How to set a marketing budget from your own numbers

The four numbers you need

1. Average job value. Total revenue from the type of job you want more of, divided by the number of those jobs. Use the last six to twelve months and look at one job type at a time; a $300 repair and a $9,000 replacement shouldn't be averaged together.
2. Gross margin. What's left of each job after materials, direct labour and subcontractors, as a percentage of the job value. If a $2,000 job costs you $1,100 in materials and labour, your gross margin is 45%.
3. Close rate. Of the leads that turn into a quote or estimate, how many become paid jobs. Count it per job type and per lead source if you can.
4. Cost per lead. What you spend on a channel divided by the leads it produced. For a new channel, use an estimate and correct it after a month or two.

The formulas

Three short formulas do most of the work:

• Gross profit per job = average job value × gross margin
• Marketing cost per booked job = cost per lead ÷ close rate
• Monthly budget = jobs wanted per month ÷ close rate × cost per lead

Then compare marketing cost per booked job with gross profit per job. Many owners aim to keep marketing below a quarter or a third of gross profit on a new customer, and accept a higher share where repeat work or referrals follow. That threshold is a judgement call for your business, not a rule.

Three worked examples

These numbers are illustrative only, chosen to make the maths easy to follow. They are not benchmarks for any trade.

A painting contractor

• Average exterior job: $4,500, gross margin 40%, so gross profit per job is $1,800.
• Close rate on quotes: 30%. Cost per lead from seasonal ads: $70.
• Marketing cost per booked job: $70 ÷ 0.30 = $233.
• That is about 13% of gross profit. Healthy.
• To book 10 extra exterior jobs in May: 10 ÷ 0.30 ≈ 34 leads × $70 ≈ $2,380 in ad spend.

A plumbing company

• Average service call: $450, gross margin 55%, so gross profit per job is about $248.
• Close rate on calls: 70%. Cost per lead from search ads: $45.
• Marketing cost per booked job: $45 ÷ 0.70 ≈ $64, about 26% of gross profit.
• Workable, but tight on a single visit. The real value appears when 1 call in 10 becomes a $3,500 water heater or repiping job, and when a good first visit turns into a customer who calls again for years.

A roofing company

• Average replacement: $14,000, gross margin 35%, so gross profit per job is $4,900.
• Close rate on inspections: 25%. Cost per lead: $180.
• Marketing cost per booked job: $180 ÷ 0.25 = $720, about 15% of gross profit.
• To book 6 extra replacements a month: 6 ÷ 0.25 = 24 leads × $180 = $4,320 in ad spend.

The roofer pays the most per lead, yet has a comfortable ratio because each job is large. The plumber pays the least per lead but has the tightest ratio on a single visit. Cheap leads are not automatically good leads.

Where the money really leaks

In practice, the biggest gains in a trades marketing budget rarely come from finding cheaper clicks. They come from fixing what happens after the phone rings.

Missed calls. If a third of calls go to voicemail during working hours, your real cost per answered lead is 50% higher than you think. A text-back service or a better call schedule can change the whole budget.

Slow quotes. A quote sent four days later competes with three companies that quoted the same day. Every point of close rate you lose raises your cost per booked job.

No follow-up. Many quotes are lost simply because nobody called back. A single follow-up call or text a few days after quoting is often the cheapest marketing a business can do.

Wrong jobs. Marketing your lowest-value service because it's the easiest to sell keeps the trucks busy without growing profit. Point budget at the jobs with the highest gross profit you can handle.

Here's how much a close-rate change matters. In the painting example, raising the close rate from 30% to 40% cuts marketing cost per booked job from $233 to $175 and reduces the leads needed for 10 jobs from about 34 to 25. Nothing changed in the ads.

Capacity: the number most budgets ignore

Before you raise spending, check how many extra jobs you can actually do. If your crews are booked three weeks out, more leads will lengthen the wait and lower your close rate. In that case, the better move is often to raise prices slightly, shift spend toward higher-value work, or hire before you advertise more.

Seasonality matters too. Spending evenly across the year makes little sense for a landscaper or a roofer. Our seasonal marketing calendar shows when to push and when to pull back.

Putting a budget together

1. Pick one job type to grow and gather its four numbers.
2. Work out gross profit per job and decide the share you're willing to spend to win a new customer.
3. Calculate the maximum cost per lead you can afford: gross profit per job × that share × close rate.
4. Set a monthly target in jobs, checked against capacity.
5. Calculate ad spend with the monthly budget formula, and add management fees separately. Our plans are on the pricing page.
6. Review after 60 days, using real cost-per-lead and close-rate numbers.

For step 3, the painter above, willing to spend a quarter of gross profit, could afford up to $1,800 × 0.25 × 0.30 = $135 per lead. At $70, there is plenty of room.

Need help pulling your numbers together? The services overview explains where budget usually goes first, and you can call, text or email to talk it through. The trade-by-trade playbook shows which channel each trade usually funds first.