How much should an IT services firm spend on marketing?
The right number falls out of two things: what a client is worth to you over the life of the contract, and how well you turn enquiries into signed clients. A firm with sticky monthly contracts can spend far more, and far more safely, than one selling one-off jobs. Start with your own economics, not an average.
There is no magic percentage. Anyone who gives you one without asking about your firm is guessing.
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 managed IT firm in Perth.
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. For a managed contract, a client is a monthly figure compounding over years, not a single sale. Two firms the same size can rationally spend very differently. Use the benchmarks as a sanity-check, then set your number from your own economics. This is the managed-IT version of a general question; here is how much a professional services firm should spend on marketing.
Start with what a client is worth #
You quote clients on value. Do it for your own firm.
Take one managed client. What do they pay a month, for how many years do they stay, and what is your margin? A client at a few thousand a month across several years is a large contribution figure, far larger than the first invoice suggests.
That number is your ceiling. You can rationally spend a fraction of it to win one client and be well ahead. The firm that knows this number spends on growth with confidence. The one that does not underspends, or does nothing.
Then look at what it costs to win one #
Spend only makes sense against a conversion rate.
Of the enquiries you had last month, how many became signed clients, and what did the marketing that produced them cost? Most firms cannot say, because nobody built the tracking. That is the first fix, and it costs only attention.
Once you can answer it, the budget nearly sets itself. If a known spend wins a client worth many times that over the contract, spending more is sound.
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 that cost, start modest, measure everything, and replace the guess with the real number within a month or two.
Then sense-check against the ceiling. If the plan spends a comfortable slice of the contract margin those clients bring, it is sound. If it spends more than they are worth, the problem is usually conversion, not budget.
Why the budget is wasted if the firm leaks #
The most expensive mistake is spending more into a firm that loses what it catches.
An enquiry left overnight, no follow-up, no idea which channel produced the client: a bigger budget just buys more waste. Fix the leaks and the same spend produces more signed clients.
When a buyer asks AI for a managed IT provider, is your firm named?
Where AI recommendation fits #
One shift worth budgeting for. Buyers now ask AI which provider to call before they search, and being the named answer costs attention rather than media. It compounds instead of stopping when you stop paying. It also shows the evidence of capability that switchers look for. Ads bring enquiries now; AI visibility lowers what you need to spend later. Most firms should do some of both. See how to get your IT services firm recommended by ChatGPT.
Questions providers ask #
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 over the contract and how well you convert, which is what should actually set your number.
We have never tracked cost per client. Where do we start?
Tag every enquiry at the source and follow it through to a signed client. Once you can see cost per client by channel, every budget question gets easier.
Ads or being found by AI?
Both, in proportion. Ads produce enquiries now. AI visibility compounds, lowers your cost to win over time, and shows the capability switchers are looking for.