Sola asked three people how much his logistics company should spend on marketing.
His accountant said 5% of revenue. A consultant at a breakfast seminar said 10%. A LinkedIn post with 4,000 likes said 12%, “if you’re serious about growth”. Sola averaged them, landed on 9%, and felt very scientific about it.
Every founder eventually asks this question, and every answer is a different number. Nobody selling marketing wants to say it first, but the percentage question is mostly the wrong question.
Benchmarks are averages of strangers, companies with different margins, different customer values, different competition and different leaks. Copying their average is like taking a stranger’s prescription because you’re both roughly the same height.
Work out your number, and, more important than the total, the order to spend it in.
What the Benchmarks Say, and Why to Hold Them Loosely
There’s no authoritative rule. Gartner’s 2025 CMO Spend Survey puts marketing at 7.7% of company revenue, mostly among large firms, and the US Small Business Administration says there’s no hard and fast answer. Typical guidance lands in the mid-to-high single digits. It runs lower for established businesses defending a position, higher for businesses in growth mode or launching, and higher again for consumer businesses than industrial ones.
Daniel Kahneman spent a career on this trap. In Thinking, Fast and Slow, he shows how the first number you hear, even a random one, drags your own estimate towards it. Sola didn’t calculate 9%. He was anchored three times.
What no benchmark can tell you is whether your spend is working.
A business spending 4% of revenue on a sealed, measured system will outgrow one spending 12% into leaks. I’d back the 4% business every time.
The total is the least interesting number in your marketing budget. The allocation is everything.
Work Your Number Out From What a Customer Is Worth
The businesses that budget marketing confidently all use some version of the same logic, in three steps.
- Know what a customer is worth. Look past one purchase to the profit a customer generates over their whole time with you, their lifetime value. If you haven’t calculated it, that comes first, and our guide to customer worth in naira walks you through it.
- Decide what you’ll pay to win one. A common, defensible position is that winning a customer should cost no more than a third of what they’re worth, so the relationship stays comfortably profitable after service costs and surprises. Treat that ratio as a starting position. A business with fast repeat purchases can be more aggressive than one with slow, one-off sales.
- Multiply by the growth you want. Say you want 50 new customers a month at an affordable acquisition cost of ₦40,000. Your acquisition budget needs to be about ₦2M, plus the fixed costs of the system that makes acquisition work. Now the budget follows from a growth decision, and nobody has to guess.
This method turns “how much should we spend?” into two questions your business can actually answer. How many customers do you want, and what can you afford to pay for each? Every naira then answers to a target.
Budget the Four Walls in Order
This is where most budgets fail, and the total has little to do with it. Nearly everything goes to visible spending like ads, content and posting, while the infrastructure that makes visible spending work gets nothing. Our complete guide to the marketing maze makes the full argument for the build order. For a budget, the order works like this.
- Fund measurement first, permanently. Set aside a modest, non-negotiable slice, often 5 to 10% of the total, for tracking, reconciliation and reporting. This is the line that makes every other line auditable. Skip it to buy more ads and you’ll spend confidently on fiction, which the measurement guide shows in painful detail.
- Fund conversion before more traffic. If your pages leak, the best-returning line in the budget is fixing the destination, because a conversion improvement multiplies the value of every visitor you already buy. Scaling traffic only makes arithmetic sense after that.
- Fund retention as an asset. Email and WhatsApp programmes cost little compared with acquisition, and they compound. They’re the lines that make this year’s acquisition spend keep paying next year.
- Then scale acquisition aggressively, into a system built to keep what it catches. Rising auction prices make that requirement stricter every year.
The most common Nigerian marketing budget we audit is 90 to 100% acquisition, with nothing for measurement, conversion or retention. It fails because it’s lopsided, whatever the total.
Three Budget Rules That Survive Real Life
Set a Floor as Well as a Ceiling
Budgets get discussed as maximums, but the more dangerous number is the minimum. Below a certain spend, a channel produces no useful signal. There’s too little data to optimise ads, too little content to build visibility and too little consistency to compound. If you can’t fund a channel to its minimum effective dose, the honest move is to leave it out for now and concentrate. Half-funding five channels is like buying half a generator for every room in the house.
Keep Testing Money Apart From Proven Money
Hold a small slice, commonly 10 to 15%, for deliberate experiments, like a new channel, a new offer or a new audience. Everything else goes to what’s already proven. That keeps experiments alive without letting hope raid the money that pays the bills, and it gives every experiment a set cost and a written goal.
Review Quarterly, Commit Monthly
Channel economics shift. Auctions inflate, algorithms change and seasons turn, so the budget that was right in January is stale by June. A quarterly reallocation based on reconciled revenue data, never on platform-claimed numbers, keeps money flowing toward what’s working. Committing monthly protects you from the opposite mistake of yanking spend around before anything has had time to work.
Start With Two Numbers
Before you pick any total, write down what one customer is worth to you in gross profit, and how many new customers you want this quarter. Your budget comes from those two figures, and an industry percentage can sit in the footnotes.
Every line you add after that should carry a written goal, so you can defend it, fix it or cut it with confidence.
Two Numbers Before Any Percentage
Sola’s 9% might even turn out to be the right number. He’ll only know once he works out what a customer is worth to him, and where the money is leaking before it reaches one.
The free 2-minute diagnostic is a good place to start, because it shows which of your four walls needs the money first.
P.S. If you already spend ₦1M or more a month, the free 30-minute Leak Check will show you three places that budget is leaking.
Sola’s story is illustrative. Benchmark ranges cited are commonly referenced industry guidance and vary widely by industry, margin structure and growth stage, so treat them as orientation. This article is general information, not financial advice.
