January 27, 2025 • 30 mins
Tired of guessing your marketing budget? Wondering if 5%, 10%, or 20% is the “right” number?
This week on the Maven Marketing Podcast, Brandon and Caleb break down two proven ways to calculate your budget—without wasting a dollar. You’ll learn how to align your spend with your revenue goals and how to work backward from your customer acquisition needs.
Plus:
- Marketing budget benchmarks by industry
- What percentage you really need to grow vs. maintain
- Why your strategy, value prop, and operations matter more than any ad
This is your no-BS guide to building a smarter, leaner, growth-ready budget.
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Host: Brandon Welch
Co-Host: Caleb Agee
Executive Producer: Carter Breaux
Audio/Video Producer: Nate the Camera Guy
Do you have a marketing problem you'd like us to help solve? Send it to MavenMonday@FrankandMaven.com!
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Brandon Welch (00:00):
These are all based on the assumptions that
you have a solid strategy, youhave a really good value
proposition, you have goodculture, you have a consistent
way of delivering your product,because any one of those things
could completely delete theefforts of your marketing.
Welcome to the Maven MarketingPodcast.
(00:20):
Today is Maven Monday.
I am your host, brandon Welch,and I'm here with Caleb Bicycle
Kick.
Agee Bicycle Kick he's got somebicycle kicks coming up in his
future.
No, I do not, he's gonesemi-pro in the football arenas.
Caleb Agee (00:34):
Yeah, that's the everywhere else football soccer.
I've been dabbling a little bitand semi-pro is generous.
I play at the local men'sindoor league, soon to be Caleb
ACL AG Caleb walks with a limpAgee.
Brandon Welch (00:54):
Hey, this is the place where we answer your real
life, marketing and soccerquestions, so you can eliminate
waste and advertising, grow yourbusiness and achieve the big
dream.
How's the big dream going for2025?
How's it treating you?
We'd love to know.
Caleb Agee (01:08):
Drop a comment in there.
Brandon Welch (01:09):
Yeah, First person to send us a comment or
just an email to mavenmonday@frankandmaven.
com with one important businessgoal for 2025,.
We're going to send you a hardcopy, hard back copy, hard copy.
Caleb Agee (01:23):
It's a hard back copy Of the Maven Mark back Hard
Copy Hard copy.
Brandon Welch (01:25):
It's a hard back copy hard cover Of the Maven
Marketer yeah, signed by theauthor.
What a treat, what a guy.
Caleb Agee (01:32):
What a guy.
Brandon Welch (01:34):
Hey, today burning question and we've
answered it in a roundabout waylots of times there's a great
episode from a few weeks backthat talks about three campaigns
that are killing it and why wejust broke them down like all
the components of the actualmarketing budgets.
Caleb Agee (01:49):
How much they're actually spending on everything.
Brandon Welch (01:51):
Hey, but we learned that YouTube is
underserved and we're playing alittle SEO game on y'all right
now.
Yeah, when people fire up thesearch, how much should my
marketing budget be?
And so why don't we just answerthe dadgum question?
Caleb Agee (02:03):
Yeah're just giving it to you straight today yes
short episode powerful episode,yeah here we go, here we go so
we're going to talk about twoapproaches to determining your
marketing budget um.
The first one, I think, isprobably more commonplace, and
it usually starts with um somesort of big goal Like right, you
(02:25):
set your annual revenue goalfor the year 84 million.
We're going to get to 15 millionthis year.
And then we usually look atmarketing as maybe a percent of
the whole right and that hasbenefits because you have maybe
fixed costs, assuming you hityour top line goal, you have
maybe a fixed cost or inside ofyour budget and your
(02:45):
profitability should be expectedbecause you've set that up.
And so we want to talk aboutthat approach first and say that
is valid, there's a way to dothat.
Get you close.
Get you close to what youshould do.
Brandon Welch (02:59):
So we're going to widen that and just give you
some extra things to think about, because we're all about
principles here, not hard, fastrules.
Caleb Agee (03:05):
Yeah this is the thing about talking about
budgets.
It's a really dangerous topicto cover because somebody could
take us very literally and thereality is not the same for any
business.
Brandon Welch (03:16):
Or any market, any market, your competitive
landscape, industries, yeah.
Caleb Agee (03:20):
There are so many factors to do this, so we're
paying with a big brush rightnow, but we're going to do our
best to help you out, but justto get you in the neighborhood,
all right.
So revenue-based approach.
Brandon Welch (03:31):
Yeah, part one revenue-based approach.
So you know what your businessdid top-line revenue last year
and most service businessesfollow kind of a certain gross
profit model.
Most service businesses we workwith are going to have a net
20% to 30% gross margin.
Sorry, I said net, I meantgross 20% to 30% margin, meaning
(03:51):
your cost of goods sold is thatinverse 60% to 70%, and then
your overhead is going to kindof come out of that last 20% to
30%.
And there are we have a tablewe're going to share here in
just a second, just of some fromvarious sources, various
industry sources across theinternet, what you might
consider for your industry.
But it's just generallyexpressed as if I made a million
(04:15):
dollars, how much should I putin marketing next year?
Or, sorry, if my top linerevenue was a million bucks, how
much should I put in marketing?
Right, yep, so that's going tobe expressed as a percentage.
You can look to any of yourindustry trades, your blogs or
Reddit channels or just anyamount of water cooler talk to
kind of get an idea what peoplein your space are doing.
(04:36):
I would encourage you to lookin similar size markets and, if
you can, with similarcompetitive landscapes.
This gets the reason thisparticular method gets a little
bit limited is because if youhave a really strong competitor
or an established competitor inyour market that has a really
(04:57):
large share of voice and I wouldsay anything bigger than a 15%
to 20% market share it's goingto be really hard to take that
competitor down.
Yeah than a 15 to 20% marketshare it's going to be really
hard to take that competitordown.
Yeah, so long as they're, youknow, not just screwing it up
and taking people's money androbbing them blind or something.
So, um, and, and that, in thatcase, all the numbers we're
about to talk, talk about youwould be on the high end of.
Similarly, uh, there are somecompetitors that are just lazy
(05:22):
and they're just waiting to bepicked off, and Some competitors
that are just lazy and they'rejust waiting to be picked off,
or markets that are justunderserved.
Caleb Agee (05:26):
There's nobody, no gorilla, in that market.
And you want to be the gorilla?
Might not be that hard, yeah,and that's the beautiful thing
to be able to show up and dothat.
Brandon Welch (05:37):
I will say this marketing can only do one thing
and that's make what was goingto happen anyway.
happen a little faster.
Yeah, so if you are ripe fordisruption, if your industry is
ripe for disruption, andsomebody comes along and
disrupts you, their marketingwill make it happen faster, but
it was going to happen anyway,right?
(05:57):
So these are all based on theassumptions that you have a
solid strategy, you have areally good value proposition,
you have good culture, you havea consistent way of delivering
your product, because any one ofthose things could completely
delete the efforts of yourmarketing.
Caleb Agee (06:14):
And we're giving this a lot of nuance up at the
top.
But we also say advertising isthe I think Roy Williams quoted
for this.
Advertising is the tax forbeing unremarkable.
Brandon Welch (06:24):
Yeah it's the tax we pay for being unremarkable.
Caleb Agee (06:26):
And there are some businesses that are, in their
own right, extremely remarkableand you'll see them pop up on
social medias or they'll havethese really viral campaigns and
they spend next to nothing.
And so these percentages forthat kind of business I was
talking to a business that's 20years old and they're not used
to spending more than you knowthree, four, 5% on marketing
(06:49):
because they've taken it instride, but they've also been
remarkable.
Brandon Welch (06:52):
Yes, basspro comes to mind.
Caleb Agee (06:55):
Yeah.
Brandon Welch (06:56):
Apple comes to mind.
A lot of that money they wouldhave put into marketing.
They instead put it into thecustomer experience and the
vision of the outcome theycreate and it just it snowballed
into something bigger thanmarketing could ever have done
for them.
Marketing just makes it happenfaster.
Some industry benchmarks formarketing budget percentages
(07:17):
You're in range, probably ifyou're in these industries.
Caleb Agee (07:19):
Okay, if you're in banking or finance, this source
says 9.49%, 9.49.
Brandon Welch (07:25):
Not to be confused with 9.5.
You're in banking and finance.
This source says 9.49%, 9.49%.
Caleb Agee (07:27):
Yeah, because you're in banking and finance, so you
had to get it right.
Brandon Welch (07:30):
Communications and media.
I think maybe you're ad agency,maybe you're running a social
media agency or something likethat.
15%, well, sorry, 14.27%, let'skeep on the decimal trend
Consumer packaged goods 25.19%.
Consumer services 11.74% yeah.
Caleb Agee (07:49):
Education 11.5%.
Brandon Welch (07:51):
Colleges spend a lot of money.
Yes, Energy utilities, thingsthat we don't need.
You only have to spend 3.8% onthat.
Yeah, and it's probably just tomake your people complain less.
Caleb Agee (08:04):
Yeah, it's probably more in the PR type of
department.
Yeah, healthcare 6.8%.
Brandon Welch (08:10):
That's a big category.
Healthcare could be eye doctorsall the way down to heart
surgeons.
Caleb Agee (08:14):
A hospital, 6% of their budget or of their top
line is way different than aprivate practice.
Brandon Welch (08:19):
Absolutely Manufacturing 3.75%.
Caleb Agee (08:24):
I love how they group these mining and
construction Um 6.5%.
Brandon Welch (08:28):
We don't have a lot of railroads, yeah, mining
and construction Wow, I'd haveto think about that one.
Uh, pharmaceuticals and biotech12.83%.
Caleb Agee (08:38):
Uh professional services 7.08%.
Brandon Welch (08:41):
Real estate 10.61%.
Caleb Agee (08:44):
Retail wholesale 14.08% Real estate 10.61% Retail
wholesale 14.52% yeah so Alittle higher.
Brandon Welch (08:51):
Yeah, just think the luxury goods and stuff.
Actually we have two retailcustomers and I'm thinking their
budgets are literally in that13% to 15% right now like
higher-end retail.
Yeah, service consulting uh-ohFranken and Maven 21%.
Are we spending 21%?
I don't think so.
You consulting Uh-oh,franken-maven 21%.
Are we spending 21%?
Caleb Agee (09:07):
I don't think so.
You know what we are spendingDepends on what we define as our
advertising budget.
Brandon Welch (09:10):
A lot of well, this is our advertising budget.
Caleb Agee (09:12):
This is our.
That's what I'm saying.
Brandon Welch (09:13):
And we invest a lot to make this happen for
y'all we really do.
You think, nate the Camera Guysgrow on trees Free, right for
the plucking.
Tech and software platforms11.8%.
Caleb Agee (09:26):
And transportation 1.52%.
Brandon Welch (09:29):
Yeah, so those are going to largely correlate,
I think, to the marginsavailable in those categories,
and so I would say, justpersonal experience, what I've
worked with the most areowner-operated companies that
have that 30-ish percent grossmargin, are owner-operated
companies that have that 30-ishpercent gross margin.
And just an off-the-cuff thingthat we offer is, if you're
(09:54):
trying to maintain what you haveand not really grow it faster
than it's growing, but justprotect yourself from market
share leak to other newcompetitors or whatever.
5% to 8% If you truly want togrow faster than the trend and
faster than you would have grown.
8% to 12%, and we have somethat surge to 15% to 20% if
they're wanting to grow evenfaster than that.
Caleb Agee (10:13):
Yeah.
Brandon Welch (10:13):
Namely companies that don't need to have, don't
need to pull a lot out of thatgross margin margins.
So I have some owner operatorsthat this is not their main
source of income and or theydon't need the income at this
time, so they'll, they'll.
They want to get it up to that.
You know, five, 10 millionrange a lot faster.
So they will go ahead and justfull well knowing it's not a
(10:37):
sustainable forever plan, butthey will launch over some of
their competitors by juststealing share voice and being
really aggressive in theirmarket.
So I would say the takeaway fromany of these is I don't think
anybody here is probably at riskof spending too much.
But if you're below some ofthose thresholds, I would ask
(11:03):
are you doing everything in theprofitability category of your
business to where you couldafford this?
Because there might be somepeople that are like man, I
can't afford to give up 10% ofmy top line and I'm going for a
younger business.
I understand that, but what areyou doing in processes,
procedures, economies of scale,yeah, pricing A lot of people
(11:23):
just need to charge a little bitmore money.
It's amazing what happens whenyou charge more money, the value
that people assign to you.
They show up going oh, you'reone of the higher quality
providers and you didn't changeanything about your delivery.
And then the other thing Iwould say is it's all in
relation to your competitivelandscape and how fast you plan
(11:44):
on growing.
Caleb Agee (11:45):
Yeah, yeah, that's right.
So let's pretend like and we'regoing to use this to help us
pivot to the next way tocalculate your marketing budget.
Let's pretend, like you said, Iwant to get to 15 million this
year and let's say you were at12 million last year.
That's 20% growth year on year.
(12:05):
Cooking with grease that's athat's a big year.
Yeah, it's a big year we'vehelped companies do that.
Brandon Welch (12:10):
Yes, I've seen it happen.
Caleb Agee (12:12):
Yeah, and several so if you just go 15 million and
then you just try to set yourbudget, your marketing budget,
as a percent of, let's say, thisis a 20% growth year, to get to
that 15 million you're probablygoing to need to be in that
eight to 12 range, based on whatBrandon just explained.
So your marketing budget insideof that 15 million would be
(12:35):
between 1.2 million and 1.8million.
That's eight to 12%.
Brandon Welch (12:40):
Yep, wouldn't that be an awesome problem to
have is to decide whether you'regoing to spend 1.2 or 1.8
million in marketing.
Caleb Agee (12:45):
Yeah, how many of these millions should I spend?
Um, if you were in maybe moreof a maintenance motor, you had
a more mature, uh, marketingsituation, mature business.
Um, maybe 5% would be where wewould land you and that'd be
around 750,000 inside of that 15million.
So it's easy to say to slap abig number on the board, right,
(13:09):
and say 15 million, we're goingthere.
20%, um, it's also maybereasonable to just make up a, a
percent of budget.
I'm used to spending 10% onmarketing, so we're going to
spend no more than 10% onmarketing next year.
Um, but another way tocalculate this and this is part
two here is to work backwardsfrom the amount of customers you
(13:34):
would need to acquire to get to$15 million.
Yes, and this can help youestablish maybe a more realistic
marketing budget.
And so we made up just a reallybasic example inside of 15
million to kind of show you howthis might work.
Brandon Welch (13:49):
So your $15 million home service company of
some sort let's say your averagecustomer is worth 9,000 bucks.
This would probably apply tosome remodeling type companies.
This would apply to maybe someHVAC type companies.
So if you divide that 15million by 9,000, you would need
1,667 customers in a year'stime of some concentration
(14:15):
You'll have some bigger, somesmaller, but averages, a lot of
averages, would say you'd need1,667 customers, yeah.
So you're saying cool, here's astep a lot of people forget do
not give credit to youradvertising budget for customers
you were going to get anyway.
And it's not what it is.
It's not divided by our totalnumber of customers, it's what
(14:36):
does it cost us to get a newcustomer.
And so this, this example, isbased on, you know the
assumption you've been doingsome marketing and you already
have some growth momentumbecause of that.
Yeah, but let's just say youknow for sure 300 of your
customers out of that, 1,667were existing, what we call the
yesterday customer and or thereferral customers, or they're
(15:01):
just going to come from yourpast network.
And, by the way, this is wherethe advantage for an established
company gets exponentiallybetter.
Caleb Agee (15:05):
That number, that 300, becomes bigger every single
year.
Brandon Welch (15:08):
Yep, and as a result of that, your percentage
of marketing can go down.
While that happens, we have acustomer that's approaching a
60-year anniversary this yearand one that's approaching a 20.
Charging a 20 and their costper customer acquisition has
gone way down.
Even though marketing andeverything has gotten harder and
(15:31):
more expensive.
Their cost per acquisition hasgone up because they had that
repeat factor.
So so you're at.
You're saying, okay, 1667, Iknow 300 of those are going to
come anyway, no matter what.
So I've got 1367.
I need to get that are new,right?
Yep?
So take what you're currentlyspending.
Like what did it cost you lastyear to acquire a customer?
(15:54):
They spent somewhere in theneighborhood of $1.3 million.
Divide that by the number ofnew customers they got.
They got $1,200 per customer toacquire them, right, yep?
So you know, like, just lookingin the rearview mirror, hey,
last year I add up all mymarketing budget divided by all
the new customers I got, androughly the ratio in this case
was $1,200 per customer.
Yours may be higher, might belower, but you're just taking
(16:16):
new customers divided into yourmarketing budget.
Caleb Agee (16:19):
Yeah.
Brandon Welch (16:20):
And you get that number and even though in the
long run things are going to getbetter and more efficient, use
last year's numbers or the lastcouple of years' numbers to get
your average.
That's going to work forestablishing a budget.
Caleb Agee (16:31):
Yeah.
Brandon Welch (16:32):
So in this case they know they're spending about
$1,200 per customer.
They need 1,367 new customers.
You do that math 1,367 times1,200.
You got a $1.64 millionmarketing budget.
Should get you to that $15million mark.
If all things were the same.
Caleb Agee (16:48):
And that helps you establish, because you just said
I want to be a $15 millioncompany.
The next thing you have to sayis am I ready to market?
Brandon Welch (16:57):
like a $15 million company.
Caleb Agee (16:59):
Yes, and this backwards way helps you say well
, it's going to take $ 1.64million to market like a $15
million company.
Brandon Welch (17:08):
We have a lot of ambitious entrepreneurs that
come in and say I'm ready, we'regoing to grow 40% next year and
we're like great.
And it's like are you willingto increase your marketing
budget by at least that much?
And it's actually probably morelike 50 or 60%.
They need to increase to getthat lag in a year's time.
Caleb Agee (17:23):
And.
Brandon Welch (17:24):
And then they're going oh whoa, hold the phone.
I think I'll settle for 20%growth, and not that there's
anything wrong with stretchgoals and not that you can't.
Caleb Agee (17:35):
Push it.
Yeah, you're going to hustle,you're going to try.
Brandon Welch (17:38):
Yeah, yeah, but you're not going to get 50%
growth from 20% extra effort ifall other things stay the same,
yeah.
So just a real quick recap Takelast year's marketing budget,
divide it into the number of newcustomers you had.
That gives you your cost percustomer and then multiply that
(18:03):
times the number of newcustomers you need in order to
hit your next year's goal andyou're close and in this case,
that came out to what do youknow?
10.9% Right under that 8 to 12range, we were saying Yep, and
so we're still in range of whatthe industry expectations said
for a service-based business.
So there's two kind of datapoints.
(18:24):
You can kind of use those to goah, I'm spending about the
right amount of money.
Step three because we are onthe Maven Marketing Podcast and
we are all about eliminatingwaste in advertising.
You want to allocate thatbudget strategically, yeah?
Caleb Agee (18:39):
And I think we've talked about this many, many
times and we'll talk about itagain but you have to use that
money properly in order to getget the juice out of that
squeeze, right?
Because, uh and so, um, we'vetalked about some brilliant data
.
Scientists have studiedthousands of ads.
Um, how do you say his name?
(19:01):
Less?
Brandon Welch (19:02):
less than it.
And Peter field did a studyknown as the long and short of
it.
Yes, largest study ever done onthe effectiveness of
advertising.
Caleb Agee (19:10):
Yeah, you should get a copy, just google it it's
awesome um it's also reallyreally smart, yes, so turn on
your, your thinking cap, youknow, as you start reading it or
download it, copy, paste itinto GPT and say tell me what
this all means.
Brandon Welch (19:25):
Yeah, so we have always kind of suggested this.
We actually didn't know thatthere was data to support it.
It was just kind of our reallife intuition and experience
after doing this 15 years.
But what you want to do is take, if you're the most optimal
spin, like if you're thinkinglong term and you're going when
is this?
What mix is this going to payoff the most for me?
(19:48):
You want to put 60 to 70% ofyour budget into long-term
relationship building marketing.
So a lot of people would callthis branding.
What that means for us iswinning over the tomorrow
customer, and that means writingads that are relatable and
otherwise have value on themother than just what your offer
(20:09):
is today.
Yeah, so it's building umpersonalities, it's entertaining
people.
It's everything you see the bigbrands do so well, you know.
You know insurance companies carcompanies um, anything that's a
longterm household name, um,they're building a relationship
with their audience and they'reessentially learn to like us and
(20:30):
then one day, when you need us,you'll think of us and want to
do business with us.
Caleb Agee (20:33):
We're okay with the fact that you don't need us
right this second.
Yes, but when you do.
Brandon Welch (20:38):
Unless you're selling like cheeseburgers or
something that's most companies.
Yeah, your customer takes yearsto come around to you.
So don't advertise today andexpect that.
You know they're just going toall suddenly need you.
But but 60% to 70% you'reputting in long-term advertising
(21:06):
.
If you are a localized companytoday, in 2025, the most
efficient way to reach largegroups of people and become that
household name are still someof your traditional medias.
Believe it or not, tv and radioare still really efficient,
especially if you're talking toa 40-plus audience.
You can reach them on Facebookand it is true that all those
people are still on Facebook,but the cost per reaching people
is much higher on those medias.
Youtube is getting reallycompetitive for that goal.
Outdoor Billboard is alwayscompetitive in that but you need
(21:30):
to pick one and do it well, andthe other 30% to 40% of your
budget is going to go towardstransactional type things like
Google ads and targeted socialmedia ads that are going to be
offer driven.
That balance, that 70-30 or60-40 balance somewhere in that
realm, is going to be your mostprofitable ROI.
Caleb Agee (21:50):
Yeah, uh, profitable roi, yeah, and then at that you
know 1.64 million dollarmarketing budget we were just
talking about for our 15 milliondollar company yeah, they would
spend roughly half a million ontoday marketing on their google
ads and things like thatthroughout the year.
Um, and then they'd spendroughly a million on the
tomorrow marketing yes and soyou can see how that it's.
(22:11):
You know, one third, two thirds, essentially gets you pretty
close to what we're talkingabout.
Brandon Welch (22:16):
Yes.
So step three is just allocatethat strategically.
We've left this part out, butalways focus on your yesterday
customer.
That's cheap.
It costs you like $10.
Caleb Agee (22:28):
Yeah.
Brandon Welch (22:28):
And that will always bring your highest ROI.
It's just going to be limited.
It's just kind of a ceiling ifyou're a younger company.
Step four is adjust for yourbusiness maturity.
Hey, if you're starting up, youprobably can't wait.
You probably can't spend themajority of your budget on these
longer term campaigns eventhough they'll pay off longer.
Caleb Agee (22:46):
You might have an inverse ratio.
You might be spending 60% ontoday marketing because you got
bills to pay and mouths to feed.
Brandon Welch (22:52):
But peel off a little bit piece of profit from
every job, throw it in the kitty, for you know doing a really
mature to tomorrow marketingcampaign, that's right.
Establish businesses and youcan wait around.
You've got the cash flow,you've got the reserves, you
know.
You know the knobs you have toturn your business to make room
for that type of investment andyou can wait that you know, six
(23:14):
to 18 months it takes for thosetype of campaigns to mature.
Yeah and man, once you do that,you're going to slingshot past
your competitors and grab marketshare a bigger piece of the pie
.
Caleb Agee (23:23):
And that's where we saw, you know, those repeat
customers, the repeat andreferral customers that we don't
have to account for oradvertise or buy again.
Essentially, that number growsand even just you doing good
work will increase that numberAbsolutely, and so that's a
beautiful thing about just beingaround for a while.
That compounds over time.
Brandon Welch (23:44):
Yes, you're always tracking and refining it.
This should go without saying,and I think most owner-operators
do this, naturally.
But you are being reallyscrutinizing over what that
dollar is bringing you back,especially in the today
marketing category.
You've got to stay on top ofyour search engine folks and
(24:04):
your targeted advertising folks,because that is a moving set of
factors.
Caleb Agee (24:10):
Every single dollar you spend should be in service
of a business objective.
Brandon Welch (24:14):
Yes.
Caleb Agee (24:14):
And that that's starting with strategy.
And it's really easy to getdown to the budget and land on
the media Right.
Um, go back to the strategy andmake sure that what you're
doing you're not just doingtomorrow marketing to do it, you
have it in service of a goaland an objective.
Hopefully it's.
I know that I won't see maybethe results in the next month,
(24:36):
but in the next year I'll startto feel the difference.
Brandon Welch (24:38):
You know what it is for tomorrow marketing.
You know what the businessobjective is yeah, market share.
Caleb Agee (24:42):
Yeah.
Brandon Welch (24:43):
I'm at 5% market share this year.
I want to be at eight next yearby this time next year.
Caleb Agee (24:50):
Yeah, A lot of accountants have trouble with
that because that's an abstract,unmeasured number and so, but
it is, it is felt and seen and Ipromise you, promise, you,
promise you.
We've seen it a dozen timesover.
Brandon Welch (25:03):
There is a section in the chapter called
Tomorrow, the Tomorrow customer,which is chapter 12 in our book
, that talks.
It says this is for theaccountants.
Caleb Agee (25:12):
12 in our book that talks.
Brandon Welch (25:13):
it says this is for the accountants and the
takeaway is this you, if youhave a strict accounting mind
and you have to like, try toapply some like tangible oh, I
put this dollar in and it spitthis dollar out you're going to
lose and get remarkablyfrustrated with tomorrow
marketing because you cannotmeasure the collective thoughts,
(25:34):
feelings, emotions andpreferences of a future customer
.
Caleb Agee (25:37):
No, you, cannot, they can't be measured.
Brandon Welch (25:39):
No, there's some leading signals.
There's some like search enginevolume and how many times
people are searching for yourname, that you can start to see
it creep up.
We call those the seven cluesalong the way, and you can do,
if you wanted, to pay a bunch ofmoney and do what's called a
TOMA study, a top of mindawareness.
This big fancy company willcome in and survey your market
and you know, ask, you know namethe, all the plumbers you can
(26:04):
think of, and they'll kind ofcalculate what percentage of the
time you show up.
Trust that once you bond withhuman beings, one day, when they
need what you do, they willfeel the best about you and call
you.
Caleb Agee (26:20):
That's right.
Brandon Welch (26:20):
And so.
But you can check out thatchapter.
You're going to get a free copybecause you were one of the
ones that dropped a businessgoal in the Maven Monday at
frankenmavencom email or in thecomments.
Caleb Agee (26:33):
Yeah, we'd love to see some comments.
We'd love to see that, back andforth, tell each other what
your goals are Makes us feelgreat, yeah.
Brandon Welch (26:39):
Yeah, um.
More importantly, that helps usreach more entrepreneurs and
make the world of uh growing asmall business and easier and
more peaceful journey.
Caleb Agee (26:50):
Right.
Brandon Welch (26:50):
That's what we're all about.
Yeah, take us home with somefinal tips.
Caleb Agee (26:58):
Hey.
So make sure you fill one glassat a time.
Do one thing really really wellbefore you move on to the next
thing.
A lot of people are like, oh, Idon't know, if you had a
million dollar marketing budget,you'd say, great, I need to do
nine things and spread out mybudget really well to make sure
I use it in all the areas andI'll have all my eggs in one
basket.
No, no, no.
You need to fill up, put allyour eggs in the basket of one
group of people especially as wetalk about tomorrow customers
(27:24):
and do that really really well.
Then move on to the next thing.
And so just completely own thataudience, completely own that
media.
Before you start moving on,just make sure that you use
common sense on how fast you canreally really grow.
There are companies I know thatcan go from $20 to $50 million
over the course of a year.
That happens there are factors.
Brandon Welch (27:46):
Something's going to break.
Caleb Agee (27:47):
Yeah, there are factors that happened before
that.
Hopefully that probably kind ofled to that production.
Brandon Welch (27:53):
And if you're in your one to five year phase,
like 20, 30% growth is nothingLike it's.
You know, growing from half amillion to a million is not a
big deal.
Caleb Agee (28:02):
Yeah.
Brandon Welch (28:02):
Even though that's, like you know, 100%
growth, we're talking about more.
After that, four or five yearmaturity phase yes, and you can
do that.
Caleb Agee (28:11):
You can make sure that you're ready for it.
One, in your infrastructure,inside of your business.
But two, make sure you're readyto market the business that
you're claiming you want to be.
So before you, I really thinkyou should declare your goals
and your team should know aboutthem, but before you do that,
check the realisticness of them.
Is that a good word,realisticness and make sure that
(28:37):
you're ready for it.
Brandon Welch (28:39):
Yes, sir, and it all follows what you will learn,
the old ecclesiastes of seed,time and harvest there's a time
to plant, there's a time to reap, and all of those fun things
and you're picking weeds alongthe way, and it's just what will
never fail.
You is, if you put seeds in theground and you water them
meaning advertising and winningover future customers and you
(29:02):
show up and you just continueputting in the good old
fashioned work, you're going tohave everything you ever wanted.
Yeah, it's going to take you alittle longer than you think it
should and it's going to be alittle harder than you
anticipated it would be, butamen and hallelujah, because
that is what we call purpose andthat's what we call a life well
lived.
Caleb Agee (29:19):
Mm-hmm.
Brandon Welch (29:23):
Thank you for listening to that.
Yeah, hopefully that was nottoo long of an answer to a short
question.
Caleb Agee (29:27):
If you have any practical questions, maybe about
a marketing budget, maybe aboutsome plans you're making this
year, we would love to hear them.
You can email us at mavenmonday, at frankandmavencom.
Brandon Welch (29:38):
Mavenmonday@ frankandmaven.
com.
Caleb Agee (29:42):
We might feature it.
Answer it on an episode comingup.
Brandon Welch (29:46):
And we will be back here every single week
answering your real lifemarketing questions, because
marketers who can't teach youwhy Are?
Caleb Agee (29:53):
just a fancy lie.
Brandon Welch (29:55):
Have a great week .
These are all based on the assumptions that
you have a solid strategy, youhave a really good value
proposition, you have goodculture, you have a consistent
way of delivering your product,because any one of those things
could completely delete theefforts of your marketing.
Welcome to the Maven MarketingPodcast.
(00:20):
Today is Maven Monday.
I am your host, brandon Welch,and I'm here with Caleb Bicycle
Kick.
Agee Bicycle Kick he's got somebicycle kicks coming up in his
future.
No, I do not, he's gonesemi-pro in the football arenas.
Caleb Agee (00:34):
Yeah, that's the everywhere else football soccer.
I've been dabbling a little bitand semi-pro is generous.
I play at the local men'sindoor league, soon to be Caleb
ACL AG Caleb walks with a limpAgee.
Brandon Welch (00:54):
Hey, this is the place where we answer your real
life, marketing and soccerquestions, so you can eliminate
waste and advertising, grow yourbusiness and achieve the big
dream.
How's the big dream going for2025?
How's it treating you?
We'd love to know.
Caleb Agee (01:08):
Drop a comment in there.
Brandon Welch (01:09):
Yeah, First person to send us a comment or
just an email to mavenmonday@frankandmaven.
com with one important businessgoal for 2025,.
We're going to send you a hardcopy, hard back copy, hard copy.
Caleb Agee (01:23):
It's a hard back copy Of the Maven Mark back Hard
Copy Hard copy.
Brandon Welch (01:25):
It's a hard back copy hard cover Of the Maven
Marketer yeah, signed by theauthor.
What a treat, what a guy.
Caleb Agee (01:32):
What a guy.
Brandon Welch (01:34):
Hey, today burning question and we've
answered it in a roundabout waylots of times there's a great
episode from a few weeks backthat talks about three campaigns
that are killing it and why wejust broke them down like all
the components of the actualmarketing budgets.
Caleb Agee (01:49):
How much they're actually spending on everything.
Brandon Welch (01:51):
Hey, but we learned that YouTube is
underserved and we're playing alittle SEO game on y'all right
now.
Yeah, when people fire up thesearch, how much should my
marketing budget be?
And so why don't we just answerthe dadgum question?
Caleb Agee (02:03):
Yeah're just giving it to you straight today yes
short episode powerful episode,yeah here we go, here we go so
we're going to talk about twoapproaches to determining your
marketing budget um.
The first one, I think, isprobably more commonplace, and
it usually starts with um somesort of big goal Like right, you
(02:25):
set your annual revenue goalfor the year 84 million.
We're going to get to 15 millionthis year.
And then we usually look atmarketing as maybe a percent of
the whole right and that hasbenefits because you have maybe
fixed costs, assuming you hityour top line goal, you have
maybe a fixed cost or inside ofyour budget and your
(02:45):
profitability should be expectedbecause you've set that up.
And so we want to talk aboutthat approach first and say that
is valid, there's a way to dothat.
Get you close.
Get you close to what youshould do.
Brandon Welch (02:59):
So we're going to widen that and just give you
some extra things to think about, because we're all about
principles here, not hard, fastrules.
Caleb Agee (03:05):
Yeah this is the thing about talking about
budgets.
It's a really dangerous topicto cover because somebody could
take us very literally and thereality is not the same for any
business.
Brandon Welch (03:16):
Or any market, any market, your competitive
landscape, industries, yeah.
Caleb Agee (03:20):
There are so many factors to do this, so we're
paying with a big brush rightnow, but we're going to do our
best to help you out, but justto get you in the neighborhood,
all right.
So revenue-based approach.
Brandon Welch (03:31):
Yeah, part one revenue-based approach.
So you know what your businessdid top-line revenue last year
and most service businessesfollow kind of a certain gross
profit model.
Most service businesses we workwith are going to have a net
20% to 30% gross margin.
Sorry, I said net, I meantgross 20% to 30% margin, meaning
(03:51):
your cost of goods sold is thatinverse 60% to 70%, and then
your overhead is going to kindof come out of that last 20% to
30%.
And there are we have a tablewe're going to share here in
just a second, just of some fromvarious sources, various
industry sources across theinternet, what you might
consider for your industry.
But it's just generallyexpressed as if I made a million
(04:15):
dollars, how much should I putin marketing next year?
Or, sorry, if my top linerevenue was a million bucks, how
much should I put in marketing?
Right, yep, so that's going tobe expressed as a percentage.
You can look to any of yourindustry trades, your blogs or
Reddit channels or just anyamount of water cooler talk to
kind of get an idea what peoplein your space are doing.
(04:36):
I would encourage you to lookin similar size markets and, if
you can, with similarcompetitive landscapes.
This gets the reason thisparticular method gets a little
bit limited is because if youhave a really strong competitor
or an established competitor inyour market that has a really
(04:57):
large share of voice and I wouldsay anything bigger than a 15%
to 20% market share it's goingto be really hard to take that
competitor down.
Yeah than a 15 to 20% marketshare it's going to be really
hard to take that competitordown.
Yeah, so long as they're, youknow, not just screwing it up
and taking people's money androbbing them blind or something.
So, um, and, and that, in thatcase, all the numbers we're
about to talk, talk about youwould be on the high end of.
Similarly, uh, there are somecompetitors that are just lazy
(05:22):
and they're just waiting to bepicked off, and Some competitors
that are just lazy and they'rejust waiting to be picked off,
or markets that are justunderserved.
Caleb Agee (05:26):
There's nobody, no gorilla, in that market.
And you want to be the gorilla?
Might not be that hard, yeah,and that's the beautiful thing
to be able to show up and dothat.
Brandon Welch (05:37):
I will say this marketing can only do one thing
and that's make what was goingto happen anyway.
happen a little faster.
Yeah, so if you are ripe fordisruption, if your industry is
ripe for disruption, andsomebody comes along and
disrupts you, their marketingwill make it happen faster, but
it was going to happen anyway,right?
(05:57):
So these are all based on theassumptions that you have a
solid strategy, you have areally good value proposition,
you have good culture, you havea consistent way of delivering
your product, because any one ofthose things could completely
delete the efforts of yourmarketing.
Caleb Agee (06:14):
And we're giving this a lot of nuance up at the
top.
But we also say advertising isthe I think Roy Williams quoted
for this.
Advertising is the tax forbeing unremarkable.
Brandon Welch (06:24):
Yeah it's the tax we pay for being unremarkable.
Caleb Agee (06:26):
And there are some businesses that are, in their
own right, extremely remarkableand you'll see them pop up on
social medias or they'll havethese really viral campaigns and
they spend next to nothing.
And so these percentages forthat kind of business I was
talking to a business that's 20years old and they're not used
to spending more than you knowthree, four, 5% on marketing
(06:49):
because they've taken it instride, but they've also been
remarkable.
Brandon Welch (06:52):
Yes, basspro comes to mind.
Caleb Agee (06:55):
Yeah.
Brandon Welch (06:56):
Apple comes to mind.
A lot of that money they wouldhave put into marketing.
They instead put it into thecustomer experience and the
vision of the outcome theycreate and it just it snowballed
into something bigger thanmarketing could ever have done
for them.
Marketing just makes it happenfaster.
Some industry benchmarks formarketing budget percentages
(07:17):
You're in range, probably ifyou're in these industries.
Caleb Agee (07:19):
Okay, if you're in banking or finance, this source
says 9.49%, 9.49.
Brandon Welch (07:25):
Not to be confused with 9.5.
You're in banking and finance.
This source says 9.49%, 9.49%.
Caleb Agee (07:27):
Yeah, because you're in banking and finance, so you
had to get it right.
Brandon Welch (07:30):
Communications and media.
I think maybe you're ad agency,maybe you're running a social
media agency or something likethat.
15%, well, sorry, 14.27%, let'skeep on the decimal trend
Consumer packaged goods 25.19%.
Consumer services 11.74% yeah.
Caleb Agee (07:49):
Education 11.5%.
Brandon Welch (07:51):
Colleges spend a lot of money.
Yes, Energy utilities, thingsthat we don't need.
You only have to spend 3.8% onthat.
Yeah, and it's probably just tomake your people complain less.
Caleb Agee (08:04):
Yeah, it's probably more in the PR type of
department.
Yeah, healthcare 6.8%.
Brandon Welch (08:10):
That's a big category.
Healthcare could be eye doctorsall the way down to heart
surgeons.
Caleb Agee (08:14):
A hospital, 6% of their budget or of their top
line is way different than aprivate practice.
Brandon Welch (08:19):
Absolutely Manufacturing 3.75%.
Caleb Agee (08:24):
I love how they group these mining and
construction Um 6.5%.
Brandon Welch (08:28):
We don't have a lot of railroads, yeah, mining
and construction Wow, I'd haveto think about that one.
Uh, pharmaceuticals and biotech12.83%.
Caleb Agee (08:38):
Uh professional services 7.08%.
Brandon Welch (08:41):
Real estate 10.61%.
Caleb Agee (08:44):
Retail wholesale 14.08% Real estate 10.61% Retail
wholesale 14.52% yeah so Alittle higher.
Brandon Welch (08:51):
Yeah, just think the luxury goods and stuff.
Actually we have two retailcustomers and I'm thinking their
budgets are literally in that13% to 15% right now like
higher-end retail.
Yeah, service consulting uh-ohFranken and Maven 21%.
Are we spending 21%?
I don't think so.
You consulting Uh-oh,franken-maven 21%.
Are we spending 21%?
Caleb Agee (09:07):
I don't think so.
You know what we are spendingDepends on what we define as our
advertising budget.
Brandon Welch (09:10):
A lot of well, this is our advertising budget.
Caleb Agee (09:12):
This is our.
That's what I'm saying.
Brandon Welch (09:13):
And we invest a lot to make this happen for
y'all we really do.
You think, nate the Camera Guysgrow on trees Free, right for
the plucking.
Tech and software platforms11.8%.
Caleb Agee (09:26):
And transportation 1.52%.
Brandon Welch (09:29):
Yeah, so those are going to largely correlate,
I think, to the marginsavailable in those categories,
and so I would say, justpersonal experience, what I've
worked with the most areowner-operated companies that
have that 30-ish percent grossmargin, are owner-operated
companies that have that 30-ishpercent gross margin.
And just an off-the-cuff thingthat we offer is, if you're
(09:54):
trying to maintain what you haveand not really grow it faster
than it's growing, but justprotect yourself from market
share leak to other newcompetitors or whatever.
5% to 8% If you truly want togrow faster than the trend and
faster than you would have grown.
8% to 12%, and we have somethat surge to 15% to 20% if
they're wanting to grow evenfaster than that.
Caleb Agee (10:13):
Yeah.
Brandon Welch (10:13):
Namely companies that don't need to have, don't
need to pull a lot out of thatgross margin margins.
So I have some owner operatorsthat this is not their main
source of income and or theydon't need the income at this
time, so they'll, they'll.
They want to get it up to that.
You know, five, 10 millionrange a lot faster.
So they will go ahead and justfull well knowing it's not a
(10:37):
sustainable forever plan, butthey will launch over some of
their competitors by juststealing share voice and being
really aggressive in theirmarket.
So I would say the takeaway fromany of these is I don't think
anybody here is probably at riskof spending too much.
But if you're below some ofthose thresholds, I would ask
(11:03):
are you doing everything in theprofitability category of your
business to where you couldafford this?
Because there might be somepeople that are like man, I
can't afford to give up 10% ofmy top line and I'm going for a
younger business.
I understand that, but what areyou doing in processes,
procedures, economies of scale,yeah, pricing A lot of people
(11:23):
just need to charge a little bitmore money.
It's amazing what happens whenyou charge more money, the value
that people assign to you.
They show up going oh, you'reone of the higher quality
providers and you didn't changeanything about your delivery.
And then the other thing Iwould say is it's all in
relation to your competitivelandscape and how fast you plan
(11:44):
on growing.
Caleb Agee (11:45):
Yeah, yeah, that's right.
So let's pretend like and we'regoing to use this to help us
pivot to the next way tocalculate your marketing budget.
Let's pretend, like you said, Iwant to get to 15 million this
year and let's say you were at12 million last year.
That's 20% growth year on year.
(12:05):
Cooking with grease that's athat's a big year.
Yeah, it's a big year we'vehelped companies do that.
Brandon Welch (12:10):
Yes, I've seen it happen.
Caleb Agee (12:12):
Yeah, and several so if you just go 15 million and
then you just try to set yourbudget, your marketing budget,
as a percent of, let's say, thisis a 20% growth year, to get to
that 15 million you're probablygoing to need to be in that
eight to 12 range, based on whatBrandon just explained.
So your marketing budget insideof that 15 million would be
(12:35):
between 1.2 million and 1.8million.
That's eight to 12%.
Brandon Welch (12:40):
Yep, wouldn't that be an awesome problem to
have is to decide whether you'regoing to spend 1.2 or 1.8
million in marketing.
Caleb Agee (12:45):
Yeah, how many of these millions should I spend?
Um, if you were in maybe moreof a maintenance motor, you had
a more mature, uh, marketingsituation, mature business.
Um, maybe 5% would be where wewould land you and that'd be
around 750,000 inside of that 15million.
So it's easy to say to slap abig number on the board, right,
(13:09):
and say 15 million, we're goingthere.
20%, um, it's also maybereasonable to just make up a, a
percent of budget.
I'm used to spending 10% onmarketing, so we're going to
spend no more than 10% onmarketing next year.
Um, but another way tocalculate this and this is part
two here is to work backwardsfrom the amount of customers you
(13:34):
would need to acquire to get to$15 million.
Yes, and this can help youestablish maybe a more realistic
marketing budget.
And so we made up just a reallybasic example inside of 15
million to kind of show you howthis might work.
Brandon Welch (13:49):
So your $15 million home service company of
some sort let's say your averagecustomer is worth 9,000 bucks.
This would probably apply tosome remodeling type companies.
This would apply to maybe someHVAC type companies.
So if you divide that 15million by 9,000, you would need
1,667 customers in a year'stime of some concentration
(14:15):
You'll have some bigger, somesmaller, but averages, a lot of
averages, would say you'd need1,667 customers, yeah.
So you're saying cool, here's astep a lot of people forget do
not give credit to youradvertising budget for customers
you were going to get anyway.
And it's not what it is.
It's not divided by our totalnumber of customers, it's what
(14:36):
does it cost us to get a newcustomer.
And so this, this example, isbased on, you know the
assumption you've been doingsome marketing and you already
have some growth momentumbecause of that.
Yeah, but let's just say youknow for sure 300 of your
customers out of that, 1,667were existing, what we call the
yesterday customer and or thereferral customers, or they're
(15:01):
just going to come from yourpast network.
And, by the way, this is wherethe advantage for an established
company gets exponentiallybetter.
Caleb Agee (15:05):
That number, that 300, becomes bigger every single
year.
Brandon Welch (15:08):
Yep, and as a result of that, your percentage
of marketing can go down.
While that happens, we have acustomer that's approaching a
60-year anniversary this yearand one that's approaching a 20.
Charging a 20 and their costper customer acquisition has
gone way down.
Even though marketing andeverything has gotten harder and
(15:31):
more expensive.
Their cost per acquisition hasgone up because they had that
repeat factor.
So so you're at.
You're saying, okay, 1667, Iknow 300 of those are going to
come anyway, no matter what.
So I've got 1367.
I need to get that are new,right?
Yep?
So take what you're currentlyspending.
Like what did it cost you lastyear to acquire a customer?
(15:54):
They spent somewhere in theneighborhood of $1.3 million.
Divide that by the number ofnew customers they got.
They got $1,200 per customer toacquire them, right, yep?
So you know, like, just lookingin the rearview mirror, hey,
last year I add up all mymarketing budget divided by all
the new customers I got, androughly the ratio in this case
was $1,200 per customer.
Yours may be higher, might belower, but you're just taking
(16:16):
new customers divided into yourmarketing budget.
Caleb Agee (16:19):
Yeah.
Brandon Welch (16:20):
And you get that number and even though in the
long run things are going to getbetter and more efficient, use
last year's numbers or the lastcouple of years' numbers to get
your average.
That's going to work forestablishing a budget.
Caleb Agee (16:31):
Yeah.
Brandon Welch (16:32):
So in this case they know they're spending about
$1,200 per customer.
They need 1,367 new customers.
You do that math 1,367 times1,200.
You got a $1.64 millionmarketing budget.
Should get you to that $15million mark.
If all things were the same.
Caleb Agee (16:48):
And that helps you establish, because you just said
I want to be a $15 millioncompany.
The next thing you have to sayis am I ready to market?
Brandon Welch (16:57):
like a $15 million company.
Caleb Agee (16:59):
Yes, and this backwards way helps you say well
, it's going to take $ 1.64million to market like a $15
million company.
Brandon Welch (17:08):
We have a lot of ambitious entrepreneurs that
come in and say I'm ready, we'regoing to grow 40% next year and
we're like great.
And it's like are you willingto increase your marketing
budget by at least that much?
And it's actually probably morelike 50 or 60%.
They need to increase to getthat lag in a year's time.
Caleb Agee (17:23):
And.
Brandon Welch (17:24):
And then they're going oh whoa, hold the phone.
I think I'll settle for 20%growth, and not that there's
anything wrong with stretchgoals and not that you can't.
Caleb Agee (17:35):
Push it.
Yeah, you're going to hustle,you're going to try.
Brandon Welch (17:38):
Yeah, yeah, but you're not going to get 50%
growth from 20% extra effort ifall other things stay the same,
yeah.
So just a real quick recap Takelast year's marketing budget,
divide it into the number of newcustomers you had.
That gives you your cost percustomer and then multiply that
(18:03):
times the number of newcustomers you need in order to
hit your next year's goal andyou're close and in this case,
that came out to what do youknow?
10.9% Right under that 8 to 12range, we were saying Yep, and
so we're still in range of whatthe industry expectations said
for a service-based business.
So there's two kind of datapoints.
(18:24):
You can kind of use those to goah, I'm spending about the
right amount of money.
Step three because we are onthe Maven Marketing Podcast and
we are all about eliminatingwaste in advertising.
You want to allocate thatbudget strategically, yeah?
Caleb Agee (18:39):
And I think we've talked about this many, many
times and we'll talk about itagain but you have to use that
money properly in order to getget the juice out of that
squeeze, right?
Because, uh and so, um, we'vetalked about some brilliant data
.
Scientists have studiedthousands of ads.
Um, how do you say his name?
(19:01):
Less?
Brandon Welch (19:02):
less than it.
And Peter field did a studyknown as the long and short of
it.
Yes, largest study ever done onthe effectiveness of
advertising.
Caleb Agee (19:10):
Yeah, you should get a copy, just google it it's
awesome um it's also reallyreally smart, yes, so turn on
your, your thinking cap, youknow, as you start reading it or
download it, copy, paste itinto GPT and say tell me what
this all means.
Brandon Welch (19:25):
Yeah, so we have always kind of suggested this.
We actually didn't know thatthere was data to support it.
It was just kind of our reallife intuition and experience
after doing this 15 years.
But what you want to do is take, if you're the most optimal
spin, like if you're thinkinglong term and you're going when
is this?
What mix is this going to payoff the most for me?
(19:48):
You want to put 60 to 70% ofyour budget into long-term
relationship building marketing.
So a lot of people would callthis branding.
What that means for us iswinning over the tomorrow
customer, and that means writingads that are relatable and
otherwise have value on themother than just what your offer
(20:09):
is today.
Yeah, so it's building umpersonalities, it's entertaining
people.
It's everything you see the bigbrands do so well, you know.
You know insurance companies carcompanies um, anything that's a
longterm household name, um,they're building a relationship
with their audience and they'reessentially learn to like us and
(20:30):
then one day, when you need us,you'll think of us and want to
do business with us.
Caleb Agee (20:33):
We're okay with the fact that you don't need us
right this second.
Yes, but when you do.
Brandon Welch (20:38):
Unless you're selling like cheeseburgers or
something that's most companies.
Yeah, your customer takes yearsto come around to you.
So don't advertise today andexpect that.
You know they're just going toall suddenly need you.
But but 60% to 70% you'reputting in long-term advertising
(21:06):
.
If you are a localized companytoday, in 2025, the most
efficient way to reach largegroups of people and become that
household name are still someof your traditional medias.
Believe it or not, tv and radioare still really efficient,
especially if you're talking toa 40-plus audience.
You can reach them on Facebookand it is true that all those
people are still on Facebook,but the cost per reaching people
is much higher on those medias.
Youtube is getting reallycompetitive for that goal.
Outdoor Billboard is alwayscompetitive in that but you need
(21:30):
to pick one and do it well, andthe other 30% to 40% of your
budget is going to go towardstransactional type things like
Google ads and targeted socialmedia ads that are going to be
offer driven.
That balance, that 70-30 or60-40 balance somewhere in that
realm, is going to be your mostprofitable ROI.
Caleb Agee (21:50):
Yeah, uh, profitable roi, yeah, and then at that you
know 1.64 million dollarmarketing budget we were just
talking about for our 15 milliondollar company yeah, they would
spend roughly half a million ontoday marketing on their google
ads and things like thatthroughout the year.
Um, and then they'd spendroughly a million on the
tomorrow marketing yes and soyou can see how that it's.
(22:11):
You know, one third, two thirds, essentially gets you pretty
close to what we're talkingabout.
Brandon Welch (22:16):
Yes.
So step three is just allocatethat strategically.
We've left this part out, butalways focus on your yesterday
customer.
That's cheap.
It costs you like $10.
Caleb Agee (22:28):
Yeah.
Brandon Welch (22:28):
And that will always bring your highest ROI.
It's just going to be limited.
It's just kind of a ceiling ifyou're a younger company.
Step four is adjust for yourbusiness maturity.
Hey, if you're starting up, youprobably can't wait.
You probably can't spend themajority of your budget on these
longer term campaigns eventhough they'll pay off longer.
Caleb Agee (22:46):
You might have an inverse ratio.
You might be spending 60% ontoday marketing because you got
bills to pay and mouths to feed.
Brandon Welch (22:52):
But peel off a little bit piece of profit from
every job, throw it in the kitty, for you know doing a really
mature to tomorrow marketingcampaign, that's right.
Establish businesses and youcan wait around.
You've got the cash flow,you've got the reserves, you
know.
You know the knobs you have toturn your business to make room
for that type of investment andyou can wait that you know, six
(23:14):
to 18 months it takes for thosetype of campaigns to mature.
Yeah and man, once you do that,you're going to slingshot past
your competitors and grab marketshare a bigger piece of the pie
.
Caleb Agee (23:23):
And that's where we saw, you know, those repeat
customers, the repeat andreferral customers that we don't
have to account for oradvertise or buy again.
Essentially, that number growsand even just you doing good
work will increase that numberAbsolutely, and so that's a
beautiful thing about just beingaround for a while.
That compounds over time.
Brandon Welch (23:44):
Yes, you're always tracking and refining it.
This should go without saying,and I think most owner-operators
do this, naturally.
But you are being reallyscrutinizing over what that
dollar is bringing you back,especially in the today
marketing category.
You've got to stay on top ofyour search engine folks and
(24:04):
your targeted advertising folks,because that is a moving set of
factors.
Caleb Agee (24:10):
Every single dollar you spend should be in service
of a business objective.
Brandon Welch (24:14):
Yes.
Caleb Agee (24:14):
And that that's starting with strategy.
And it's really easy to getdown to the budget and land on
the media Right.
Um, go back to the strategy andmake sure that what you're
doing you're not just doingtomorrow marketing to do it, you
have it in service of a goaland an objective.
Hopefully it's.
I know that I won't see maybethe results in the next month,
(24:36):
but in the next year I'll startto feel the difference.
Brandon Welch (24:38):
You know what it is for tomorrow marketing.
You know what the businessobjective is yeah, market share.
Caleb Agee (24:42):
Yeah.
Brandon Welch (24:43):
I'm at 5% market share this year.
I want to be at eight next yearby this time next year.
Caleb Agee (24:50):
Yeah, A lot of accountants have trouble with
that because that's an abstract,unmeasured number and so, but
it is, it is felt and seen and Ipromise you, promise, you,
promise you.
We've seen it a dozen timesover.
Brandon Welch (25:03):
There is a section in the chapter called
Tomorrow, the Tomorrow customer,which is chapter 12 in our book
, that talks.
It says this is for theaccountants.
Caleb Agee (25:12):
12 in our book that talks.
Brandon Welch (25:13):
it says this is for the accountants and the
takeaway is this you, if youhave a strict accounting mind
and you have to like, try toapply some like tangible oh, I
put this dollar in and it spitthis dollar out you're going to
lose and get remarkablyfrustrated with tomorrow
marketing because you cannotmeasure the collective thoughts,
(25:34):
feelings, emotions andpreferences of a future customer
.
Caleb Agee (25:37):
No, you, cannot, they can't be measured.
Brandon Welch (25:39):
No, there's some leading signals.
There's some like search enginevolume and how many times
people are searching for yourname, that you can start to see
it creep up.
We call those the seven cluesalong the way, and you can do,
if you wanted, to pay a bunch ofmoney and do what's called a
TOMA study, a top of mindawareness.
This big fancy company willcome in and survey your market
and you know, ask, you know namethe, all the plumbers you can
(26:04):
think of, and they'll kind ofcalculate what percentage of the
time you show up.
Trust that once you bond withhuman beings, one day, when they
need what you do, they willfeel the best about you and call
you.
Caleb Agee (26:20):
That's right.
Brandon Welch (26:20):
And so.
But you can check out thatchapter.
You're going to get a free copybecause you were one of the
ones that dropped a businessgoal in the Maven Monday at
frankenmavencom email or in thecomments.
Caleb Agee (26:33):
Yeah, we'd love to see some comments.
We'd love to see that, back andforth, tell each other what
your goals are Makes us feelgreat, yeah.
Brandon Welch (26:39):
Yeah, um.
More importantly, that helps usreach more entrepreneurs and
make the world of uh growing asmall business and easier and
more peaceful journey.
Caleb Agee (26:50):
Right.
Brandon Welch (26:50):
That's what we're all about.
Yeah, take us home with somefinal tips.
Caleb Agee (26:58):
Hey.
So make sure you fill one glassat a time.
Do one thing really really wellbefore you move on to the next
thing.
A lot of people are like, oh, Idon't know, if you had a
million dollar marketing budget,you'd say, great, I need to do
nine things and spread out mybudget really well to make sure
I use it in all the areas andI'll have all my eggs in one
basket.
No, no, no.
You need to fill up, put allyour eggs in the basket of one
group of people especially as wetalk about tomorrow customers
(27:24):
and do that really really well.
Then move on to the next thing.
And so just completely own thataudience, completely own that
media.
Before you start moving on,just make sure that you use
common sense on how fast you canreally really grow.
There are companies I know thatcan go from $20 to $50 million
over the course of a year.
That happens there are factors.
Brandon Welch (27:46):
Something's going to break.
Caleb Agee (27:47):
Yeah, there are factors that happened before
that.
Hopefully that probably kind ofled to that production.
Brandon Welch (27:53):
And if you're in your one to five year phase,
like 20, 30% growth is nothingLike it's.
You know, growing from half amillion to a million is not a
big deal.
Caleb Agee (28:02):
Yeah.
Brandon Welch (28:02):
Even though that's, like you know, 100%
growth, we're talking about more.
After that, four or five yearmaturity phase yes, and you can
do that.
Caleb Agee (28:11):
You can make sure that you're ready for it.
One, in your infrastructure,inside of your business.
But two, make sure you're readyto market the business that
you're claiming you want to be.
So before you, I really thinkyou should declare your goals
and your team should know aboutthem, but before you do that,
check the realisticness of them.
Is that a good word,realisticness and make sure that
(28:37):
you're ready for it.
Brandon Welch (28:39):
Yes, sir, and it all follows what you will learn,
the old ecclesiastes of seed,time and harvest there's a time
to plant, there's a time to reap, and all of those fun things
and you're picking weeds alongthe way, and it's just what will
never fail.
You is, if you put seeds in theground and you water them
meaning advertising and winningover future customers and you
(29:02):
show up and you just continueputting in the good old
fashioned work, you're going tohave everything you ever wanted.
Yeah, it's going to take you alittle longer than you think it
should and it's going to be alittle harder than you
anticipated it would be, butamen and hallelujah, because
that is what we call purpose andthat's what we call a life well
lived.
Caleb Agee (29:19):
Mm-hmm.
Brandon Welch (29:23):
Thank you for listening to that.
Yeah, hopefully that was nottoo long of an answer to a short
question.
Caleb Agee (29:27):
If you have any practical questions, maybe about
a marketing budget, maybe aboutsome plans you're making this
year, we would love to hear them.
You can email us at mavenmonday, at frankandmavencom.
Brandon Welch (29:38):
Mavenmonday@ frankandmaven.
com.
Caleb Agee (29:42):
We might feature it.
Answer it on an episode comingup.
Brandon Welch (29:46):
And we will be back here every single week
answering your real lifemarketing questions, because
marketers who can't teach youwhy Are?
Caleb Agee (29:53):
just a fancy lie.
Brandon Welch (29:55):
Have a great week .
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