Somebody in the room always says it: "We should be spending 5 to 10 percent of revenue on marketing." Then everyone nods and nothing changes, because the range is so wide it justifies any decision including doing nothing.
Here is a more useful way to get to a number.
Start by defining what counts
Most small B2B companies underestimate their marketing spend badly, because they only count the invoices with the word marketing on them. A defensible budget includes:
- Salaries and benefits for anyone whose job is marketing, in full or in part
- Agencies, contractors, freelancers
- Software: CRM, email, SEO tools, analytics, design
- Media: paid search, paid social, sponsorships
- Events, trade shows, booths, travel for those events
- Production: video, photography, print, website work
Run that total for last year before you argue about this year. Most companies find they were already spending 4 to 6 percent while believing they spent 2.
Benchmarks by stage, not by industry
Maintenance, 2 to 5 percent. Referral-driven, capacity constrained, no growth target. Marketing keeps the lights on: the website is current, the brand is intact, existing clients hear from you.
Steady growth, 5 to 10 percent. The standard band for established B2B services, manufacturing and professional firms that want predictable year-over-year growth.
Aggressive growth or new market, 10 to 20 percent. Entering a new geography, launching a new service line, or trying to take share in a competitive category. Expensive and correct when the goal is real.
Venture-backed B2B SaaS, 20 percent and up. Normal for that model, because the money is buying market position against a funding clock. Copying it without the funding model is how companies hurt themselves.
Three adjustments to the benchmark
Sales cycle length. A nine-month B2B cycle means today's spend shows up in next year's revenue. Long cycles justify higher sustained spend and demand more patience from the board.
Deal size. A company with $150,000 average contracts can spend far more per opportunity than one selling $8,000 engagements. Percentage of revenue matters less than cost per opportunity against contract value.
Delivery capacity. This is the one people skip. In professional services, generating demand you cannot deliver on damages the brand you just paid to build. If you are booked out four months, spend less and fix delivery first. That is a real answer, not an excuse.
Work backwards from the pipeline instead
Percentage benchmarks are a sanity check. The actual budget should be built backwards:
- Revenue target for next year, minus expected revenue from existing clients and referrals. That gap is what marketing has to cover.
- Divide the gap by average deal size. That is the number of new deals needed.
- Divide by your close rate on qualified opportunities. That is the number of qualified opportunities needed.
- Multiply by your cost per qualified opportunity. That is your marketing budget.
Worked example: a $5M services firm wants $6M. Existing clients and referrals cover $5.3M. The gap is $700,000. Average deal is $60,000, so twelve deals. Close rate on qualified opportunities is one in three, so 36 qualified opportunities. If each one has historically cost about $7,000 to generate, the budget is $252,000. That is 5.04 percent of current revenue ($5M) and 4.2 percent of the $6M target.
Now you have a number a CFO can argue with on its merits, which is the point.
If you cannot fill in step four
Most companies at this size do not know their cost per qualified opportunity. That is a measurement problem, and it is cheaper to fix than a budget problem. Get CRM stages defined, tag lead source properly, and give it two quarters. Until then, use 5 to 7 percent of revenue as a placeholder and treat the first year as buying data as much as buying pipeline.
The split inside the number
A reasonable starting allocation for a B2B company in the 5 to 10 percent band: roughly half to people, whether internal or fractional leadership plus contractors; a quarter to content and visibility infrastructure that compounds; a fifth to paid media and events; the remainder to tools. Adjust from there based on where your pipeline actually comes from, not on where it is most comfortable to spend.
If you want an outside read on whether your spend is producing anything, the Growth Readiness Assessment scores your engine in about five minutes, and the Vancouver cost breakdown shows what each dollar level buys locally. For the split in dollars at $3,000 to $10,000 a month, see the four-bucket budget plan.
About the author
José Cabal, AI Marketing Consultant
AI Marketing Consultant · HubSpot Certified Trainer · Vancouver, BC
José Cabal has 20+ years of B2B marketing experience across Canada, the US, and Latin America, working with companies in tech, real estate, professional services, health, education, and manufacturing. He is a HubSpot Certified Trainer, holds an MBA from University Canada West, and founded Expresa3 in 2010 — one of the first inbound marketing agencies in Latin America. He has trained hundreds of marketers in English and Spanish, served on the HubSpot LATAM Partner Advisory Council, and spoken at conferences and universities across North America. He currently consults for SMBs building AI-powered marketing systems alongside his role as Head of Marketing and Business Systems for a growing company.
More about José Cabal · LinkedIn
Frequently asked questions
What percentage of revenue should B2B companies spend on marketing?
Most established B2B companies spend between 5 and 10 percent of revenue on marketing. Flat or maintenance mode sits near 2 to 5 percent. Aggressive growth or a new market entry runs 10 to 20 percent. B2B SaaS chasing growth often exceeds 20 percent, which is normal for that model and dangerous for anyone else.
Does the percentage include salaries?
Yes. A defensible marketing budget includes salaries and benefits for anyone whose job is marketing in full or in part, plus agencies, contractors, software, media, events and production such as video, photography and website work. A budget that counts only ad spend and agency fees while ignoring a $100,000 marketing manager is incomplete. Run the full total for last year first: most companies find they were already spending 4 to 6 percent while believing they spent 2. That is the number a CFO recognises.
How much should a $5M B2B services company spend on marketing?
At 5 to 8 percent of revenue, a $5M B2B services company spends $250,000 to $400,000 per year, which is $20,833 to $33,333 per month fully loaded, including any internal salaries. If you have one internal marketing person, most of that budget is already committed to payroll. Building the budget backwards from the pipeline can give a different figure: the worked example in this article, a $5M firm aiming for $6M, comes to $252,000 per year, or 5.04 percent of current revenue.
Should I spend more or less than the benchmark?
Spend above benchmark when your sales cycle is long, your category is competitive, or you are entering a new market. Spend below it when referrals genuinely carry your pipeline and you are capacity constrained rather than demand constrained. The benchmark is a starting point, not a target.
How do I know if my marketing budget is working?
Track two numbers: marketing-sourced pipeline against total marketing cost, and cost per qualified opportunity. Total marketing cost includes salaries, contractors, software, media, events and production, not only agency invoices. If you cannot produce either number, your first budget problem is measurement. Define the stages in your CRM, tag the lead source on every enquiry, and give it two quarters. Until the data exists, use 5 to 7 percent of revenue as a placeholder and treat the first year as buying data as much as buying pipeline.
How do you build a marketing budget from the pipeline instead of a benchmark?
Take next year's revenue target, subtract expected revenue from existing clients and referrals to find the gap, divide by average deal size to get the number of new deals needed, divide by your close rate to get the number of qualified opportunities needed, then multiply by cost per qualified opportunity. The result is a specific dollar figure a CFO can argue with on its merits, rather than a percentage borrowed from a benchmark.
Can delivery capacity change how much a company should spend on marketing?
Yes, and it is the adjustment most companies skip. In professional services, generating demand a team cannot deliver on damages the brand the spend was meant to build. A company booked out four months ahead should spend less on demand generation and fix delivery capacity first, which is a legitimate budget answer, not an excuse to avoid marketing.
How should a B2B marketing budget be split across categories?
A reasonable starting allocation in the 5 to 10 percent band is roughly half to people (internal staff, fractional leadership, or contractors), a quarter to content and visibility infrastructure that compounds over time, a fifth to paid media and events, and the remainder to tools. Adjust from there based on where pipeline actually comes from, not on where spending feels most comfortable.