The rule of thumb is contractors should spend 8% of gross revenue on marketing. $1 Million in revenue requires $80,000 of marketing to ensure you maintain your current level of earnings. $80,000 of marketing money could provide a full-time marketer and some internet activity. Not bad! OR, $80,000 could be spent on fees to TPAs and additional admin support to manage that work.
What’s the difference? Right here! You can spend marketing money on work you hope to get, or spend your marketing dollars on work you have completed. Intuitively we like the sound of paying only for work completed. Do the work, and then pay for the referral received. Direct sales staff are known for underperforming and underproducing. There are all kinds of factors that go into a successful sales staff that are absent in most of them. The bottom line is this, you may not get much for your marketing dollars if you hire marketing staff … but paying for what you have already done is guaranteed ROI. I like doing business this way, not the other way!
Reference: The Revenue Generator – The Ultimate Revenue Booster for Your Business Sales Growth