MARKETING · 5 min read · Stpeternwok Inc.

"How much should we spend on marketing?" is one of the most common questions business owners ask — and one of the least helpfully answered, usually with a generic percentage pulled from nowhere. Here's a more useful way to think about it.

Why a Flat Percentage Rule Falls Short

You'll often hear advice like "spend 7-8% of revenue on marketing." It's a reasonable general benchmark many businesses use as a starting reference point — but it ignores your actual goals. A brand-new business trying to get its first customers needs a very different approach than an established business trying to maintain steady, predictable growth.

A Better Way to Think About It: Start From the Goal

  • If you're starting from zero: You're paying to build awareness and prove your offer works. Budgets here are often higher relative to current revenue, because there isn't much revenue yet to measure against.
  • If you're growing steadily: You likely already know your numbers — what a customer is worth, and what it costs to acquire one. Budget becomes a function of how many new customers you want, multiplied by that cost.
  • If you're maintaining and optimizing: Spend tends to stabilize, with more budget shifting toward retention and repeat business rather than pure acquisition.

The Numbers That Actually Matter

Instead of starting with "how much should we spend," it's more useful to know two numbers first: how much a new customer is worth to your business over time, and how much it currently costs to acquire one. Once you know both, a marketing budget stops being a guess and becomes simple math — spend whatever it takes to acquire customers profitably, then scale that spend as far as it keeps working.

What This Means in Practice

Early on, it's normal to spend more learning what works than you'll spend later, once you know your numbers. The goal in the first few months isn't necessarily efficiency — it's clarity. Once you understand what a customer is worth and what it costs to win one, budgeting becomes far less stressful and far more confident.

If you don't yet know those two numbers for your business, that's usually the most valuable starting point before any budget conversation.