How much should you spend on marketing if your business does €X/month
The "allocate 10% of revenue" formula is a myth repeated by agencies that don't want to talk about ROI. The right budget doesn't come from a percentage — it comes from customer acquisition cost and margin per transaction.
Most articles about marketing budget start with percentages. 5%, 10%, 15% of revenue. Sounds tidy, but it's wrong at the root: a business with a 12% margin and one with a 60% margin end up with entirely different real allocations at the same percentage.
The right budget is calculated in reverse: start from customer value (LTV — how much an average client spends over the relationship), subtract direct costs. What's left is the maximum you can afford to pay to acquire a new customer (CAC — cost per acquisition).
If a client generates €1,500 net profit over the relationship and you pay €300 to acquire them, that's a 5:1 ratio. Healthy. Pay €900 and you're in the 1.6:1 zone — you survive but don't scale. Below 1:1, you burn cash.
So the question isn't "how much do I spend" but "how many customers do I want to acquire this month and how much does one cost me". Budget is the output, not the input.
In practice: a B2C business with a €150 average transaction and frequency of 3/year has an LTV around €450. At 40% margin, you can realistically spend €60–90 per new customer. Multiplied by 30 target customers/month, budget lands at €1,800–2,700. Not 10% of anything.
What changes when you calculate this way: you stop treating monthly marketing spend as a fixed cost and start treating it as an investment with measurable ROI. Deciding to raise or lower budget becomes math, not emotion.