How much should I spend on marketing?
Marketing budget should be set from your growth target and current funnel efficiency, then sanity-checked against industry benchmarks — not picked as an arbitrary percentage of revenue.
Use the framework below to calculate a defensible number.
Work backward from your growth target: how many new customers you need, your current cost-per-customer, and your funnel conversion rates together determine the required budget. Industry benchmarks (typically 5-15% of revenue for established businesses, higher for early-stage growth) are a sanity check, not the starting point.
- Start from your growth target, not an industry average percentage
- Established B2B businesses often spend 5-10% of revenue on marketing
- Early-stage or high-growth businesses often spend well above 15%
- Your current cost-per-customer should directly inform the budget math
Why this question is hard to answer well
Three reasons budget-setting often goes wrong.
Industry average percentages ignore your specific growth target, current funnel efficiency, and competitive intensity.
A budget that's either too conservative to hit growth targets or wastefully large.
Budgets set without working backward from customer acquisition targets are essentially guesses.
No way to know if the budget is actually sufficient for the goal.
The same growth target requires very different budgets depending on your current conversion rates and cost-per-lead.
A budget that doesn't account for your actual starting efficiency.
Signs your current budget-setting approach needs work
Check the ones that sound like your business.
How to set your budget
Work through these in order.
Decision framework
Answer in order to refine your number.
Use it directly in the budget calculation.
Calculate it first — the budget math doesn't work without it.
Budget as a higher percentage of revenue, likely above typical benchmarks, to fund the acceleration.
A budget closer to typical industry benchmarks is likely sufficient.
Good — this protects against over-reliance on current channel performance.
Consider building in a small testing allocation even if it means a slightly lower core budget.
Common mistakes
Most budget-setting mistakes repeat one of these.
A percentage untethered to growth targets and funnel efficiency is essentially arbitrary.
A budget that may be significantly too high or too low for the actual goal.
Work backward from growth targets and cost-per-customer instead.
A budget set for last year's target won't necessarily fund this year's more aggressive goal.
A growth target the current budget was never sized to achieve.
Re-run the budget calculation whenever growth targets change.
A fully-allocated budget with no testing buffer locks you into whatever's currently working, even as it saturates.
No path to diversify before a primary channel's performance declines.
Reserve a small percentage specifically for testing new channels.
Real business example
Illustrative exampleA composite, illustrative walkthrough — not a specific named customer.
A B2B services company set its marketing budget as a flat 8% of revenue every year, regardless of growth targets.
This year's growth target required roughly double the new customers of the prior year, but the budget hadn't changed proportionally.
Recalculated the budget from the actual customer target and known cost-per-customer, revealing the flat percentage was underfunding the goal by a significant margin.
Presented the model to leadership with the specific gap quantified, leading to a mid-year budget adjustment.
The revised budget was directly tied to the growth target, making both the ask and the expected outcome easier to defend internally.
AI recommendations
These tools apply directly to the framework above.
Frequently asked questions
Not sure what your marketing budget should be?
Ask Elevo about your growth target and current metrics for a tailored budget recommendation.
Ready to calculate your budget?
Get a defensible number tied to your actual growth target.