By Freedom Marketing Group · Published
We won't tell you to spend a specific amount. Your budget should come from your revenue goals, your expected conversion rates and how much you can afford to test without pressure.
Work backward from your goal
Sales needed = revenue goal ÷ revenue per sale
Qualified conversations needed = sales needed ÷ close rate
Contacts needed = qualified conversations ÷ qualified rate
Opportunities needed = contacts ÷ contact rate
Budget = opportunities × cost per opportunity
Find your break-even cost
Your maximum affordable cost per opportunity is the net revenue each opportunity produces before lead cost. The Lead Cost & ROI Calculator works it out from your inputs.
Set a test budget first
- Choose a budget you can afford to lose while learning
- Fix the test period, such as two to four weeks
- Work every lead with the same follow-up process
- Judge results on cost per acquisition, not first impressions
Leave room for chargebacks and costs
Include expected cancellations and your operating costs per sale, such as software and processing. Leaving them out makes a campaign look better than it is.
Related resources
Educational information only; not legal, tax or financial advice. Confirm regulatory requirements with qualified counsel and current official guidance.