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Marketing ROI calculator
Most contractors know what they spend on marketing and not what it produced. The gap between those two is where budgets get cut for the wrong reasons.
Method reviewed by Darren Lim, US CPALicence CPA.74253602Free · No email required · Nothing leaves your browser
Your numbers
Cost per booked job
$221
Against $609 of gross profit per job. Paying on the first job, before any repeat work.
Three numbers, and most people only have the first
Spend is easy. Leads are usually countable. The one that gets skipped is the booking rate — how many of those leads turned into work — and without it the other two mean nothing.
A channel producing cheap leads that never book is more expensive than one producing costly leads that convert. Cost per lead is a vanity number on its own; cost per booked job is the one that decides where the next dollar goes.
Judge on gross profit, not revenue
A $6,000 job at a 40% gross margin contributes $2,400 towards marketing, overhead and profit — not $6,000. Comparing spend against revenue makes almost any campaign look like a triumph, which is how contractors end up funding channels that lose money at volume.
The honest comparison is marketing spend against the gross profit the work produced. Anything above one is contributing; anything below is buying revenue with your own money.
Count the repeat, but count it honestly
A first job is rarely the whole value. Service customers come back, maintenance plans renew, and a satisfied customer refers. A channel that looks marginal on first-job profit can be strongly positive once repeat work is counted.
The danger is using that as a permanent excuse. If a channel has been justified for two years by repeat business nobody has ever measured, it is being justified by a belief. Track revenue by original source over time — it is a tagging job, not an analytics project, and it settles the argument.
Common questions
- What should I count as marketing spend?
- Everything the channel costs: media, agency or contractor fees, the tools, and any commission or bonus tied to those leads. Excluding the agency fee because it is "overhead" is the most common way a channel is made to look better than it is.
- How do I attribute a lead that came from three places?
- Imperfectly, and that is fine. Ask on the form or on the phone, accept that the answer is rough, and look at the trend rather than the decimal. A directionally right number reviewed monthly beats a perfect attribution model nobody maintains.
- What return should I be aiming for?
- It depends on how much repeat business a customer brings and how much spare capacity you have. What matters more than a target is direction: track it monthly, and cut or scale on three months of data rather than on one bad week.
What we do about it
Revenue tagged by source where your systems allow it, so marketing spend can be set against the gross profit it actually produced rather than against revenue or against a feeling.