Guide · Marketing
How to work out if your marketing is actually making you money
By Stu ClarkUpdated 6 August 20266 min read
Short answer
To know if your marketing is working, compare the profit from the jobs it wins with what it costs you. Count the leads it brings in, how many turn into paying customers, and the profit on those jobs, then measure that against your spend. If the profit beats the spend, it is working. If not, fix it or stop.
Busy is not the same as profitable. Plenty of tradespeople pour money into ads, directories and a fancy website, feel run off their feet, and still could not tell you whether any of it actually made them money. If that is you, you are not daft. Nobody ever showed you the sum.
Here it is. It takes five minutes and it will change how you spend.
What is marketing ROI?
Marketing ROI is simply the money your marketing makes you set against what it costs. Spend a certain amount, win some work, keep some profit. If the profit is bigger than the spend, you are winning. If it is not, you are paying to be busy.
The trap is judging it on the wrong number. Reach, followers, clicks and even revenue can all look healthy while your bank balance says otherwise.
The number that actually matters
Two figures decide everything:
- Cost per customer — what you paid to win one paying job.
- Profit per customer — what that job actually puts in your pocket after materials and labour.
As long as the profit is comfortably bigger than the cost, the marketing is paying its way, and you can afford to do more of it. That second half is the bit most trades miss: good marketing does not just break even, it tells you where to put more money.
How to work out your marketing ROI
Five steps:
- Add up your spend. Everything you paid to get found and get enquiries for the period.
- Count your leads. The calls, forms and messages that spend brought in.
- Work out how many became customers. Your lead-to-job rate.
- Take the profit, not the revenue. Average job value times your profit margin.
- Compare profit with spend. That gap is your return.
A worked example
Say you spend $500 a month and it brings in 20 enquiries. You win 40% of them, your average job is worth $600, and you keep 40% profit on the work:
| Marketing spend | $500 |
| Leads | 20 |
| Customers won (40% of 20) | 8 |
| Cost per lead ($500 ÷ 20) | $25 |
| Cost per customer ($500 ÷ 8) | $63 |
| Profit (8 × $600 × 40%) | $1,920 |
| Profit for every $1 spent | ≈ $3.84 |
Just $63 to win a customer that makes you nearly $2,000 in profit. That is not a cost to trim. That is a machine you should be feeding.
Run your own numbers in the
Marketing ROI Calculator. It does the maths and tells you straight whether your marketing is paying its way.
Why revenue-based ROI is a con
Watch how agencies report results. Nearly always in revenue. “We generated $20,000 in work.” It sounds brilliant, right up until you remember that most of that went straight back out on materials and labour. Judge marketing on the profit you keep, not the money that passed through your account. Same jobs, very different story.
What to do with the number
- Making money? Spend more, carefully, and watch your cost per customer as you scale.
- Losing money? Do not just kill the spend. Usually the leak is a low conversion rate or a channel bringing time-wasters, not the marketing itself.
- Track it monthly. One month is noise. The trend is the signal.
Frequently asked questions
How do I know if my marketing is working?
Compare the profit from the jobs it wins with what it cost you. Count the leads, how many became customers, and the profit on those jobs. If the profit is bigger than the spend, it is working. The Marketing ROI Calculator does the sum for you.
What is a good return on marketing for a trade business?
There is no magic number, but you want the profit to comfortably beat the spend, with many trades aiming to make back at least three to five times what they put in. What matters most is the trend: cost per customer falling, return rising.
Should I judge marketing on revenue or profit?
Profit, always. Revenue is flattering because it includes the money that goes straight back out on materials and labour. A high-revenue channel with thin margins can make you less than a smaller one done well.
What should I include as marketing spend?
Everything you pay to get found and get enquiries: online ads, directory listings, flyers and vehicle signage, your website, and any agency or freelancer fees. Materials and labour on the jobs are not marketing, they come out in your margin.
The takeaway
You would never take on a job without knowing roughly what it costs and what it pays. Marketing is no different. Do the sum once, and you stop guessing, stop wasting money on the stuff that does not work, and start feeding the stuff that does.