Marketing is more than a line item on your financial statements—it’s a strategic investment that directly influences cash flow, customer acquisition, and long-term growth. But determining how much to spend—and how to measure success can be complex. A strong brand foundation lowers your cost of acquisition and increases the effectiveness of future campaigns—especially in high-trust industries where decisions are slower and stakes are higher.
Before you can even begin to tie results to your bottom line, you need to know your numbers. What is the lifetime value of your customer? How much does it cost to acquire them? And then set some goals to determine how much you should spend. Feeling lost? We’ve outline some ways to get started with setting a budget and also provided some pointers on how to make sure your team and your plan work together.
Five Ways to Calculate Marketing Spend
Percentage of Revenue
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- Allocate a fixed percentage of gross (or projected revenue)
- A common range for established businesses is 5-10%
- Start-up budgets could require as much as 20% to establish brand awareness (and to pay for essentials such as brand id, website, and sales materials)
Historical Performance
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- Review what was spent last year and adjust based on the results
- Be careful not to miss opportunities or account for external factors your of your control (inflation, interest rates, customer confidence, unemployment, new tariffs, supply chain issues, new competitors, natural disasters or other factors specific to your industry)
Goals-Based
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- Need to know your cost per lead and cost to acquire a customer
- Decide how many new customers you need
- Set budget based on the quantity goal x cost per lead
Industry Benchmarking
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- Base your budget on what similar business in your industry are spending
- Need to be careful if that spend does not fit your budget
- It’s risky if you do not know the results of competitor initiatives / campaigns
Zero-Based Budgeting
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- Start from scratch each year and review every single line item of what was spent in the year prior
- Could bring savings, but might also create gaps in consistency and missed opportunities if there is not a dedicated person to keep things going
Measuring Results: Seeing it on the Bottom Line
Think in layers, not silos – Marketing outcomes are rarely the result of a single campaign. Success is layered: brand awareness, credibility, customer experience, and consistent messaging all stack over time.
A campaign might be the trigger—but brand trust is the reason someone acts. The strength of your brand going into a campaign directly impacts how hard your dollars will have to work. Weak brand? Higher ad spend needed. Strong brand? Smoother conversion.
Tie Performance Back to the Funnel
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- Did awareness increase?
- Did engagement and consideration improve? (Not every campaign has to hit the bottom of the funnel to bring value–but they should move people closer to it.)
- How many leads did you get? (Divide that by the total spend for a specific time period to get a cost-per-lead value.)
Assess your Overall Return on Investment (ROI)
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- How many new customers did you acquire and what is the lifetime value (LTV) of your customer on average? Multiply the new customers x the LTV to get an estimated value. Then divide that by what you spent. (Shoot for a 3x return as a starting point.)
- Note the amount of the investment that was put toward “brand-building campaigns”. These are expected to show lower ROI over the short-term, but contribute to the long-term growth of your company. Consider tracking this investment separately.
How Brand Equity (Trust) is Built
Brand equity acts like compound interest. The more consistent and strategic your branding efforts, the lower your cost per acquisition becomes over time. That’s why the most valuable brands often spend less proportionally on ads—they’ve already done the trust-building.
High-Trust Industries vs Impulse-Friendly Industries
- High-Trust (healthcare, finance)
- Impulse-Friendly (fashion, lifestyle, food)
Exposure Frequency
- According to marketing psychology (e.g., the “Rule of 7”), people need 7+ meaningful interactions before making a buying decision.
- With paid and organic media saturation, that could take weeks or several months, depending on your marketing intensity.
Social Proof & Word of Mouth
- Positive reviews, case studies, partnerships, and user-generated content can accelerate trust. Without these, trust-building takes longer—even with a high ad spend.
- Trust grows much faster through referrals (instant credibility transfer). This is why community-building and advocacy matter so much.
Brand Consistency
Trust builds when a brand shows up consistently with a clear voice, value, and experience across every channel. And it’s important to point out, brand consistency isn’t just for marketing—it’s also an internal operating system. It builds clarity, culture, and cohesion across the company.
How brand consistency fuel external growth:
- Consistent visuals, tone, and messaging help people instantly recognize your brand—online, in-store, or in conversation. Customers know what to expect.
- Make sure your graphic design team is following brand guidelines.
- It increases word of mouth and builds trust faster. People remember and talk about brands that are clear and consistent.
- With brand guidelines in place, it’s easier to delegate marketing efforts (agencies, freelancers, partners) without losing integrity.
Here’s how brand consistency strengthens the inside of a business:
- Brand consistency keeps your “why” front and center—helping everyone stay grounded in what the business stands for.
- When employees feel connected to a clear and consistent brand, they’re more likely to believe in it and represent it well. It boosts employee confidence and engagement.
- When you have brand guidelines, it speeds up decision making (faster approvals, less second-guessing)
- A well-documented brand (voice, visuals, tone, purpose) makes it easier for vendors and new team members to hit the ground running.
Efficient Use of Budget
- Seasonal Use of Budget – Concentrate spend during high-opportunity times (holidays, trade shows, product launches, etc.).
- Channel Prioritization – Invest more in high-performing channels (email, PPC, SEO) and pause or reduce spend on underperforming ones. Make sure your website is up to date.
- Content Repurposing – Stretch creative assets by reusing blog posts, videos, or webinars across multiple formats and platforms.
- Partnership or Co-Branded Campaigns – Share costs and gain exposure by collaborating with complementary businesses.
- Build Organic Traffic (SEO) – Align content calendars with paid pushes so organic reach can amplify ROI without additional spend.
- Geo-Target Campaigns Based on Demand – Focus on specific regions or territories where demand is higher, rather than going broad.
How do you Keep Marketing Cash Flow Positive?
Your team plays a critical role in keeping your marketing efforts cash flow positive.To keep your team and the marketing cash-flow positive, businesses must set clear KPIs, balance short- and long-term efforts, monitor performance regularly, and maintain consistency—especially during growth phases.
Optimize Your Marketing (and Sales) Team
Use talent (hire or outsource) that can align the marketing with business goals. They should know how to prioritize high-impact activities and eliminate waste on low-ROI tasks.
- Provide a way for the sales team to give real-time feedback on lead quality, objections, and messaging effectiveness to the marketing team.
- Set clear key performance indicators (KPIs) aligned with your financial goals
- Use marketing dashboards to compile data (vs manually compiling)
- Budget for short-term and long-term wins separately (and monitor separately)
- Monitor and adjust monthly
- Use retainers to maintain consistency
Things to avoid:
- Spending time on creating content that generates “noise”, “likes” and “views” but not actual leads
- Diluting your limited budget trying to do too many things at once
- Reporting on surface-level data without connecting to business outcomes
- Going through too many rounds of revisions (over-designing) as it can eat up a ton of time without moving the needle. Design is important, but perfectionism without purpose burns budget fast.=
- Spending time on platforms that aren’t relevant to your target audience
- Following a “to-do” list without the list being tied to a strategy
Summary
A strong brand foundation lowers your cost of acquisition and increases the effectiveness of future campaigns—especially in high-trust industries where decisions are slower and stakes are higher. To effectively optimize your overall marketing budget, it means consistent review, A/B testing and adjustment of the budget toward performance. And finally, collaboration of the sales and marketing teams allows both to discuss efforts that convert—not just what looks good on paper—making it easier to double down on what works.