales and marketing spend, only fifty cents of net ARR survives churn. No marketing metric in the underlying survey acknowledges this replacement burden.
What should Marketing do about the outbound pivot?
Marketing should test whether outbound-sourced customers retain differently than inbound ones. Outbound SDR focus nearly doubled from 30% to 56% between the 2023 and 2024 data years, a pivot the survey tracks without ever measuring whether the pipeline it filled will still be revenue in 24 months.
What does rising lead quality mean for Marketing?
Quality-based lead sourcing rose from 74% to 83% of respondents while gross dollar retention held flat at 85 to 86%. Since quality is self-declared at sourcing rather than audited at renewal, Marketing cannot yet prove that quality leads actually retain better.
How much SaaS revenue now comes from expansion?
Expansion supplied 52% of pooled new ARR in 2024, the first year it crossed half in the pooled data. Marketing's instruments still point entirely at net-new demand, and the survey has never asked what share of any marketing budget serves the installed base.
All certified values from the KBCM/Sapphire survey series. Analytical interpretations are the work of SuccessCOACHING and are not attributable to KBCM, KeyBanc Capital Markets, or Sapphire Ventures.
Last reviewed: July 2026