THRoWINg MoNEY To THE WINd? HoW TO SpEND YoUR MARKETINg BUDgET WISELY

It’s easy to feel like your marketing budget is slipping through your fingers. Without a clear understanding of how much you should spend and where that money is going, it’s like throwing cash into the wind and hoping something sticks. 

But there’s a better way to ensure every penny is accounted for and spent wisely - by getting a solid grip on your numbers and reverse engineering your marketing efforts.

Here’s how to do just that.

1. Know your Tolerable Cost per Acquisition (TCPA)

The first step in spending your marketing budget wisely is determining your tolerable cost per acquisition (TCPA)  - the amount you can comfortably spend to acquire a new client. This number should be realistic and reflect the true value a client brings to your consultancy over time.

Once you know your TCPA, you can work backwards to calculate other key metrics:

• Cost per proposal: How much are you willing to spend to get a proposal in front of a potential client?
• Cost per meeting: How much can you afford to spend to secure a meeting?
• Cost per lead: How much are you investing to generate a quality lead?

By breaking your numbers down like this, you’ll have a clear sense of what you can afford at each stage of the client acquisition process. More importantly, these calculations allow you to measure your marketing success and make data-driven decisions on where to allocate your budget.

2. Work backwards from the numbers

With your TCPA, proposal, meeting and lead costs in hand, you now have a roadmap for your marketing efforts. You can determine which marketing channels - whether paid or organic - are feasible for your budget and which ones may be too costly.

For instance, if you’ve determined that your cost per lead should be no more than £200, you’ll be able to see if platforms like Google Ads or LinkedIn Ads offer a return that justifies that spend. On the other hand, organic channels, such as content marketing or SEO, may take longer to generate leads but could offer better long-term value without the high upfront costs.

By focusing on the numbers, you can avoid wasting budget on channels that aren’t delivering results.

3. Hold your partners accountable

If you’re working with marketing partners - whether it’s an agency running paid campaigns or an outbound service reaching out via email or LinkedIn - your cost metrics provide a powerful accountability tool. You can monitor their performance against your target cost per lead or proposal, ensuring they’re delivering the value you expect for your spend.

With the numbers in place, you’ll know if your agency is helping you acquire clients at or below your TCPA. If they’re not, you can make informed decisions about whether to continue with them or explore other options.

4. Regularly refine your approach

Your marketing strategy isn’t a set-it-and-forget-it exercise. Conversion rates fluctuate, markets change and what worked yesterday might not be as effective tomorrow. That’s why it’s crucial to regularly refine your approach.

Use tools like dashboards to track key metrics - such as conversion rates at different stages (leads, meetings, proposals) - and identify where your strategy may need tweaking. Maybe your cost per lead is too high, or perhaps you’re getting leads, but they aren’t converting to meetings. These insights allow you to optimise your marketing budget and adjust your strategy based on real-time performance.

5. Evaluate and adjust over time

Once you’ve set your TCPA targets and implemented your marketing strategy, give it some time to generate data. Don’t be discouraged if things don’t go perfectly from the start. It’s common to need adjustments along the way. Maybe your initial assumptions about cost per acquisition were off, or perhaps you’re underspending and could afford to push harder to attract higher-quality leads.

The key is to evaluate your performance over time and make data-backed adjustments to fine-tune your marketing budget. If the numbers are sound, you might discover you can acquire clients for less than expected - driving a better return on investment (ROI) - or that you need to spend more to achieve the results you’re after. Either way, knowing your metrics will ensure you spend your budget wisely.

Final thoughts

Spending your marketing budget wisely comes down to understanding your numbers and letting them guide your decisions. By working backwards from your cost per acquisition and refining your strategy as you go, you’ll avoid throwing money to the wind and ensure every pound is pulling its weight.