I am seeking some insight about Salesforce : CRM , I really love their consistent 20-25% revenue growth, however I do not understand their huge Marketing and Administrative costs. Their S&A costs keep going up as much as their revenue. I have come across this argument that they are reinvesting in their business like Amazon, but I would point out that most of Amazon's reinvestment is in R&D, not sales and marketing. When I compare it to other SaaS or IaaS businesses which keep growing without much marketing, I cannot understand this huge marketing expenditure. Everyone in business today already knows how good Salesforce is, so why spend so much incrementally on marketing. My question basically comes down to this, that is their a point in the future where –
a) Marketing spend slows and the revenue continues to grow, maybe at a slightly slower rate and operating margins improve.
b) Marketing spend goes down and altho revenue growth slows operating margins grow significantly.
Are current revenues sustainable if this huge marketing spend is eliminated, can existing customers be retained without/low marketing spend? Or does the business inherently require higher spend in marketing to sustain it?
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