How Much To Spend On Marketing and Where To Spend It!

How Much To Spend On Marketing and Where To Spend It

Recently on one of our insider coaching calls, one of my clients asked a question…

“Where should I be spending dollars, and how much should I be spending?”

Now, this question is an interesting one because ultimately it comes down to knowing 2 things.

2 Things You Need To Know Before You Spend Money On Marketing

1. Know Your Ideal Customer

You have to start with understanding and knowing on a deep level who your IDEAL customer is. When you understand exactly who your ideal customer is, you can figure out where they are in large concentrated groups and then work out how can you get in front of as many of them at one time. This way it becomes easier and much more targeted, which will provide faster and better results.

2. Know Your Allowable Acquisition Cost

The second thing that you need to know is your allowable acquisition cost.

This is what will control how much money you can afford to spend to buy a customer because that’s what marketing is…

Marketing is the act of buying customers!

and I personally believe that good marketing is…

The act of buying customers at the lowest price, and the highest return!


This means if you spend a $100.00 dollars, and that gets you one client, you bought that customer for a $100.00 dollars. If you spent that same $100 dollars and you end up getting two clients, well that means you spent $50 dollars per client to buy the customer.

So how do you figure out your allowable acquisition cost?

Take your gross profit of your first sale, and then that becomes how much you can afford to spend to buy a client (assuming you have more things to sell them than just one purchase).


If you only generally make one sale to a customer, then you’re allowable acquisition cost will have to be much lower than your gross profit on the first sale or start having more things to sell because otherwise you’ll never make any money.

Put $1 in and Take $2 out

When you understand your allowable acquisition cost, and you understand how much you’re spending on marketing and the results you’re getting.

Plus you know your ideal customer, and where they are, you’ll be able to spend as much money as you want, and you just basically put in $1.00 and get 2.00 back consistently time and time again.

About The Author

Carl Taylor

Carl is the Author of Red Means Go! and founder of Business Builders Academy. He invests in and runs a number of businesses, and regularly teaches business skills through online training and live speaking events.