In this solo, podcast‑style YouTube episode, Bradley Hamner walks small‑business owners through the fundamentals of setting a marketing budget and the core metrics needed to manage and scale marketing spend. He explains that the budget should be based on the target revenue for the upcoming year—not last year’s figures—and recommends allocating 5‑10% of that target to marketing. He then outlines the essential metrics: the total marketing budget, cost per lead, customer acquisition cost (both a pure marketing CAC and a loaded CAC that includes sales commissions), and customer lifetime value (LTV). Hamner stresses the importance of the LTV:CAC ratio, advocating a 10:1 target (or at most spending one‑third of LTV on acquisition) as a rule of thumb for sustainable growth. Throughout, he references a free “Know Your Numbers” toolkit hosted at blueprintos.com/assets for deeper metric tracking and previews a follow‑up episode on building a marketing dashboard. The episode blends practical calculations, strategic advice, and encouragement for owners to monitor these baseline numbers to balance growth with profitability.
Chapters
The more that you want to grow, the more you have to invest in people and in marketing. Whenever you do that, it has a downward pressure on profit. And so it's so important to know some of these baseline metrics. What's your customer lead? What's your customer acquisition cost? And what is your lifetime value? All right, let's talk about marketing metrics. So last week I introduced this idea of— we started talking about marketing plans. All right, so to go back for just a second, when we were talking about marketing plans, number one, we were talking about the budget that you have, and your marketing budget needs to be set by what your target revenue is for this year. So let's use some rough math. Obviously, I went to Auburn, so got to use some easy Auburn math here. Let's say the business last year in 2025 did a million bucks, and then you set a 25% year-over-year growth target. So that means for this next coming year, at the time I'm recording, let's just say it's for 2026. You want to grow to $1.25 million. So $1,250,000, 25% year-over-year growth. And let's say that you have been spending, or investing, I should say, 8% of your revenue to marketing. Well, the question is, do you set the 8% based on last year's million-dollar target? Or do you set it on this year's target? And the answer is, I didn't know this myself, but the answer is you actually set it on this year's target. Because if you set it on last year's target, it may be possible that you don't actually hit the $1,250,000 target that you have. So number one, when you're setting a marketing budget, you want to set it based on this year's target revenue. Number 2, what percentage do you want to invest of that target revenue? Well, you heard me just mention 8%. You're somewhere going to be typically at least $500,000. If— excuse me, $500,000, 5%, somewhere between 5 and 10% of your target revenue number. So If it's— you're at a million and you want to invest 5%, so you're going to be somewhere around $50,000 in marketing that you're going to spend. Or if you're at 8%, you're going to be at $80,000. If you're at 10%, you're obviously going to be at $100,000. So somewhere in that range. And the more you want to grow, the more you have to do two things. You have to invest in people. But you also have to invest in marketing. It's ludicrous to say, I'm going to grow 26% this year, but I'm only going to invest 2%. I mean, has it happened? Clearly it's happened before, but it doesn't— it's not sustainable. It's not something that's going to be sustainable long-term. So you have to make the right amount of investment. So the second part of how a marketing plan is, well, what's your marketing strategy? AKA, where are you going to invest the money? But also, where are you going to invest your time and energy? Some marketing doesn't actually cost money. It's just your effort or your team's effort. So when we talk about strategy, we're predominantly talking about where are you going to invest that $50,000 or $100,000? That's predominantly what we're talking about, but it also means where are you going to give time and energy and effort into as well. This week, we're talking about marketing metrics. Now, this could go very deep, and I debated before I started hitting record about how far should I go with this? Do I do a Marketing Metrics 101, or do you end up doing a marketing, marketing metrics 201 or 301. Well, I'm good for the purposes of this podcast. I'm going to try to keep it very simple. What is the most basic things that absolutely I feel are universal for small business owners for you to know? But if you would like to get a more comprehensive list of all of the different metrics that we have, I've got a tool for you. In fact, I've just got a a template for you, and that is called Know Your Numbers. Now, I've actually done a podcast on this before, but if you would like to know what numbers you actually need to know in business, not just your marketing metrics, you can get that totally free. It's in my Above the Business Toolkit. So just go to blueprintos.com, blueprintos.com/assets, and there you'll see the toolkit And the Know Your Numbers template is inside the toolkit on— in my Above the Business Circle community. So I look forward to seeing you there. It's in Circle. You'll find it in the toolkit and you can get access to the, to the PDF, the Word document or Google Doc, whatever suits your fancy. Okay. So what marketing metrics do we want to know? Well, number 1, is what is the marketing budget? I was just actually today recording or doing a coaching session with a business owner that last year they were just under $2 million. This year their target is to hit $2.2 million. And I said, great, what's your marketing budget? He was like, I don't know. I think it's about 7%. So I did some quick math and said, okay, whatever 7% of $2.2 million is. And he was like, I don't know, that doesn't seem right. You need to know what your marketing budget is. What is that number? Number 2, you want to know, and we're going to talk about how to track all of this next week when we start talking about creating a marketing dashboard. So we'll get there. Next week. But number one, you want to know what your marketing budget is. Number two, you want to know your cost per lead. How much are you spending in marketing and how many leads are you getting? Now, this is an important metric, but it's not honestly the most important metric. The most important metric that we're going to really want to know is what is our customer acquisition cost? Now there's two different ways to calculate a customer acquisition cost, or in short is called CAC. Number one, you can calculate it on a marketing customer acquisition cost. So you just take a look at how much did we spend in marketing for the year and how many new customers did we sell? That's a marketing customer acquisition cost. There's also one that is kind of a, a total or an all-encompassing customer acquisition cost that takes into things like, you know, your, your commissions for your sales team. That's a loaded customer acquisition cost. That's often what the one that Alex Hormozi is talking about as well. But if you talk to just marketers, they want to know how much did you spend in marketing? Let's say $100,000. How many customers did you get in spending that $100,000? And that will give you a marketing customer acquisition cost. Well, then that begs the question of, well, what is the correct customer acquisition cost? Is it $200? Is it $1,000? Is it $10,000? It depends on your business and it depends on the value of your customers. And that leads me to One of the third marketing metrics that you need to know, you need to know what the lifetime value of a client or a customer is for you. If you're in a business that has recurring revenue, say like an insurance agency, when you have a customer that's paying you that first year, you're going to make— let's say that customer pays, you know, $3,000 and you make $300 off of that customer. Well, the good thing about a business like that is you get that customer for several years. And if you keep that customer, say, for 5 years, that customer is worth to you $1,500. The absolute baseline, the most you can spend to acquire a customer, the most in any business, is a third of the lifetime value. I'll say that again. If a customer is worth $1,500 to you, The most you could spend to acquire that customer is $500, but we don't want to even get close to that. So what's a kind of good rule of thumb that we want to go off of? 10 to 1. 10 to 1. If a customer is worth $1,500, you really want to be able to spend about $150 to acquire that customer. If that's the case, that typically allows you to be able to scale. So my question is, what's your lifetime value? What is your customer acquisition cost? And what is your cost per lead? You know, one of my favorite shows for a long time is Shark Tank. And what did they say? Typically, there's a product— businesses, not all the time, but oftentimes they are— they will ask questions like, what does it cost you to build, to make this, this water bottle? What does it cost you to fulfill? But they'll also ask, what is your customer acquisition cost? And it's so important that they know it. If it's so important that it's on Shark Tank, it's so important for us to be able to know because money— it costs money. In fact, it costs a lot of money to scale a business. See, I used to think that growth equaled profit, but I come to find out over the years growth eats profit. The more that you want to grow, the more you have to invest in people and in marketing. And at least initially, whenever you do that, it has a downward pressure on profit. And so it's so important to know some of these baseline metrics. What's your cost per lead? What's your customer acquisition cost? And what is your lifetime value? If we know our customer acquisition cost and we know our lifetime value, then we can understand what the CAC to lifetime value ratio is. In fact, this is probably one of the single most important metrics in business. And again, if you're a follower of Alex Hormozi and his YouTube video, he talks about this metric a ton. And for good, with good reason. It is arguably the most important metric when it comes to growing and scaling a business. What is your LTV, lifetime value, to CAC ratio? What's your lifetime value to CAC ratio? And that goes back to that, you know, is it 3 to 1 or 10 to 1? We want to at least be 10 to 1. That's what we want to shoot for. If we can be more than that, even better. I hope this served you this week. There are so many other marketing metrics to be able to know, and if you would like to get access to that and several other business metrics, I have a tool called Know Your Numbers. Go to blueprintos.com/assets and you can get access to my Above the Business Toolkit, that tool completely for free. Next week we talk about how do we create a marketing dashboard, something that allows us to actually keep track of where we're spending our money and how certain channels where we're spending money are performing. I look forward to seeing you then. Till next time, lead well and go be great.
