318. Headcount 🐨
The proper ratios for marketing headcount & how to make the case for more
Hi there 👋
This week I have the rare opportunity to meet with some Oyster teammates in person. Having worked for fully distributed teams at Buffer, Vox, Polly, and now Oyster, I’ve done the math, and over the past ten years I have spent an average of 1.5% of my working time in the same location as the people I work with (about five days per year on average). That’s not very much!
This week we’ll be planning for the second half of the year, and one of the topics we’ll discuss is headcount. I thought I’d share a few of my thoughts around how I plan for marketing headcount relative to company headcount. Hope you enjoy, and let me know any headcount tips you’ve picked up over the years!
Wishing you a great week ahead,
Kevan
(ᵔᴥᵔ)
Thank you for being part of this newsletter. Each week, I share playbooks, case studies, stories, and links from inside the startup marketing world and my time at Oyster, Buffer, and more.
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Marketing headcount ratios and benchmarks for SaaS
For better and for worse, I feel a sense of pride whenever people see the work of one of my marketing teams and assume we have way more marketers on staff than we truly do. For instance, we ran Buffer marketing with less than 10 teammates for many years, and we were a two-person marketing team for my first two years there.
(I say for better and for worse because sometimes having a small team can mean we’re working very efficiently on the right channels (better) but everyone may be doing more than their fair share of work (worse).)
But who’s to say what a big or small marketing team truly is?
How do you define it?
I’m going to take a stab at it with the full knowledge that these things vary widely from company to company and that a “good” ratio the way I define it might make no sense whatsoever for the company you’re at.
As with most things I say in this newsletter, feel free to use this as one datapoint and to enjoy with a grain or two of salt. :)
Bird’s eye view: Marketing as 10% of company headcount
In talking with fellow startup marketers and in reflecting on my own experiences with building a marketing team, full-stack SaaS marketing teams are typically 10% of company headcount.
This includes:
Growth marketing / demand gen, which typically needs to scale at its own specific ratio relative to pipeline targets and salesforce size. The good news is that demand gen won’t scale as linearly as other functions, meaning you’ll end up hiring at less volume once your systems and efficiencies pick up steam)
Product marketing, which tends to staff 1:1 with the product team’s PMs
Brand marketing and content and design, which are sometimes placed into other departments within a company. These are the the true “hidden heads” of a marketing headcount as you need these roles to function effectively. For instance, at Oyster we have a full design and creative team that reports into marketing, and we’re responsible for customer communication across the entire lifecycle. Therefore, our team needs all the 10% of headcount it can get
It’s important that if others at your company have a different interpretation of marketing headcount ratios that you align on what you all mean by “marketing.” It may be that they came from a place where design or brand were counted elsewhere.
The 10% headcount ratio is also in line with some of the advice out there about marketing budget. Ten percent for marketing spend seems to be a standard percentage of overall company spend. This will of course vary based on the channels that you run as a marketing team; for instance, at Buffer we did almost everything organically and at Oyster we use paid search and social as key channels.
Drill-down #1: Marketing & sales as 30% of headcount
It may be that you have a company with a sales team, in which case you can expect for sales headcount to make up a large portion of the overall company size, too. Often when you’re in budget planning, finance will group sales and marketing costs together, so you may have a shared headcount number as well.
Drill-down #2: Marketing as a 1:2 ratio to sales
You can also gauge your marketing size by looking at your headcount relative to sales’s headcount. Do you have enough people to adequately serve the sales team? This tends to be a more traditional drill-down than I’m comfortable with because it assumes a sales-driven perspective on company growth and I tend to see brand playing a pretty big role, too. Because of this, some companies have a 1:5 ratio or higher. I will advocate for closer to 1:2, especially if your marketing team includes brand, content, design, etc.
Drill-down #3: Marketing as a 1:1 ratio of programs to people
You could also think of headcount relative to the programs you want to run. This is the way that folks like Donna Wells, founding CMO at Mint, and Andy Jolls, CMO at FastSpring have talked about it.
Typically my ideal ratio of people to programs is 1:1, but as you scale and the business gets larger it can shift from 1:1 to 1:2. Of course, the business model will shape this as well.
Again, the challenge here will be how you staff the resources to support these programs. For instance, if you have one person running a lifecycle program, will they need copywriting help, design help, marketing ops help, etc.?
Ways to ask for more headcount
There may come a time when you’re needing a little extra backup for making your case for marketing headcount. Here are some of the tactics and datapoints I’ve used in the past.
Benchmark to other companies in your space
If you think competitors would make a compelling argument, you can pitch the team on matching your marketing headcount to what others are doing in your space.
… similarly, benchmark to companies you aspire to become
The same goes for any companies out there with a growth trajectory that you’d like to match — say a HubSpot marketing team since you aspire to create a category, or a Webflow team since you want to marry PLG and sales.
Whether you’re benchmarking to competitors or to aspirations, one of the best (and quickest) ways to do it is on LinkedIn. Here’s how
Go to the LinkedIn page for the company you want to research. Here’s Loom’s page for example.
Click on the People link in the menu.
3 - On the People page, you’ll see a breakdown of the team by various characteristics. Click on “Next” a couple times until you see the section for “What they do.”
4 - Then it’s just a simple math calculation. If Loom has 28 people on their marketing team and are a company of 287 employees, then Loom’s marketing team is 9.7% of company size.
Replace agency with headcount
If cost is a major factor in headcount, you can be creative by replacing agencies or freelancers or consultant budgets with requests for full-time hires.
Tie ROI to the growth model
Sales headcount tends to derive straight from a revenue growth model. Say a company wants to grow by $x and one sales rep brings in $x per month, then you can do the math to figure out how many sales reps you need to have.
It’s not nearly as straightforward to do this for marketing, but it can be done. Take content for instance. If you know that x# of traffic to your content leads to x# of acquisition, then you can work out how many content writers you will need to drive your desired number of traffic.
Misc.
Why building a “cool” company matters
Kevin Kelly’s annual list of advice. Here are some samples:
Don’t ever work for someone you don’t want to become.
When you lead, your real job is to create more leaders, not more followers.
The biggest lie we tell ourselves is “I don’t need to write this down because I will remember it.”
Inside the multifaceted day-to-day of a social media manager
About this newsletter …
Hi, I’m Kevan, a marketing exec based in Boise, Idaho, who specializes in startup marketing and brand-building. I currently lead the marketing team at Oyster (we’re hiring!). I previously built brands at Buffer, Vox, and Polly. Each week, I share playbooks, case studies, stories, and links from inside the startup marketing world. Not yet subscribed? No worries. You can check out the archive, or sign up below:
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