How much should a professional services firm spend on marketing?

Every firm owner asks it eventually. What should we be spending on marketing? There is no single number, but there is a clear way to find yours.

What the benchmarks actually say #

You will see benchmarks quoted, so here are the real ones. The most-cited global figure is Gartner's: in 2026, companies spend an average of 7.8 per cent of revenue on marketing, barely moved from 7.7 per cent the year before. Worth knowing, and worth reading carefully. That average comes from large enterprises overseas, most turning over more than a billion dollars. It is not a target for a firm of ten or thirty people in Australia.

The Australian picture is different. Small firms here typically spend far less, often only two to three per cent of revenue. Read that as a warning if you like, but not as a target either.

Here is the problem with all of these numbers. An average hides the two things that actually decide yours: what a client is worth to your firm, and how much of your marketing leaks before it becomes a client. Two firms the same size can rationally spend five times apart. Use the benchmarks as a sanity-check, then set your number from your own economics.

Start with what a client is worth #

You already think this way about your clients. Apply it to your own firm.

Take one client. What do they pay you a year, and for how many years do you keep them? Multiply the two and you have the fees a client is worth over the relationship. That is turnover, not profit, so take it to gross margin. What is left is the real contribution one client makes to your firm.

That number is your ceiling. You can rationally spend a fraction of it to win one client and still come out well ahead. The firm that knows this number spends with confidence. The firm that does not spends with fear, or not at all.

Then look at what it costs to win one #

Marketing spend only makes sense against a conversion rate.

Of the enquiries you got last month, how many became clients, and what did the marketing that produced them cost? Most firms cannot answer, because nobody built the tracking. That is the first thing to fix, and it costs nothing but attention.

Once you can answer it, the budget almost sets itself. If a known amount of spend wins a client worth many times that in margin, spending more is not a risk. It is the obvious move.

A simple way to set a starting number #

Work forward, not from a percentage.

Decide how many new clients you want this quarter. Multiply by what it costs to win one today. That is your floor. If you do not yet know the cost to win one, start small, measure everything, and let the real number replace the guess within a month or two.

Then sense-check it against the ceiling from earlier. If the plan spends a comfortable slice of the margin those clients bring, it is sound. If it spends more than the clients are worth, the problem is rarely the budget. It is the conversion.

Why the budget is wasted if the firm leaks #

The most expensive mistake is spending more into a firm that loses what it catches.

If enquiries sit unanswered over the weekend, if there is no follow-up, if nobody knows which channel produced the client, then a bigger budget just buys more waste. Fix the leaks first, and the same spend produces more. This is worth reading before you raise a dollar of budget: where firms lose the leads they already pay for.

The number is different for your kind of firm #

The number lands differently for different kinds of firm, because client value and buying patterns differ. We have worked each one through: accounting firms, law firms, financial planning practices and managed IT services firms.

The method is the same in each case. Only the client value and the buying pattern change: a compliance client kept for years, a mix of one-off and repeat legal matters, an ongoing advice relationship, or a monthly IT contract. Start from your own version of those and the percentage takes care of itself.

Where AI visibility fits the budget #

One more shift worth budgeting for. Buyers now ask AI who is good before they search, and being the named answer costs attention rather than media. It compounds over time rather than stopping when you stop paying. Paid ads bring clients now; AI visibility lowers what you need to spend later. Most firms should do a little of both. See why your firm may be invisible to ChatGPT.

Common questions about marketing budgets #

Isn't there a rule of thumb, like a percentage of revenue?

The most-cited global benchmark is about 7.8 per cent of revenue (Gartner, 2026), though that is a large-enterprise average. Australian small firms typically spend far less, often two to three per cent. Both are context, not targets. They ignore what a client is worth to you and how well you convert, which is what should actually set your number.

What should a small firm spend if it has no data yet?

Start from what you can measure, not a percentage. Pick a modest number you can run for a quarter, tag every enquiry so you learn your cost to win a client, and let that real number set the next budget. An educated first guess you measure beats a benchmark you copy.

Does the right number differ by profession?

Yes, because client value and buying patterns differ. A managed IT firm's monthly contracts and an accounting firm's multi-year compliance clients change the maths. We have worked the question through for accounting, law, financial planning and managed IT firms.