How much should a builder spend on marketing?

A builder should spend about 1–3% of revenue on marketing as a starting rule: the Association of Professional Builders puts the median at 1% and the strongest performers at 4% or more. The better answer is your own number: back-solve it from your revenue target, contract value, close rate and cost per enquiry.

Rules of thumb (each sourced inline or taken from the worked example below):

• The median residential builder spends 1% of revenue on marketing, and 29.2% spend nothing at all, according to APB’s SORCI Report 2026 summary.
• In the same APB data, builders spending 1 to 3% of revenue reach a 25–26% gross markup; builders at 4% or more reach a 29% markup and 9% net profit.
• The largest US full-service remodelers averaged roughly 3% of revenue on marketing in the 2018 Remodeling 550; replacement contractors averaged roughly 10%.
• In the worked example, lifting enquiry-to-consult from 15% to 35% and consult-to-contract from 20% to 40% cuts the enquiries needed for 12 jobs from 400 to 86.
• At 160 enquiries a year, every extra $100 of cost per enquiry adds $16,000 to the budget, about 0.27% of a $6 million revenue target.

How much should a builder spend on marketing as a percentage of revenue?

Published surveys put builder marketing spend between nothing and 4% or more of revenue, with 1% the APB median, about 3% the 2018 Remodeling 550 mean for full-service remodelers and about 10% for replacement contractors. The sources measure different firms, years and definitions, so treat them as a range, not a target.

The APB figures are the most current and builder-specific. Note that APB reports the same 20% figure for non-advertisers as a gross markup in one place and a gross margin in another, and markup and margin are not the same measure (APB itself says a 25% margin equals a 33.3% markup). One APB worked example also assumes an advertising figure that excludes wider marketing costs, so check whether a benchmark counts website, software and agency fees before you compare.

The Builder Budget Back-Solve: how to work out your own number

The Builder Budget Back-Solve turns a revenue target into a marketing budget in five steps: jobs needed, consults needed, enquiries needed, media cost, then fixed marketing costs. Every input below is a labelled assumption; replace each with your own numbers from the last 12 months.

1. Jobs needed = revenue target ÷ average contract value.
2. Consults needed = jobs ÷ consult-to-contract close rate.
3. Enquiries needed = consults ÷ enquiry-to-consult rate.
4. Media budget = enquiries × cost per enquiry.
5. Total budget = media + fixed costs (website, CRM, agency management), then divide by revenue to compare with the 1–3% rule.

The weak funnel needs 4.65 times the media spend of the strong one ($120,000 against $25,800) to sign the same 12 homes. That gap is the whole point of the back-solve: a percentage rule assumes an average funnel, and your funnel is not average.

How does cost per enquiry change a builder’s marketing budget?

Cost per enquiry moves a builder’s budget in a straight line: in the mid funnel above, each $100 added to the cost of an enquiry adds $16,000 a year. The table shows where the 1% and 3% lines fall.

The two break-even points are the most you can pay per enquiry before the total budget crosses each line. To stay within 1% of revenue ($60,000), subtract the $24,000 of fixed costs and divide by 160 enquiries: ($60,000 − $24,000) ÷ 160 = $225 per enquiry. To stay within 3% ($180,000): ($180,000 − $24,000) ÷ 160 = $975 per enquiry. We found no credible public cost-per-enquiry benchmark for builders with a stated method, so measure your own. For what a custom home lead costs by channel, see how much a custom home builder lead costs in Australia, and for why cheap enquiries can cost more per signed job, see cheap leads for builders.

What does the 1–3% marketing rule miss for builders?

The 1–3% rule misses four things a builder controls: contract size, funnel conversion, the referral share of work, and the delay between spend and signed contracts.

• Contract size. A builder signing twelve $500,000 homes and one signing sixty $100,000 renovations both hit $6 million, but the renovator needs five times the jobs and, at the same rates, five times the enquiries.
• Funnel conversion. The back-solve table shows the same revenue costing 0.83% or 2.4% depending on two conversion rates.
• Referral share. APB reports that referral-dependent builders (80% or more of leads from referrals) produced $3.75 million in revenue on 55-hour weeks, against $6.5 million on 46-hour weeks for paid-first builders. A referral-heavy builder can run below 1% and still grow, until referrals slow.
• Time lag. Enquiries for a new home often sign months later, so this year’s budget pays for next year’s contracts. Set the budget from the target you want in the following year, not the current one.

Count the right costs before you compare. Media spend, agency management, website and CRM all belong in “marketing”; estimator time spent on tenders that never sign does not appear in any of these percentages but is real money.

When should a builder spend more than 3% on marketing?

A builder should spend above 3% of revenue when the back-solve says so and the funnel behind the spend is already converting, not to make up for weak follow-up.

• Spend more when you are entering a new region or product, when referrals have fallen below the share that used to fill your calendar, or when your contract value is small and you need many jobs. APB’s top band (4% or more) sits here, with the highest markups in its data.
• Spend more, carefully, if you sell replacement-style work: the 2018 Remodeling 550 replacement contractors averaged about 10%.
• Do not spend more when under 1 in 5 consults sign or enquiries wait days for a reply. In the back-solve, fixing the weak funnel to mid halves the budget ($144,000 to $72,000) with no change in ad prices.

What does it take to run the back-solve yourself?

Running the Builder Budget Back-Solve takes about a day the first time and an hour a month after that, provided every enquiry, consult and signed contract is logged against its source.

The hard part is the data, not the maths. You need a CRM or spreadsheet that records where each enquiry came from, whether it reached a consult, and whether it signed; tracking which leads become booked jobs covers the set-up. In the back-solve, the two conversion steps move the budget more than ad prices do, and the enquiry-to-consult step is where late replies and missed follow-up show up. Speed to lead for trade businesses explains why the first reply matters, and quoted-but-not-signed jobs already in your file can be worked again through database reactivation before any new spend. LeadsNow, which has booked 50,769+ AI-booked sales appointments since 2017, works on that step: following up enquiries by AI call, SMS and email and booking the consult. The wider channel picture for builders sits on the builder lead generation guide.

Builder marketing budget: frequently asked questions

How much should a builder spend on marketing?

Most builders should start at 1–3% of revenue and then check it with the Builder Budget Back-Solve: revenue target divided by contract value, close rate and enquiry-to-consult rate, multiplied by cost per enquiry, plus fixed costs.

Is 3% of revenue too much for a small builder to spend on marketing?

Not necessarily. The 2018 Remodeling 550 found the largest US full-service remodelers averaged about 3%, and APB’s 2026 data links spend of 4% or more with the highest markups. A small builder with low contract values often needs more, not less.

Does the marketing percentage include the website and agency fees?

It should, if you want a fair comparison. Count media, agency management, website and CRM together; one APB example treats advertising separately from wider marketing costs, so read each benchmark’s definition first.

What is a good cost per enquiry for a builder?

There is no credible public benchmark that applies across markets and contract sizes. In the worked example, a builder with 160 enquiries a year stays within 3% of a $6 million target up to $975 per enquiry and within 1% up to $225.

Should a builder cut marketing when work is busy?

Cutting when busy can empty the pipeline months later, because builder enquiries sign with a delay. APB’s SORCI extract reports that builders who spend nothing on advertising earn 20% gross margins against 28% for those advertising across three or more channels.

Sources

1. Association of Professional Builders, “How Much Should You Spend On Advertising Your Building Company?” (12 May 2026, citing the SORCI Report 2026)
2. JLC, “Remodeling 550: Full-Service Firms Average a 3% Spend on Marketing” (4 June 2018)
3. JLC, “Replacement Firms Average 10% on Marketing Spending, Remodeling 550 Indicates” (5 June 2018)