Growth strategy
Base your marketing budget on the revenue you want, not the revenue you have
The short answer
Pick the revenue you're aiming for 90 days or a year from now, apply your marketing percentage to that number, and start spending it now. At the very least, your budget should grow as fast as your growth target. Then spend it as a steady run of small experiments, each one kept, iterated or killed.
Why not just spend a percentage of current revenue?
Because current revenue is the result of what you’ve already been doing. Budget off it and you lock in the size of business you already have.
I see this in forecasts all the time. The revenue line climbs nicely for the next twelve months and the marketing line stays flat. Nothing in the plan pays for the climb. Marketing spend should be forecast relative to your target revenue level, not to what you made last year.
The way I put it to founders: you don’t want to be spending a percentage of your current revenue, you want to be spending off your 90-day goal revenue to reach it. The money has to go in before the revenue shows up.
How do you set the number?
- Decide the revenue you want 90 days out, or a year out if you plan annually.
- Apply your marketing percentage to that target, not to today’s figure.
- Start spending at that level now, ahead of the revenue it’s meant to create.
- Sense-check it against what you’ve actually spent over the last 12 to 24 months.
The floor is simple. If you’re planning to grow 4%, your marketing budget should rise by at least 4%. Anything less and you’re asking the same money to do more work every year.
Why compare it with the last two years of spend?
Because someone is going to ask where the extra money is going, and “growth” isn’t an answer. That someone might be a business partner, your accountant, or you in three months’ time.
Pull what you’ve spent on marketing over the last 12 to 24 months and put the new budget next to it. The gap is the bit you need to explain. If you can say which experiments the extra goes into and what each one has to prove, the budget is easy to sign off and you know exactly what you’re buying.
How should you spend a bigger budget?
As a volume of experiments, not one big bet.
List every idea you’ve got: a new ad angle, a quiz, a bundle, a landing page, a new flow. Score each one on impact and ease, and start at the top of the list.
Give each test a small budget and decide up front what success looks like. For most stores that’s new paying customers. Leads and clicks are nice, but they don’t pay the bills. If a test hits the number, scale it. If it doesn’t, you’ve learned something cheaply and you fall back to what already works.
Then mark every experiment keep, iterate or kill. Keep the winners running. Iterate on the ones that showed a pulse. Kill the rest without guilt.
I’ve been doing this too long to promise anyone a result from a single campaign. Everything is testing, and anyone in my position who doesn’t say that is lying to you.
Why won’t one lever double the business?
Because doubling rarely comes from one place. It’s more like 30% in three areas. Lift traffic, conversion rate and average order value by about 30% each and they multiply out to a bit over double (1.3 x 1.3 x 1.3 is roughly 2.2).
That’s why the experiment list needs to cover the whole business. If every test on your list is a new Meta campaign, you’re only working one of the three.
What if the experiments keep failing?
Then look at the product before you look at the marketing.
I had a founder ask me how to double their business in 12 months. Their email revenue was strong, so people who already knew the brand kept buying. But the site barely converted new visitors. That’s a front-end growth problem, and underneath it a product-market fit question. No amount of button colours and checkout tweaks will fix that. You can’t out-CRO product-market fit.
So point the first experiments at the offer and who it is for, and scale the budget once new customers start buying.