Where Should a Growing Business Spend Its Marketing Budget?

One of the most common marketing questions I hear is:

“How much should we be spending on marketing?”

Usually, what the business really wants to know is something slightly different:

“Where should we spend it so it actually does something?”

That is the better question. Because two businesses could have the exact same $30,000 marketing budget and need completely different plans.

One might need a better website.
Another might need people to actually discover the website.
And another might need to stop spending money on lead generation until someone starts following up on the leads they already have.

There is no magical marketing percentage that solves all three.

A growing business should spend its marketing budget on the area most likely to remove the next barrier to growth. That may mean improving its website, building awareness, generating leads, strengthening sales follow-up, creating better sales materials or investing in customer retention.

The right small business marketing budget depends on the company’s growth objective, customer value, buying cycle, existing reputation, competition, geography and internal capacity.

The smartest marketing budget isn’t divided evenly. It’s directed at the thing most likely to move the business forward.

Search online for how much a business should spend on marketing and you’ll find plenty of percentages.

Five percent.
Seven percent.
Ten percent.
More if you’re growing aggressively.

Those benchmarks can be useful for budgeting conversations, but they don’t tell you where the money should go.

And that’s the part that matters.

A percentage doesn’t know:

• whether your website works
• whether anyone has heard of you
• whether your competitors dominate Google
• whether your sales team follows up
• whether one new customer is worth $500 or $50,000
• whether your market is Winnipeg or all of Canada
• whether you’re starting from scratch or already well established

So while percentages can provide context, they shouldn’t make the decision for you.

A marketing budget tells you what you can spend. A marketing strategy tells you where it belongs.

Before allocating a dollar, ask:

What does the business need to accomplish next?

Not eventually.
Next.

Maybe you need:

• more qualified leads
• larger commercial accounts
• more recurring revenue
• better awareness in a new market
• more opportunities for the sales team
• greater retention from existing customers
• stronger positioning before pursuing larger contracts
• a fuller pipeline for next year

Those goals should determine where the budget goes.

Imagine a commercial service company that already receives plenty of inquiries.

The problem is that most are small jobs, while the company wants larger recurring contracts.

Spending more money generating the same kind of inquiries probably won’t solve the problem.

The business may need better positioning, stronger case studies, more targeted outreach and greater visibility among property managers or operations leaders instead.

More marketing isn’t always the answer. Sometimes different marketing is.

The economics of the customer matter.

A company where the average new customer is worth $1,000 annually should think differently about acquisition than a company where a new contract could be worth $100,000 over several years.

Higher customer value often gives a business more room to invest in:

• relationship development
• targeted advertising
• video
• educational content
• events
• sales tools
• account-based outreach
• longer-term brand building

It also changes how quickly you should expect the marketing investment to pay back.

For recurring or relationship-driven businesses, lifetime value matters.

A customer may begin with a relatively modest project and later become a major account.
Or one satisfied commercial customer may introduce you to three others.

That doesn’t mean spending recklessly because “it’ll all work out eventually.” It means understanding what a good customer is genuinely worth before deciding what you’re willing to invest to acquire one.

The value of the customer should influence the cost you’re willing to accept to reach them.

Consider the Sales Cycle

How quickly do people buy what you sell?

This has a major impact on marketing budget allocation.

A customer looking for an emergency service may make a decision today.
A property manager considering changing janitorial companies may watch a supplier for months before the contract comes up for renewal.
A manufacturer considering a major equipment purchase could take even longer.

Those businesses shouldn’t judge marketing the same way.

Longer Sales Cycles Need More Than Lead Generation

If your customers take months to decide, your marketing needs to help you stay familiar during that period.

That might include:

• useful LinkedIn content
• email communication
• case studies
• videos
• industry events
• remarketing
• sales follow-up
• educational articles
• customer stories

Not everything needs to generate an immediate inquiry.

Some marketing exists so that when the buyer is finally ready, your company isn’t a stranger.

If the sales cycle is six months, expecting marketing to prove itself in two weeks doesn’t make much sense.

Evaluate How Much Awareness You Already Have

This is where businesses can get marketing budgets very wrong.

Some companies have excellent reputations but weak marketing infrastructure.

Others have beautiful marketing materials and almost no market awareness.

Those aren’t the same problem.

Business A: Great Reputation, Terrible Website

Imagine a Winnipeg company that has been operating for 25 years.

They have strong relationships.
Customers refer them regularly.
People in their industry know the name.

But their website looks like it was built when Blackberry was still the phone everyone wanted.

The services are outdated.
The photos don’t reflect the current company.
It’s difficult to use on a phone.
And the contact process is clunky.

Should this business pour its entire budget into awareness campaigns?

Probably not yet. People already know the company.

First, fix what they find when they look it up.

Recommendation: Put more of the budget into website improvements, messaging, proof of experience and conversion.

Business B: Good Website, Nobody Knows They Exist

Now imagine a newer company.

Great website
Clear positioning.
Excellent work.
Strong testimonials.
Everything looks professional.

There is just one small problem. Hardly anyone visits the website.

This business doesn’t need another website redesign. It needs visibility.

Recommendation: Invest more heavily in search, targeted advertising, networking, partnerships, social visibility, content and direct outreach.

Business C: Lots of Leads, Terrible Follow-Up

Now imagine another business.

Website works.
Ads work.
Phone rings.
Forms come in.

The owner says:

“We need more leads.”

But when you look closer, inquiries aren’t being returned quickly.
Quotes go out with little follow-up.
Old prospects disappear into inboxes.
Nobody is tracking anything.

This business does not need to buy more leads. It needs to stop wasting the ones it already has.

Recommendation: Put money into CRM processes, sales support, follow-up systems, training and clear responsibility before increasing lead generation.

Same marketing budget.

Three completely different recommendations.

That’s why I don’t believe in marketing budgets built from templates.

Where you’re competing also affects where your marketing dollars belong.

A local Winnipeg commercial service company has a very different challenge from an ecommerce business selling across North America.

Local businesses may benefit heavily from:

• Google visibility
• local search
• industry associations
• networking
• referrals
• LinkedIn
• sponsorships
• customer reviews
• direct sales activity

A company selling nationally may need more investment in search, content, digital advertising and scalable lead generation.

Bigger Geography Usually Means More Competition

Expanding your service area doesn’t automatically expand your opportunity.

It also expands the number of companies competing for attention.

If you’re entering a new market, budget for the fact that nobody there knows you yet.

You may have 30 years of experience in Winnipeg.

To a buyer in Calgary, you’re still the new company.

Look at the Competition, But Don’t Copy Their Budget

Competitors are worth watching. Copying them isn’t a strategy.

You don’t know:

• what they’re spending
• whether their campaigns are profitable
• what internal resources they have
• whether their customers are the same as yours
• whether their ads are actually generating business

Still, competitors can reveal gaps.

If every serious competitor appears prominently in Google search and you don’t, that deserves attention.
If they all sound exactly the same, there may be an opportunity to differentiate your message.
If nobody in your industry is producing useful educational content, that might be an opening.

Competitor activity should inform your decisions, not make them for you.

This is a big one.

Marketing can create demand. But can the business handle it?

If your team is already stretched thin, doubling lead generation may not be the smartest investment.

If estimates take three weeks to produce, more inquiries may simply create a bigger backlog.
If nobody has time to answer the phone, there’s a problem.
If your sales team is already struggling to follow up, adding another campaign may make things worse.

Sometimes marketing dollars are best spent improving what happens after the marketing.

Capacity Is Part of Marketing Strategy

This can include:

• better intake processes
• CRM setup
• sales materials
• quote templates
• automated follow-up
• customer onboarding
• internal communication
• sales training

Those may not look like traditional marketing.

But if they improve conversion, they directly influence marketing ROI.

Getting more opportunities doesn’t help much if the business can’t properly handle them.

Growing businesses sometimes behave as though every year starts at zero.

It doesn’t.

You may already have valuable marketing assets:

• a good website
• an established email list
• customer reviews
• years of project photos
• strong Google rankings
• a social audience
• customer testimonials
• case studies
• video content
• industry relationships
• a recognizable brand

Before creating something new, ask whether you can make better use of what already exists.

For example, one good customer video can become:

• a website case study
• several social clips
• a sales follow-up piece
• a LinkedIn post
• part of a proposal
• an email campaign
• a testimonial

You don’t always need another asset. Sometimes you need to use the asset you already paid for.

Good marketing budgeting includes getting more mileage from what you’ve already built.

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Where Should the Marketing Budget Actually Go?

There isn’t one universal split.

But there are a few broad categories worth considering.

Foundation

This includes:

• website
• messaging
• branding
• Google Business Profile
• reviews
• sales materials
• tracking

If these aren’t working, fix them before pouring money into traffic.

Awareness

This can include:

• social media
• industry publications
• sponsorships
• networking
• public relations
• video
• educational content

This helps relevant buyers know and remember you.

Demand Generation

This may include:

• Google Ads
• paid social
• SEO
• email campaigns
• direct outreach
• landing pages

This helps turn potential demand into actual opportunities.

Sales Conversion

This includes:

• proposals
• case studies
• follow-up systems
• CRM tools
• sales enablement
• customer proof

This helps turn interest into business.

Retention and Growth

Don’t forget current customers.

Budget may also belong in:

• customer communication
• account reviews
• referral programs
• newsletters
• cross-selling
• customer experience improvements

For many established businesses, the fastest revenue opportunity isn’t a stranger. It’s someone who already trusts you.

The best budget allocation follows the customer journey, not the latest marketing trend.

Property managers, operations managers and business owners are rarely impressed because you spent a lot of money on marketing.

They’re looking for confidence.

They want evidence that:

• you understand their business
• you can solve the problem
• you’ve done it before
• you’ll follow through
• dealing with you won’t create more headaches
• your company is established and credible

That’s why budget needs to include the things that build trust.

Sometimes that’s advertising.
Sometimes it’s an excellent case study.
Sometimes it’s a website that clearly explains your experience.
Sometimes it’s simply a salesperson who follows up when they said they would.

The customer doesn’t care how the marketing budget was divided. They care whether the experience gives them confidence.

Winnipeg is competitive, but it remains a very relationship-driven business market.

People know people.
Property managers talk.
Business owners ask for recommendations.
Industry associations overlap.

Good work gets remembered. Bad work does too.

That means local businesses shouldn’t assume that all marketing dollars need to go into digital advertising.

Your budget might also need to support:

• industry participation
• networking
• sponsorships
• customer relationships
• referral activity
• events
• community visibility
• sales follow-up

Digital marketing matters because people will still look you up.

But in Manitoba, marketing and relationships often work together.

Someone hears about you from another business owner.
Then they Google you.
Then they look at your website.
Then they check LinkedIn.
Then they ask someone else if they’ve heard of you.
Then they call.

Which channel gets credit? All of them helped.

In a relationship market, familiarity gets you considered and credibility gets you shortlisted.

1. What Business Result Do We Need Next?
Be specific. More revenue isn’t specific enough.

2. Where Is the Current Bottleneck?
Is it awareness?
Traffic?
Trust?
Leads?
Sales conversion?
Retention?

Find the constraint before deciding where the money goes.

3. What Is a Good Customer Worth?
Understand average revenue, margin, repeat business and lifetime value. That gives you context for what acquisition is worth.

4. What Have We Already Built?
Don’t pay twice for assets you could be using better. Review your website, database, content, reviews, relationships and existing campaigns first.

5. Can We Handle More Business?
Make sure sales and operations have the capacity to respond before increasing demand. If not, fix that piece first.

Your Marketing Budget Should Solve the Right Problem

There is no universal answer to where a growing business should spend its marketing budget.

And that’s actually good news.

You don’t need to do everything. You need to identify what’s standing between the business you have today and the business you’re trying to become.

Then put the money there.

Sometimes that’s Google Ads.
Sometimes it’s a website.
Sometimes it’s content.
Sometimes it’s sales support.

And sometimes my recommendation is:

Don’t spend money on that yet.

At Cheeky Chimp Marketing, we start by understanding the business because that’s the only way to know what actually deserves the budget.

If you’re trying to decide where to spend this fall, I’ll help you sort out what deserves the budget.

No cookie-cutter percentage required.

Frequently Asked Questions

How much should a small business spend on marketing?
There is no single percentage that is right for every business. Marketing spend should reflect your growth goals, customer value, margins, competition, sales cycle and current marketing foundation. Budget percentages can provide a benchmark, but they shouldn’t replace a business-specific strategy.

How should a small business marketing budget be allocated?
Start by identifying the biggest barrier to growth. If awareness is low, invest in visibility. If traffic is strong but conversion is weak, improve the website and sales process. If leads are plentiful but follow-up is poor, fix sales follow-up before increasing lead generation.

Should a growing business spend more on its website or advertising?
It depends on the current problem. If the website is unclear, outdated or difficult to use, fix it before paying to send more traffic there. If the website already performs well but few people know the company exists, advertising and awareness may deserve more of the budget.

What marketing provides the best ROI for a small business?
The highest-return marketing channel varies by business. Search advertising may work well when customers actively search for the service, while relationship marketing, LinkedIn, SEO, email or direct sales may perform better in longer B2B sales cycles. ROI should be evaluated based on how customers actually buy.

Should marketing and sales share a budget?
They don’t necessarily need to share one accounting line, but the strategies should work together. Marketing generates awareness and interest; sales converts opportunities into customers. Investments in CRM systems, proposals, case studies and follow-up can improve the return on marketing spending.

How do I know if I’m wasting my marketing budget?
Look for spending that has no clear purpose, doesn’t reach your target customer, can’t reasonably influence a business objective or continues simply because “we’ve always done it.” A marketing assessment can help separate investments worth keeping from activities that deserve to be changed or stopped.