Every contractor has heard some version of "spend 5% of revenue on marketing." Or 10%. Or 3% if you're established and 15% if you're growing.
These rules of thumb are popular because they're easy, and they're close to useless because they answer the wrong question. Revenue is what happened last year. Your marketing budget is a decision about next quarter, and it should be driven by three things you can actually measure: what a deck is worth to you, how often you close, and how many more you could physically build.
Start with capacity, not revenue
The first question isn't "what can I afford to spend?" It's "how many more decks can I actually build?"
This sounds obvious and it's the mistake we see most often. A contractor turns on advertising, generates more inquiries than the crew can quote, lets half of them go cold, and concludes the marketing didn't work. It worked fine. The business couldn't absorb it.
So before any budget conversation:
- How many decks can your current crew complete per month?
- How many are you completing now?
- The gap is your target. That's what you're buying.
If you build six decks a month and could handle nine, you need three more jobs — not "more leads." That distinction turns an open-ended expense into a specific purchase with a specific price.
The calculation that actually sets your budget
Work backwards from the job. You need four numbers, all of which you already have or can reconstruct from last year's invoices:
- Average job value — total revenue divided by decks built
- Gross margin — what's left after materials and labour, as a percentage
- Estimate-to-close rate — of every 10 estimates you give, how many sign?
- Target cost per acquisition — how much of one job's margin you're willing to spend to win it
Here's a worked example for a builder averaging $14,000 per deck at 35% margin, closing 4 in 10 estimates, who wants 3 extra jobs a month:
| Step | Figure | Working |
|---|---|---|
| Average job value | $14,000 | — |
| Gross margin per job | $4,900 | $14,000 × 35% |
| Willing to spend per job won | $735 | 15% of margin |
| Estimates needed per job | 2.5 | 1 ÷ 40% close rate |
| Max cost per booked estimate | $294 | $735 ÷ 2.5 |
| Monthly budget for 3 extra jobs | $2,205 | 3 × $735 |
That is a real budget with a real justification, and it survives contact with your accountant. It also gives you a hard threshold: if a channel costs more than $294 per booked estimate, it fails. If it costs $80, you should be spending more, not less.
Maximum cost per booked estimate = (average job value × gross margin % × share of margin you'll spend) ÷ estimates needed per close.
Every marketing decision you make becomes a yes or no against that one figure.
How much of your margin should you spend?
In the example above we used 15% of gross margin. That's a reasonable middle position, but the right figure depends on what you're doing:
| Situation | Share of job margin | Reasoning |
|---|---|---|
| Holding steady, schedule mostly full | ~10% | Topping up gaps, not chasing growth |
| Growing deliberately | 15–20% | Buying jobs you wouldn't otherwise get |
| Aggressive expansion / new crew | 25–30% | Buying market share; accept thinner per-job profit |
| New business, no reputation | 30%+ | Every job also buys a review and a portfolio piece |
Notice these are shares of margin, not revenue. A contractor running 20% margins and one running 45% margins cannot sensibly spend the same percentage of revenue, and that's exactly why the revenue rules of thumb mislead people.
Budgeting for a seasonal trade
Decking demand is not flat, and a flat monthly budget wastes money.
In most US markets, homeowners start thinking about the backyard as soon as the weather turns — which means the inquiries that fill your spring schedule are generated before spring. Contractors who switch advertising on in April are bidding against every other contractor who also woke up in April, for homeowners who have already booked someone.
A more sensible shape:
- Late winter (Jan–Mar): spend up. Cheaper competition, and you're filling the spring calendar while others are asleep.
- Peak season (Apr–Jul): spend to capacity, not beyond. If you're booked eight weeks out, extra leads just go stale.
- Late season (Aug–Oct): steady. Push for jobs that can complete before weather closes in.
- Off-season (Nov–Dec): pivot rather than stop. Repairs, staining, and next-spring deposits. Reactivating past customers costs nothing.
Cold-weather markets have a sharper version of this problem than the Sun Belt — a Denver deck builder has a fundamentally shorter window than a Phoenix one, and their budget shape should reflect that.
What counts as marketing spend
Be honest in your accounting or the numbers mean nothing. Marketing spend includes:
- Ad spend (the money that goes to Google or Meta)
- Agency or freelancer fees
- Lead purchase costs (Angi, HomeAdvisor, Thumbtack)
- Website, landing pages, CRM and booking software
- Photography — genuinely worth its own line for a visual trade
- Signs, hangers, vehicle wraps, home show booths
It does not include your time chasing leads, though if you're tracking properly you should know roughly what that costs you too.
Knowing when to scale up and when to cut
Once you have a cost-per-job figure, the decisions get simple:
Scale up when your cost per job won is comfortably under your threshold and you still have crew capacity. If you're winning decks at $400 against a $735 ceiling, you are underspending, and every month you delay is jobs your competitor gets instead.
Hold when you're near capacity. More spend at full capacity converts leads into ill-will — people who called you and got nothing back.
Cut or fix when cost per job exceeds your threshold for two consecutive months. But diagnose before you cut: the problem is more often follow-up than traffic. If leads arrive and nobody calls them for six hours, no amount of budget adjustment fixes that. See why your deck leads aren't converting.
Four expensive mistakes
- Judging a channel in week two. Decking has a long consideration cycle — homeowners think about a $15,000 deck for weeks. Give any channel a full quarter before you rule on it.
- Not tracking which channel produced which job. Ask every single caller how they found you, and write it down. Without this you're guessing.
- Cutting spend the moment you get busy. This is what creates the boom-bust cycle. The work you're doing today came from money spent weeks ago; switch off now and you're engineering a quiet patch in six weeks.
- Spending on ads before fixing follow-up. Budget amplifies whatever system you already have. If that system leaks, you're paying to leak faster.
Where to start
Pull last year's invoices, work out your average job value, margin and close rate, and calculate your maximum cost per booked estimate. That single number turns marketing from an anxious guess into a purchasing decision.
If you'd like a second pair of eyes on it, that's roughly the first half of our discovery call — we'll run your real numbers and tell you what your ceiling should be, whether or not you work with us. Book a call here.
Related: how to price a deck job for profit and where deck leads actually come from.