How Much Should Contractors Spend on Marketing?
It’s one of the most common questions contractors ask—and one of the least useful without context.
“5–10% of revenue” gets thrown around like it’s gospel. But that number means nothing if you don’t know what you’re trying to grow, what your existing base is already delivering, or how aggressive your timeline is.
If you’re trying to hit a number, you don’t budget based on rules of thumb.
You build a forecast.
In this article, we’re going to show you how to do exactly that:
How to reverse-engineer your marketing budget from your revenue goal
What % makes sense at different stages
And why the right number varies based on your foundation, your ambition, and how your data is segmented
We’ll walk through three real-world examples from three different business stages—and show you the exact math behind each.
But before we get into the numbers, there’s one critical detail that changes everything…
Table of Contents
A Quick Note on the Numbers
Before we dive into the examples, here’s one thing that matters more than the ROAS itself: how it’s calculated.
Every number you’ll see below reflects clean, segmented data:
New vs. existing customers
Database vs. prospecting audiences
Brand vs. non-brand campaigns
When we build game plans, we always start by isolating existing customer revenue—because blended ROAS hides the truth. We want to know what revenue would likely show up with $0 spend, so we can calculate how much heavy lifting needs to be done by new customer acquisition.
To get numbers this accurate, you need:
A well-configured ServiceTitan setup with clear campaign and category structure (brand vs. non-brand, prospecting vs. remarketing)
Revenue attribution that distinguishes new vs. existing customers—this is the default in ServiceTitan unless you’ve recently migrated data
And yes—some pivot table skills to pull it all together
If your system was recently imported, ask your ServiceTitan CSM to help add created dates. If your agency doesn’t currently split out brand vs. non-brand or prospecting vs. remarketing, ask them to jump in and split out.
You won’t be able to retroactively segment perfectly—but you can start tracking forward with clarity.
And that clarity is everything. This extra layer of segmentation is what makes a marketing budget real—not theoretical.
So how much should contractors spend on marketing if their goal is growthânot guesswork?
Case Study 1: The 10-Year Growth Push (10% Budget, 25% AGR)
This contractor has been in the game for a decade. Last year, they generated $16M in total revenue, with $5M from repeat customers. They want to push to $20M this year—a 25% growth goal. That means they’ll need to generate $15M in new revenue, and the budget must do some real work to get there.
| Metric | Amount |
|---|---|
| Prior Year Revenue | $16,000,000 |
| This Year Goal | $20,000,000 |
| Prior Year Existing Customers | $5,000,000 |
| New Revenue Needed | $15,000,000 |
| AGR Goal | 25.00% |
| Channel | Spend | ROAS | Revenue |
|---|---|---|---|
| Paid Search | $1,000,000 | 4.0 | $4,000,000 |
| Paid Social | $360,000 | 6.0 | $2,160,000 |
| Paid Listings | $360,000 | 8.0 | $2,880,000 |
| $120,000 | 3.0 | $360,000 | |
| $180,000 | 4.0 | $720,000 | |
| Branding/Web | $36,000 | 138.89 | $5,000,000 |
| Total | $2,056,000 | 7.35 | $15,120,000 |
| New + Existing Revenue | $20,120,000 |
|---|---|
| Marketing Budget % | 10.22% |
â ď¸ That $5M from web didn’t show up overnight. This business has been steadily investing in SEO, UX, and conversion-focused web content. They’re reaping what they’ve been compounding.
Case Study 2: The 50-Year Compounding Machine (4% Budget, 56% AGR)
This isn’t their first rodeo. With $32M in prior-year revenue and $25M of that from returning customers, they have a strong foundation. But they’re not content to coast—they’re targeting $50M. Thanks to their long-term investment in brand equity and conversion systems, they can do it efficiently.
| Metric | Amount |
|---|---|
| Prior Year Revenue | $32,000,000 |
| This Year Goal | $50,000,000 |
| Prior Year Existing Customers | $25,000,000 |
| New Revenue Needed | $25,000,000 |
| AGR Goal | 56.25% |
| Channel | Spend | ROAS | Revenue |
|---|---|---|---|
| Paid Search | $1,000,000 | 4.0 | $4,000,000 |
| Paid Social | $360,000 | 6.0 | $2,160,000 |
| Paid Listings | $360,000 | 8.0 | $2,880,000 |
| $120,000 | 3.0 | $360,000 | |
| $180,000 | 4.0 | $720,000 | |
| Branding/Web | $36,000 | 416.67 | $15,000,000 |
| Total | $2,056,000 | 12.22 | $25,120,000 |
| New + Existing Revenue | $50,120,000 |
|---|---|
| Marketing Budget % | 4.10% |
đ§ The low percentage here isn’t luck—it’s legacy. They’ve built the machine. Now it prints.
Case Study 3: The Brand-New Builder (22% Budget, First-Year Ramp)
No past customers. No SEO tailwind. Just ambition. This founder is aiming for $5M in their first year. And they know that to get there, they’ll have to spend boldly—because when you start from zero, your dollars are buying momentum, not margin.
| Metric | Amount |
|---|---|
| Prior Year Revenue | $0 |
| This Year Goal | $5,000,000 |
| Prior Year Existing Customers | $0 |
| New Revenue Needed | $5,000,000 |
| AGR Goal | — |
| Channel | Spend | ROAS | Revenue |
|---|---|---|---|
| Paid Search | $180,000 | 3.0 | $540,000 |
| Paid Social | $240,000 | 5.0 | $1,200,000 |
| Paid Listings | $360,000 | 6.0 | $2,160,000 |
| $60,000 | 3.0 | $180,000 | |
| $180,000 | 4.0 | $720,000 | |
| Branding/Web | $36,000 | 4.17 | $150,000 |
| Total | $1,056,000 | 4.69 | $4,950,000 |
| New + Existing Revenue | $4,950,000 |
|---|---|
| Marketing Budget % | 21.33% |
â ď¸ This is the sacrifice play. Not for the faint of heart—but if you want to compress time, this is what it looks like.
How to Calculate Your Marketing Budget
Let’s be clear:
The point of this article isn’t to say “if you’re 5 years in, spend 10%” or “if you’re 50, spend 4%.â or even for you to round up or down. Thatâs not how this worksâand honestly, thatâs not how growth works either.
This isn’t a formula you copy. It’s a framework you apply.
Your marketing budget should reflect three things:
Your goal (what youâre actually trying to hit),
Your foundation (whatâs already there without paid lift), and
Your aggression level (how fast you want to get there).
Those numbers look wildly different for a contractor going from $2M to $3M than they do for someone trying to scale from $30M to $50M.
So if you’re reading this to find “the number”—don’t. Do the math instead.
Here’s a simplified version of how we calculate budgets for our clients. You can use this as a guide, or plug your own numbers into the free template we created.
The Bottom Line
You’ve seen the math. You’ve seen how drastically the right number can vary.
So no—there isn’t a universal marketing budget percentage that works for everyone.
And yesâthatâs the entire point.
If you’re still chasing a “right answer,” you’re asking the wrong question.
The only right number is the one that reflects your goals, your starting point, and your pace.
Now you’ve got a framework. You’ve got examples.
All thatâs left is to run your numbersâand build accordingly.
But if you want a coach—not just a calculator—
đ Let’s Build Your Game Plan Together
