Budget from the growth target, not a percentage
Most marketing budgets are set as a round percentage of revenue with no other logic behind them. A defensible budget starts from your growth target and works backward to the number required to hit it.
What is it?
Marketing budgeting is the process of allocating spend across channels and activities in a way that's tied to a specific growth target, rather than an arbitrary percentage of revenue picked out of habit.
Done well, it connects a customer acquisition goal to a required spend level via your known cost-per-customer — making the budget a calculation, not a guess.
Why it matters
Ties spend to an actual outcome
The budget becomes defensible because it's derived from a goal.
Prevents both under- and over-funding
A round percentage can miss the real number in either direction.
Makes trade-offs visible
You can see exactly what a bigger or smaller budget buys.
Gives finance a number they can evaluate
A calculated budget is easier to approve than a felt one.
How it works
Work backward from the growth target to the required budget.
Typical spend by stage
| % of revenue (typical) | |
|---|---|
| Early-stage / high-growth | 15-25%+ |
| Established B2B | 5-10% |
| Mature, stable growth | 3-6% |
Best practices
Work backward from how many customers you need.
Salaries and tooling belong in the budget, not just media spend.
A fully-committed budget with no room to test new channels stagnates.
A budget sized for last year's goal won't fund this year's more aggressive one.
Common mistakes
Most budgeting mistakes repeat one of these.
A percentage untethered to a growth target and known unit economics is essentially arbitrary.
A budget that may be significantly too high or too low for the actual goal.
Calculate from growth target and cost-per-customer instead.
Media-only budgets understate the true cost of the marketing function.
An inaccurate picture of total investment and true ROI.
Use a fully-loaded number including team cost.
A fully-allocated budget locks in 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.
KPIs & success metrics
How to know the budget is sized correctly.
Whether spend is actually sufficient for the stated growth goal.
How actual cost-per-customer compares to the planning assumption.
Share of budget reserved for new channel experiments.
Whether the same budget is producing more or fewer results over time.
Frequently asked questions
Ready to calculate your budget?
Get a defensible number tied to your actual growth target.