Pay After Marketing | Performance Marketing Agency

How Much Should You Spend on Marketing?

Your marketing budget shouldn't be based on an arbitrary percentage of revenue. Use your customer economics and growth goals to estimate what you can reasonably afford to spend acquiring new customers.

YOUR RESULTS

Leads Needed Per Month10025 customers ÷ 25% close rate

Marketing Budget Required$5,000 / month100 leads × $50.00 blended CPL

Projected CAC$200.00$5,000 ÷ 25 customers

Break-Even Gross Margin26.7%$5,000 ÷ $18,750 revenue

Break-Even CAC$300.00

Break-Even CPL$75.00

Approximate CPL at which estimated marketing spend equals gross profit generated.

Revenue & Profitability Breakdown

Potential New Revenue$18,750.0025 customers × $750.00

Gross Profit Before Marketing Expense$7,500.00$18,750.00 × 40% gross margin

Minus: Marketing Budget Required−$5,000.00100 leads × $50.00 blended CPL

Contribution After Marketing+$2,500.00$7,500.00 − $5,000.00

These numbers can work.

Based on the numbers you entered, the estimated gross profit generated by these customers is greater than the marketing spend required to acquire them.

Gross Profit Before Marketing: $7,500.00

Marketing Budget Required: $5,000.00

Contribution After Marketing: +$2,500.00

Break-Even Gross Margin: 26.7%

This does not include overhead or other operating expenses.

Want Help Hitting These Numbers?

Marketing spend may include advertising, SEO, referral programs, agencies, content, direct mail, and other customer acquisition costs. This calculator estimates the economics of acquiring customers based on the numbers you provide. Contribution After Marketing does not include overhead or other operating expenses.