Solved: Realistic Marketing Budget (Data-Driven Plan Inside)

Hi there,

Thanks for reaching out!

Happy to give you some initial thoughts on your question about marketing budgets and the cost per lead in Vienna. Tbh, you're asking a question I hear a lot, but it's probably the wrong one. The idea of a single "average CPL" for a city is a bit of a myth, and chasing it will likely lead you down a very expensive and frustrating path.

The real issue isn't finding a magic number, but building a predictable system for acquiring customers profitably. Instead of trying to find an external benchmark, we need to build one from inside your own business. It's a bit of a mind set shift, but it's the only way to build a marketing budget that actually works. Let me walk you through how I'd approach this.

We'll need to look at why 'Average CPL' is a dangerous metric...

First off, let's get this out of the way. There is no such thing as an average cost per lead for Vienna, or any other city for that matter. It's a meaningless metric. Think about it: a lead for a £20 haircut is going to cost something completely different to a lead for a £50,000 industrial machine. A lead for an emergency plumber searching on Google at 2am will have a different cost to someone casually browsing Instagram for bespoke furniture.

They are all "leads" in "Vienna", but their value and the cost to acquire them are worlds apart. The cost is influenced by dozens of factors:

• Industry: Are you in a hyper-competitive space like insurance or law, or a niche B2B service? Competition drives up ad costs.
• Ad Platform: A lead from a LinkedIn ad targeting C-level executives will almost always cost more than a lead from a Facebook ad targeting a broad interest group.
• Targeting Specificity: The more niche your audience, often the higher the cost to reach them.
• Your Offer: A lead for a free, high-value PDF guide will be much cheaper than a lead for a "Request a Demo" form.
• Ad Creative & Copy: Better ads get better engagement, which lowers your costs.
• Seasonality: Many industries see costs fluctuate throughout the year.

Looking for an average is like asking "how long is a piece of string?". You'll just get a number that has absolutely no relevance to your specific situation and it will lead you to make bad decisions, either by setting your budget too low and giving up too early, or setting it too high and burning through cash on an unprofitable campaign.

Instead of looking outwards for a useless average, we need to look inwards and calculate what a lead is actually worth to you. This is where the real work begins, and it starts with understanding the lifetime value of your customers.

I'd say you need to forget CPL and focus on LTV first...

Here's the most important shift in thinking you need to make. The real question isn't "How low can my CPL go?" but "How high a CPL can I afford to acquire a truly great customer?". The answer to that is your Customer Lifetime Value (LTV). LTV tells you the total profit you can expect to make from a single customer over the entire duration of their relationship with your business. Once you know this, everything else falls into place.

To calculate it, you need three pieces of data from your business:

1. Average Revenue Per Account (ARPA): What do you typically make from a customer on a monthly or annual basis? Let's say it's €500 per month.
2. Gross Margin %: What's your profit margin on that revenue? After accounting for the direct costs of servicing that customer (cost of goods sold, direct labour, etc.), what percentage is left? Let's assume it's 75%.
3. Monthly Churn Rate %: What percentage of your customers do you lose each month? This is crucial for subscription or recurring revenue businesses. If you lose 2 out of 100 customers each month, your churn rate is 2%.

The calculation is simple but incredibly powerful:

LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Using our examples: LTV = (€500 * 0.75) / 0.02 = €375 / 0.02 = €18,750

This number, €18,750, is the truth. It's the real gross profit value of each customer you acquire. Now, suddenly, we have a concrete number to work with. We're no longer guessing. A healthy business model often aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means you can afford to spend up to €18,750 / 3 = €6,250 to acquire a single new customer and still have a very profitable model.

This calculation completely changes the game. It frees you from the tyranny of chasing cheap, low-quality leads and allows you to invest confidently in acquiring high-quality customers. That lead from a LinkedIn ad that costs €150 doesn't seem so expensive anymore when you know the customer it could turn into is worth over €18,000 to your business.

I've built a small calculator for you below so you can plug in your own numbers and see what your LTV is. Play around with it. See how a small reduction in churn or a small increase in your margin can dramatically affect your LTV.

You probably should work backwards from your goals...

Now that we know what a customer is worth, we can build a realistic marketing budget. This is a simple process of working backwards from your revenue target. Stop picking a budget out of thin air, like €1,000 or €5,000 a month, becuase it 'feels right'. Let's use maths.

Here's the process:

1. Revenue Goal: How much new monthly recurring revenue (MRR) do you want to add this quarter? Let's say your goal is €30,000 in new MRR.
2. Customers Needed: Based on your ARPA (€500), how many new customers do you need to hit that goal? €30,000 / €500 = 60 new customers.
3. Leads Needed: What is your lead-to-customer conversion rate? Let's say your sales team closes 1 out of every 10 qualified leads. That's a 10% conversion rate. To get 60 customers, you'll need 60 / 0.10 = 600 qualified leads.
4. Affordable CPL: We already know our maximum affordable CAC is €6,250. Let's be a bit more conservative and aim for a CAC of €3,000 to maintain healthy margins. With a 10% lead-to-close rate, your maximum affordable Cost Per Lead (CPL) is €3,000 * 10% = €300 per lead.
5. Total Budget: Now we have all the pieces. To get 600 leads at a target CPL that is profitable for the business, you need a budget. But instead of using the *maximum* CPL, you should start with a more realistic target. Based on my experience with B2B campaigns, a good starting CPL could be anywhere from €50-€200 depending on the platform. Let's aim for €150 CPL. So, 600 leads * €150/lead = €90,000 for the quarter, or €30,000 per month.

And there you have it. A marketing budget of €30,000 per month. It's not a guess. It's not based on an 'average'. It's a number derived directly from your growth goals and your business's unique economics. It's an investment, not an expense. This approach also gives you your most important Key Performance Indicator (KPI): as long as you're acquiring qualified leads for under €300, the campaign is profitable. Even if the CPL is €250, you're still well within your profitable range. Now you can manage your campaigns with confidence.

Here's another calculator to help you work through this process for your own business.

You'll need an offer that doesn't suck...

So we have a target CPL and a budget. Are we ready to run ads? Not quite. This is the part where most businesses fail, and it has nothing to do with bidding strategies or pixel optimisation. It's the offer. The number one reason campaigns fail is a weak offer that provides little value and asks for too much commitment.

The "Request a Demo" or "Contact Us for a Quote" button is probably the most arrogant Call to Action in marketing. It assumes your prospect, a busy decision-maker, has nothing better to do than book a meeting to be sold to. It is high-friction, low-value, and immediately positions you as just another commodity vendor. You are asking for their most valuable asset – their time – in exchange for a vague promise of a sales pitch.

Your offer’s only job is to deliver a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution. It must solve a small, real problem for them for free to earn you the right to solve their bigger problems for money.

What does a good offer look like? It depends on your business:

• For a SaaS company: A free trial (no credit card) or a freemium plan is the gold standard. Let them use the actual product. Let them feel the transformation. The product becomes the salesperson.
• For a marketing agency: A free, automated website audit that uncovers their top 3 SEO opportunities. It's instant, valuable, and directly demonstrates your expertise.
• For a data analytics platform: A free 'Data Health Check' that scans their database and flags the top 5 critical issues.
• For a fractional CFO service: A free "Cash Flow Projection" template or a 15-minute consultation to analyse their biggest financial bottleneck.

Notice the pattern? All these offers give value upfront. They are low-friction and high-value. They build trust and demonstrate expertise before ever asking for a sales meeting. I've seen the impact of the offer firsthand. For one client in the environmental controls industry, improving their offer cut their cost per lead by 84%. I remember one client, a medical job matching SaaS, who had a CPL of over £100. We rebuilt their funnel around a better offer and brought it down to just £7. That is the power of a great offer.

Before you spend a single euro on ads, you MUST fix your offer. What small, painful problem can you solve for your ideal customer for free, right now?

You need to find your customer's nightmare...

Once you have a great offer, who do you show it to? This is the final piece of the puzzle: targeting. And just like with CPL, most people get this wrong. They define their customers by sterile demographics: "Companies in the finance sector in Vienna with 50-200 employees." This tells you nothing of value and leads to generic, ineffective ads that speak to no one.

You need to define your customer by their pain. By their specific, urgent, expensive, career-threatening nightmare. Your Ideal Customer Profile (ICP) isn't a demographic; it's a problem state.

• Your Head of Sales client isn't just a job title; she's a leader terrified of missing her quarterly target because her team is buried in manual data entry instead of selling.
• Your Head of Engineering client isn't just a job title; he's terrified of his best developers quitting out of frustration with a broken, inefficient workflow.
• For a logistics company, the nightmare isn't 'needing better routing'; it's 'a critical shipment being delayed, costing a key client millions and destroying a decade-long relationship.'

When you understand their nightmare, you know exactly what to say in your ads and where to find them. The message becomes incredibly specific and powerful. Instead of saying "We sell CRM software", you say "Stop wasting hours on manual data entry and let your sales team get back to selling. Our CRM automates 90% of the busywork."

Once you've isolated that nightmare, you can find the watering holes where these people gather online. What niche podcasts do they listen to? What industry newsletters do they actually read? What influencers do they follow on LinkedIn? What software tools (like Salesforce or HubSpot) do they already use? This intelligence is the blueprint for your targeting strategy on platforms like LinkedIn and Meta. This is how you pre-qualify your audience before they even see your ad, ensuring you're paying to reach people with the exact problem you solve. A campaign we ran for a B2B SaaS client on LinkedIn achieved a $22 CPL targeting specific decision makers in niche industries – a cost that would be impossible with broad, demographic-based targeting.

So, to recap the whole process:

I've detailed my main recommendations for you below:

As you can see, determining a realistic marketing budget is a far more involved process than just finding an 'average CPL'. It requires a deep, honest look at your business's economics, your goals, and most importantly, your customers. It's not easy, and it requires a specific expertise to get right.

Getting this framework right is the difference between ads that burn money and ads that build an empire. The process I've outlined is exactly how we approach campaign strategy for our clients, ensuring every pound or euro spent is a calculated investment towards profitable growth. We've used this to help clients reduce acquisition costs by over 80% and scale revenue significantly.

If you'd like to walk through these calculations and strategy points for your specific business, we offer a completely free, no-obligation initial consultation. We can jump on a call, look at your numbers, and give you a concrete action plan. It's often the most valuable 20 minutes a business owner can spend on their marketing.

Hope this helps!

Regards,

Team @ Lukas Holschuh