What Is Cost of Marketing Percentage?

Cost of marketing percentage is the percent of your total revenue that is going directly towards marketing. 

For example, if you're a pool builder completing $100,000 projects and you're spending five thousand dollars on average per project on marketing, your COM% is five percent. And if you do a million dollars a month, your monthly marketing cost is going to be fifty thousand dollars.  That’s a lot of money to throw at your marketing team in hopes that it does something. 

What Costs Are Included in COM%?

This metric covers everything to do with marketing. It encompasses your management costs. If you have someone in-house or you have an agency hired, it accounts for their management costs, it factors in your ad spend costs, and rolls in everything that would fall under marketing. That also means yard signs, QR codes, billboards, radio ads, TV ads; anything that falls under marketing is going to be counted in your COM%. Whether you're paying for marketing packages for small businesses or running everything in-house, it all goes into the same bucket.

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How to Measure Your Cost of Marketing Percentage

Now that you know what COM% is, here is where most builders get the math wrong. The question is not whether to measure monthly or yearly. The answer is both, but differently.

When you're doing annual reviews of your numbers, you should look at your average COM% from a historical basis. However, when you're using real numbers, it's a bit more difficult because with a lot of outdoor living builds, the closing times take a lot longer.

Why Long Sales Cycles Affect Your Numbers

Between the time that a lead comes in to a company to the time they actually sign a contract, it can be anywhere from a month to even six months. Some of our clients, especially the pool builders, won't even sign a contract for another year because a lot of these leads like to get different quotes from different builders just to spread things around. Obviously, that extends the sales cycle. The pool, hot tub, and spa industry generates $62 billion annually according to the Pool and Hot Tub Alliance (PHTA), and seasonal patterns combined with extended decision timelines are standard across that market.

According to IBISWorld, you’re competing against nearly 18,000 other pool construction businesses in the U.S. alone. With just that number alone, it becomes painfully clear that understanding your real COM% becomes a competitive advantage, not just an accounting exercise. It is the difference between running your business and letting your business run you.

Why is that critical for your COM%? Well, the reason is that if you just look at the amount of money you spent in a year and then within that same time period, look at the number of contracts that you've brought in and the revenue those jobs have brought in, your COM% is naturally going to skew upwards because for the last three months, you probably haven't seen the returns of the marketing dollars that you spent three months ago. If you're in December right now, and that's when you're running your numbers, the marketing dollars that you spent in September, October, November, and December maybe haven't brought in the number of installations that they were going to bring in yet because those sales need more time to close.

Using Accrued Revenue for Accurate Measurement

What you want to do is use a combination of your actual revenue and also your predicted accrued revenue as well. What are your previous numbers? What does your previous closing rate look like? What is your expected revenue on your marketing dollars? That way you get a better idea of what your COM% actually looks like when the full picture comes into focus.

Here is a quick example. Say you spent $15,000 on marketing in Q3 and generated 40 qualified leads. Your historical close rate is 30%, and your average project value is $85,000. That means you can reasonably project $1,020,000 in revenue from those leads, even though most of the contracts have not been signed yet. Without factoring in that accrued revenue, your Q3 COM% looks inflated and misleading.

That there is the difference between chucking 50k at a wall and hoping it sticks and knowing your marketing is successfully pulling it’s weight. Once you can see the full picture, every dollar you spend feels intentional instead of uncertain. This is exactly the kind of forecasting that we at Aquathority build into every client relationship, so you're never guessing at your real numbers.

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Why COM% Matters for Your Business

COM% by itself is just a number amongst many more that are impertinent to your success. Paired with your profit margin, it tells you whether your marketing is building your business or quietly bleeding it dry. If you are a pool builder doing $2 million a year and your COM% creeps from 5% to 10%, that is an extra $100,000 walking out the door. At that point, you are not growing; you are funding your marketing at the expense of your own paycheck.

COM% in Context: Pairing It With Your Profit Margin

When we take your COM%, let's say it's 5%, and you know that overall your cost to build a pool, counting your overhead, your cost of goods sold, and everything else is like, let's say 75%. You have 25% of profit margin to work with. If your COM% is 5%, that means your out the door profit is around 20% before tax. According to the U.S. Small Business Administration, small businesses with revenues under $5 million should allocate 7 to 8 percent of gross revenue toward marketing for growth, which gives you a benchmark to measure your own COM% against.

That tracks with broader industry data: the Gartner 2025 CMO Spend Survey found that marketing budgets across all industries have held steady at 7.7% of company revenue, which means pool builders operating at 2% to 5% COM% are actually running leaner than average. Resources like SCORE, an SBA resource partner, also offer free guidance on understanding your profit margins and making smarter financial decisions.

That's how you know whether your marketing budget is working for you.

What Happens When Marketing Eats Your Profit

Let's say your margins are a little bit lower. Let's say your cost of goods sold, your overhead, your cost to build one job is 90%, and your COM% is 5%. You're only making a profit of 5%. If your COM% rises above 10%, then you need to make some changes because now you're losing money on every build that you bring in because maybe your overhead is too high, maybe your cost of goods sold is too high, but your marketing dollars are not allowing you to be profitable because they're eating into your profit margin.

That's where it becomes really essential to look at your COM% and to talk about it in terms of your other percentages that have to do with your full build cost.

Think about two builders doing the same volume. Builder A tracks his COM% every quarter. He knows his $12,500 monthly spend is generating $250,000 in signed contracts, and he can see exactly which channels are pulling their weight. Builder B spends roughly the same but never runs the numbers. By the time Builder B realizes half his budget is going to a channel that stopped converting three months ago, he has burned through $37,500 with nothing to show for it. Same revenue, same spend, completely different outcomes. The only difference is one of them knows his COM%.

Builder A sleeps better. Not because his business is perfect, but because he is not guessing anymore.

We tend to try and track this and predict this for all of our clients. If you need help with that, then get in touch with Aquathority because we have all the right tools and all the right tracking and communication in place with all of our clients to not speak in terms of leads or not speak in terms of clicks or impressions or likes. We talk about things in terms of your marketing ROI: real revenue, real COM%, and we understand the goal of where you want to be.

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What Is a Good Cost of Marketing Percentage for Pool Builders?

Before we wrap up, let's answer the question every pool builder asks: what is a good COM%? Well, that depends on what your profit margins are. If you have a 10% profit margin, then anything above 5% doesn't leave you with much. For pool builders specifically, who typically work between 15% and 25% profit margins according to IBISWorld industry data, in an industry that generated $24.7 billion in U.S. construction revenue in 2025, a good COM% for maintaining your pool business should be between 2% to 5%. 5% being on the high end where you're trying to grow. At Aquathority, we help pool builders pinpoint exactly where they fall on this scale and whether their spend is driving real growth or just burning through margin.

Maintenance vs. Growth Benchmarks

If you're trying to grow into new markets, if you're trying to bring on more pool builds, you might need to push it to 5% to 7% COM%. But if you're just maintaining, keep it between 2% and 5%. And, that's all inclusive: ad spend, management, and everything.

To put that in real dollars: a pool builder doing $3 million a year at 5% COM% is spending $150,000 annually, or roughly $12,500 a month, on all marketing combined. At 7%, that climbs to $210,000 a year, or $17,500 a month. The difference between maintenance and growth mode is often just $5,000 a month in additional spend, but only if that spend is tracked and generating profitable contracts.

That $5,000 is not a cost. It is a bet on the version of your business you are building toward. COM% tells you whether that bet is paying off.

Seasonal Fluctuations in COM%

It does vary during the season. Around November and December, we see COM% figures go up across the board because holiday season hits, people are wanting to save more money, and they're not really thinking about new pools so much. It's the winter. We get fewer signed contracts coming in during that time. But it should fluctuate. That's the nature of a seasonal business. Industry publications like Pool & Spa News regularly report on these seasonal demand shifts across the pool construction market.

This is exactly why smart builders increase their ad spend in January and February, when competition for homeowner attention is lowest and buyers are starting to plan their summer projects. According to HubSpot's research on cost per lead benchmarks, organic marketing channels like SEO and content consistently deliver the lowest customer acquisition costs over time, making off-season content investment one of the highest-ROI moves a pool builder can make.

The builders who win the spring rush are the ones who planted seeds in the winter. Knowing your COM% through the slow months gives you the confidence to keep investing when everyone else pulls back.

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Frequently Asked Questions About Cost of Marketing Percentage

What is cost of marketing percentage?

COM% is the portion of your total revenue allocated to all marketing activities, including ad spend, agency management fees, signage, and any other promotional costs.

What is a good cost of marketing percentage for pool builders?

Pool builders with 15% to 25% profit margins should target a COM% between 2% and 5% for maintenance, or 5% to 7% when actively pursuing growth.

How do you calculate cost of marketing percentage?

Divide your total marketing spend by your total revenue for the same period, then multiply by 100. Adjust for your sales cycle length by factoring in predicted accrued revenue from leads that haven't closed yet.

Why does seasonality affect cost of marketing percentage?

Pool construction leads peak in late winter through spring and decline in fall and winter, causing COM% to fluctuate even when marketing spend remains constant. Fewer signed contracts in the off-season means revenue drops while your fixed marketing costs stay the same.

How much should I spend on marketing?

According to the U.S. Small Business Administration, small businesses with revenues under $5 million should allocate 7 to 8 percent of gross revenue toward marketing for growth. Pool builders maintaining their current volume can often operate effectively at 2% to 5% COM%.

Start Tracking the Metric That Actually Matters

Every month you operate without knowing your COM%, you are making marketing decisions in the dark. Aquathority tracks the numbers that actually matter, forecasts your accrued revenue, and talks to you in dollars and contracts instead of clicks and impressions. If you want to know whether your current spend is building your business or just burning through margin, reach out to us for a consultation.

You did not start this business to wonder where the money went. You started it to build something. Let us help you make sure the numbers prove that you are.

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