A common benchmark is 7–8% of gross revenue. The SBA recommends it for businesses under $5M in revenue with 10–12% net margins (Investopedia, citing the SBA). For plumbers, start there, spend more while you're growing into new markets, and judge the budget by cost per booked job.
The 7–8% rule, by revenue
This is simple arithmetic on the SBA benchmark, not a guarantee of results.
| Annual revenue | 7% of revenue (per year) | 8% of revenue (per year) | 7–8% per month |
|---|---|---|---|
| $500,000 | $35,000 | $40,000 | $2,917 – $3,333 |
| $1,000,000 | $70,000 | $80,000 | $5,833 – $6,667 |
| $2,000,000 | $140,000 | $160,000 | $11,667 – $13,333 |
| $3,000,000 | $210,000 | $240,000 | $17,500 – $20,000 |
| $5,000,000 | $350,000 | $400,000 | $29,167 – $33,333 |
Source of the percentage: SBA guidance as reported by Investopedia. The SBA ties the rule to businesses with 10–12% net margins. If yours are thinner, fix pricing and close rate before adding spend.
When to spend more (or less) than 7–8%
- More: you're entering a new city, adding a service line, or have spare tech capacity and a proven cost per booked job.
- Less: your schedule is already full, your close rate on calls is poor, or you can't yet track which channel produced a job. Fix tracking first.
- Seasonality: Plumbing demand is steadier than HVAC, but emergencies (burst pipes in freezes, backups after storms) create spikes. Keep an always-on emergency budget and raise it during freezes in your market.
Where home services businesses actually spend
From a survey of nearly 1,000 home services professionals (Scorpion home services survey):
| Channel | Share of businesses investing |
|---|---|
| Digital advertising (Meta, Google, TikTok, X) | 75% |
| 42% | |
| Out-of-home | 41% |
| SEO | 37% |
Only about a third invest in SEO. That's the gap: most of your competitors are renting visibility with ads, not owning it.
In the same survey, 43% of plumbing businesses said direct messages were their best-performing call to action, well above the 32% average (Scorpion). Put text and chat next to your phone number.
Want this done for your plumbing company? Book a free growth call and we'll review your Google profile, site and ads.
Book a Growth CallWhere the budget goes for plumbers
There's no one right split. Start with the channels that bring calls fastest, keep the ones that compound running, and move money toward whatever shows the lowest cost per booked job in your own tracking.
| Channel | What it does | When to lean on it |
|---|---|---|
| Google Local Services Ads + search ads | Immediate calls for emergency repair, water heaters, drain cleaning, sewer line, repipe | From day one, and harder during your busy season |
| Google Business Profile + local SEO | Compounding map-pack and organic calls | Always on; it compounds the longer it runs |
| Reviews + reputation | Drives map rank and close rate | After every job, starting now |
| Retargeting / Meta | Brings back people who searched but didn't call | Once you have steady site traffic to bring back |
| Tracking (call tracking, CRM tagging) | Without it, you can't tell which channel works | Before you scale any spend |
The numbers to track
| Metric | Formula | What it tells you |
|---|---|---|
| Cost per lead | Spend ÷ leads | What each inquiry costs you, by channel |
| Lead-to-booked rate | Booked jobs ÷ leads | Whether your phones and follow-up are converting |
| Cost per booked job | Spend ÷ booked jobs | The number to budget against |
| Average ticket | Revenue ÷ jobs | How much a booked job is worth |
| Marketing % of revenue | Spend ÷ revenue | How you compare with the 7–8% benchmark |
Water heaters, sewer lines and repipes carry most of the margin. Measure cost per booked high-ticket job, not just cost per call.
Proof
Anderson Plumbing, Heating & Air (Oklahoma City). Owner Geoff Goodwill says his HVAC pay-per-click leads cost "440 bucks or something like that per lead" (2:54), and estimates "7 or 800 new customers" since starting with Stryker (8:08). Owner's figures. Read the case study.
For how that budget turns into calls, see how we market plumbing companies. The Anderson Plumbing case study shows one owner's numbers before and after SEO.
FAQ
What percentage of revenue should plumbers spend on marketing?
A common benchmark is 7–8% of gross revenue for businesses under $5M with healthy margins, per the SBA (Investopedia). Growing companies often spend more. Mature companies with full schedules often spend less.
How much should a $1M plumbing company spend on marketing?
At 7–8%, about $70,000–$80,000 a year, or roughly $5,800–$6,700 a month.
Is it better to spend on ads or SEO?
Ads bring calls in days but stop when the budget stops. SEO and your Google Business Profile take longer but compound. Most plumbers need both, shifting toward SEO as it matures.
What should my cost per lead be?
It depends heavily on market and service. Track your own cost per booked job by channel and compare it to your average ticket.
Should I count my Google Business Profile management as marketing spend?
Yes. Count agency fees, ad spend, software (call tracking, review tools) and in-house marketing payroll so your percentage is honest.