A plumbing company owner recently told me he’d been spending 8% of revenue on marketing for three years.
“I’m right in the middle of the 7–10% range everyone talks about,” he said. “So why am I only growing 4% a year?”
The answer was simple: 8% is a maintenance number.
He wasn’t funding growth. He was funding stability.
Industry benchmarks are useful as a starting point. They provide a sanity check and a reference point. But they’re backward-looking by nature. They tell you what similar companies spent to stay where they were, not what your company needs to spend to get where you want to go.
The right marketing budget isn’t a percentage you copy from an article.
It’s a number you calculate based on where you are, where you’re going, and what it will cost to close the gap.
This matters most for established plumbing, HVAC, and electrical companies that already have steady demand and want to grow intentionally, not just spend more and hope for the best.
The Three Growth Modes and What They Actually Cost
Every home service company operates in one of three modes. Each one requires a fundamentally different level of marketing investment.
Maintenance Mode
Maintenance mode is about protecting what you’ve already built. You’re satisfied with your current revenue level and market position. The goal is stability: replacing customers lost to attrition and staying visible enough that the phone keeps ringing.
Maintenance mode typically requires 5–7% of revenue. This covers a consistent digital presence, basic reputation management, and enough traditional marketing to remain top of mind in your service area.
This is where many companies live longer than they realize.
Growth Mode
Growth mode means you’re actively expanding. You’re adding trucks, hiring technicians, and targeting 15–30% annual growth. You’re not just replacing lost customers. You’re systematically adding new ones faster than you lose them.
Growth mode generally requires 7–10% of revenue, but the allocation changes. A much larger share goes toward customer acquisition channels designed to reach people who don’t already know you.
This is where systems, tracking, and disciplined allocation start to matter more than creative ideas.
Domination Mode
Domination mode is about becoming the default choice in your market. You want to be the company people think of first when they have an emergency or a major replacement need.
This level of ambition typically requires 10–15% of revenue, sometimes more. You’re not just competing for leads. You’re trying to take market share from established competitors who are fighting just as hard to keep it.
The most common mistake companies make is expecting domination-mode results while funding maintenance-mode budgets. The math simply doesn’t work.
The Reverse-Engineering Framework
Instead of starting with a percentage and hoping it produces results, disciplined operators start with the outcome they want and work backward.
Here’s the framework.
Start with your revenue goal.
If you’re currently at $3 million and want to reach $4 million in the next 12 months, you need $1 million in new revenue.
Convert that revenue into jobs.
If your average ticket is $850, that $1 million requires about 1,176 additional jobs, or roughly 98 extra jobs per month beyond your current volume.
Convert jobs into leads.
With a 40% close rate, you’ll need 245 additional leads per month to produce those 98 jobs.
Calculate the marketing investment.
If your blended cost per lead across channels is $85, generating those leads requires $20,825 per month in incremental marketing spend.
Now add that to your maintenance budget.
If maintaining your existing $3 million business requires $15,000 per month (roughly 6%), your total monthly marketing investment becomes $35,825.
That’s nearly 14% of current revenue.
That number often feels uncomfortable. But it isn’t arbitrary. It’s the mathematically accurate investment required to achieve the growth you defined.
And importantly, this is not a permanent percentage. It’s a temporary investment required to reach a higher revenue base. Once you grow into that new level, the percentage naturally normalizes.
Why the Math Matters More Than the Percentage
When companies budget by percentage instead of by goal, they end up with numbers that feel reasonable but have no connection to outcomes.
A $5 million company spending 8% invests $400,000 annually.
A $2 million company spending 8% invests $160,000.
If both want to add $1 million in revenue, the required lead volume, job count, and conversion math are nearly identical. But the percentage-based approach creates two very different realities.
The larger company may be overfunded for its actual goal, wasting budget on channels that don’t need it.
The smaller company is structurally underfunded, spending an entire year wondering why an “industry standard” budget isn’t producing aggressive growth.
Reverse-engineering the budget exposes what’s actually required and allows you to make an informed decision about whether the investment makes sense.
The Market-Adjusted Variables That Change the Equation
The framework above uses averages. Your actual numbers depend on several market-specific factors.
Competition intensity has a direct impact on cost per lead. In lightly competitive markets, leads might cost $60. In crowded markets where multiple companies are bidding on the same keywords and mailing the same neighborhoods, costs can exceed $150.
Market maturity matters as well. Underserved or emerging markets often have lower acquisition costs because attention is cheaper. Saturated markets require more investment just to be seen.
Average ticket size changes everything. A company with a $2,500 average ticket needs far fewer jobs to hit the same revenue goal than a company averaging $850. Higher-ticket businesses can often grow faster at lower percentages because each conversion carries more revenue.
Close rate is the most underestimated variable. Improving close rate from 35% to 45% reduces required lead volume by more than 20%. In many cases, investment in sales training or estimate follow-up systems produces higher returns than additional lead generation.
The Seasonal Adjustment Layer
Home service demand isn’t evenly distributed throughout the year, and your marketing spend shouldn’t be either.
Peak seasons are when customers are actively searching. Cost per lead often drops because demand creates momentum. This is when you should lean in. Increasing spend by 20–40% during peak periods allows you to capture motivated buyers when competitors are capacity-constrained.
Shoulder seasons are about consistency. Maintain visibility without overspending on lower-intent demand.
Off-seasons create opportunity. Many competitors slash budgets when demand slows, reducing competition for attention. Strategic off-season campaigns for replacements, maintenance agreements, and planned upgrades can generate leads at lower costs, if you’re willing to invest when others pull back.
The Investment Threshold Reality Check
Sometimes the math produces a number you simply can’t, or won’t, invest. That’s not failure. It’s information.
When this happens, you have three real options.
First, adjust the goal. Slower growth funded properly beats aggressive goals funded inadequately.
Second, improve efficiency. Lowering cost per lead or improving close rate can dramatically change the required budget.
Third, extend the timeline. Reaching $4 million in two years instead of one may be far more sustainable.
What you cannot do is invest $250,000 and expect $400,000 results. No amount of optimism or vendor promises changes the math.
Putting It All Together
Here’s the exercise worth doing this week:
- Define your growth goal in actual dollars and timeline
- Calculate the jobs and leads required based on your real numbers
- Confirm realistic cost per lead in your market
- Add the growth investment to your maintenance requirement
- Compare the result to what you’re currently spending and what you can sustain
The number you arrive at may be higher or lower than expected. Either way, it’s grounded in reality, not an industry rule of thumb with no connection to your ambition.
The 7–10% guideline is a useful reference. But the companies that consistently outgrow their competitors don’t budget by averages.
They budget by intent.
Once you see the math, the decision isn’t “Can I afford this?”
It’s whether you’re willing to fund the growth you say you want.
