This document discusses how to calculate the true costs and returns of nurture marketing programs for SaaS companies. It outlines common nurture campaigns, associated fixed and variable costs, and how to forecast returns. It recommends separating costs, choosing an attribution model to fairly assign revenue from multiple touchpoints, and calculating the break even point for customers needed to cover program costs based on average customer lifetime value. The goal is for nurture programs to break even or provide a positive return on investment.

1. Calculating the True Cost (and Return) of a Nurture Program
As the CMO or marketing manager of a SaaS company, it is your
responsibility to develop profitable marketing and sales programs.
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constantly changing. In this brief on calculating the true cost and return of a
nurture program, we will highlight common nurture programs, outline associated
costs, and present an approach to forecasting your return.
Common SaaS Nurture Campaigns
As the market matures, SaaS companies are becoming increasingly diverse. This
diversity makes it almost impossible to generalize what Software as a Service
encompasses, but there are a few marketing and sales oriented nurture campaigns
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1) Those designed to support a user post-purchase. Designed to increase:
ÏUser satisfaction
ÏNumber of accounts (seats)
ÏLifetime value (LTV)
2) Programs to help guide a user from a free trial to a paying subscription.
ÏProgress users into paying customers (subscriptions)
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ÏDemonstrate usability and interface
ÏPresent successful use cases
3) Nurture campaigns for SaaS products with a higher entry barrier (cost).
ÏDesigned to educate users as they work towards purchase.

3. Calculating
Your Cost
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For each of these campaigns, a common set of metrics helps calculate the true cost.
A comprehensive measurement will include the cost of employee time, tools used,
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it will help identify a break even point - how much revenue or how many leads a
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For SaaS companies, there is
generally an exponentially larger
Variable Costs Fixed Costs
return as the number of customers
generated from a single campaign
Employee time to
promote, support, and
increases. Most nurture path
track the campaign
campaigns include a higher amount
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Marketing Tool Costs
constant regardless of the number
(does the platform
use cost more for a
of users or customers generated),
broader reach?)
than variable costs.
Before you begin setting up a nurture path, you will want to understand where these
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campaigns, like sending pamphlets to potential customers, have high variables costs
(you have to pay for each pamphlet you want to send), while others have higher
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pay to use an email platform, but can then send as many emails as you like).
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accountable for the campaign.
Cost of assets
created for use in
the campaign
Accompanying
Promotion: ad spend,
email list purchase,
outreach, etc.
Forecasting costs and understanding your customer lifetime value allows you to
determine a break even point (how many customers your campaign must
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help outline how the price of your campaign will change as it touches more
audience members. Remember, it’s a learning process: once all is said and done,
you can go back and compare your forecast to your actual costs. The next time you
plan a campaign, you’ll have a better idea of how much it will cost.

5. Nurture Program Cost
Employee Salary
Asset Creation
Tool Cost
Common SaaS Nurture Campaigns
Marketing Spend
Once your campaign is up and rolling, what sort of return can you expect? Before this
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revenue to various marketing activities. Some companies give all of the credit for
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An Attribution Model can help show how multiple channels worked together in
converting a lead. What is an Attribution Model? It’s the practice of fairly dividing
expenses and revenue between a several campaigns. The idea is that, while a
nurture campaign may successfully develop a user into a paying customer, it is
probably not the only touch point they have with your brand.
Most of the time, it doesn’t make sense to give all of the credit to a single touch
point or campaign. ΖWLVPRUHOLNHOWKDWDFRPELQDWLRQRIH΍RUWVFDPHWRJHWKHUWR
convert a lead into a customer. A few popular attribution models that attempt to
split up the costs more fairly are:
Time decay - most recent interaction gets majority, and each
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Last interaction - all attribution (revenue) to last interaction
First interaction -DOODWWULEXWLRQUHYHQXH

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Even split - attribution (revenue) split between interactions
Total
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Forecast
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7. Choosing which model to use is a matter of preference, and usually depends on the
organization as a whole. We’re going to focus on the Last Interaction Attribution
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little maintenance costs (or variable costs). Once you have chosen an Attribution
Model, you can determine how much of your revenue can be credited to your
nurture path.
Understanding Your Return
Return on a Fixed Cost Program
Break Even Point
# of New Customers
Net Revenue
Cost of Program
Value of Users
The goal of any nurture (marketing) campaign is at minimum to break even -- but you
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B.E. Point = cost of nurture program ($) / average customer lifetime value ($)
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single nurture campaign in order to break even. If the number of new customers
exceeds your expectations for the campaign, you should take another look at your
costs and/or conversion expectations to ensure you generate a positive return.
Hopefully our brief on calculating the true cost (return) of a nurture program has
helped you analyze the planning and expectations of your campaigns.
By forecasting costs and revenue generated you can set expectations for return, and
adjust your nurture campaign to ensure you break even - at the least!