What Is COM%? The One Number Every Marketing Dollar Answers To
COM% is cost of marketing as a percentage of revenue — what you spent to market, divided by the revenue that marketing produced. It is the number that ends arguments about whether a channel is “working.” Most contractors have never calculated it. The ones who do stop wasting money within a quarter.
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The Definition
COM% = total marketing cost ÷ the revenue that marketing produced, expressed as a percentage. Spend $30,000 on a channel that produces $300,000 in closed revenue, and that channel runs a 10% COM%. Spend $30,000 on a channel that produces $50,000, and it runs 60% — and it’s eating the profit of every job it books.
That’s the whole formula. The discipline is in two places: counting all the cost, and attributing the revenue honestly. Marketing cost isn’t just ad spend — it’s agency fees, lead-platform fees, the salary of anyone whose job is marketing, sponsorships, the wrap on the truck. If a dollar exists to make the phone ring, it goes in the numerator.
Calculated at the company level, COM% tells you whether your marketing is healthy. Calculated at the channel level, it tells you what to do next — which is where the number earns its keep.
The Operating Bands
Target. Flag. Cut.
These are the bands we run every channel against — the same discipline we used operating marketing inside an eight-figure Northwest Ohio home services company:
The target band
A healthy home services company in growth mode runs its cost of marketing here. Below this band you’re usually coasting on referrals and under-investing in the pipeline that feeds next year. Inside it, marketing is earning roughly seven to ten dollars for every dollar spent.
The flag line
Any channel running above 25% gets flagged and investigated. Sometimes it’s a new channel still ramping and the trend line earns it more time. Sometimes it’s a leak — bad targeting, unanswered calls, a conversion problem — that’s fixable. Either way, it doesn’t get to hide.
The cut line
Over 50%, the channel gets cut — no matter how busy it keeps the phone. This is the rule that’s hardest to follow, because a channel can be over the cut line and still feel productive. Busy and profitable are not the same thing. Spending half a job’s revenue to win the job isn’t marketing; it’s discounting with extra steps.
Why Not CPL or ROAS?
Cost per lead is the number most contractors track, and it’s the easiest number to be fooled by. A $40 lead that never books costs infinitely more than a $200 lead that closes a $12,000 job. CPL measures the price of a phone ring. COM% measures the price of revenue — which is the only thing the P&L cares about.
ROAS is closer, but it’s an agency-side metric: it usually counts platform spend only and ignores the fees, the salaries, and the channels that don’t run through an ad account. Word of mouth has no ROAS. A truck wrap has no ROAS. They both have a COM%.
That’s the real power of the number: it’s channel-agnostic. Google Ads, TV, an aggregator, a canvassing program, and a billboard can all be ranked on the same scale. The argument about which channel is “better” becomes arithmetic.
What the Number Does in Practice
Two decisions from our own operating record, both made by COM% and nothing else:
It killed a TV campaign. We ran a $20K/month broadcast TV test into a new market for six months. The phone rang. The brand impressions piled up. And the cost of marketing ran past 100% of the revenue the channel produced — every job it booked cost more to win than it paid. The bands made the decision before sunk-cost feelings could: it was over the cut line, so it got cut. The full Field Report on that campaign is here.
It restructured a lead budget. A national aggregator’s leads looked productive until the channel-level COM% put them next to organic search. We cut the aggregator’s spend in half, and organic grew 2.4x the same year — same total demand, owned instead of rented, at a fraction of the cost per revenue dollar. That Field Report is here.
Neither decision required a marketing philosophy. They required one number, calculated honestly, compared against a band.
How to Calculate Yours This Week
1. Add up the full numerator. Twelve months of: ad spend, agency and software fees, lead-platform fees, marketing salaries or the marketing share of hybrid roles, sponsorships, print, wraps, events. Everything whose purpose is generating demand.
2. Pull attributable revenue. Closed revenue, not leads and not estimates. This is where most contractors hit the real problem: they can’t connect jobs back to sources, because nothing in their stack tracks it. If that’s you, the fix is a tracking foundation, not a spreadsheet heroic — we wrote a Field Report about running marketing with no dashboard, and why it costs more than any ad budget.
3. Divide, then divide again by channel. The company-level number tells you if there’s a problem. The channel-level numbers tell you where it is. Rank every channel by COM% and the next budget decision usually writes itself.
One caveat: brand-building channels and compounding channels (SEO, reviews, content) front-load cost and back-load revenue, so judge them on a trailing trend, not a single bad month. The bands still apply — they just apply to the trend line.
COM% Questions
What counts as marketing cost?+
Everything spent to generate demand: ad spend, agency fees, lead-platform fees, marketing software, marketing salaries (or the marketing portion of hybrid roles), sponsorships, print, vehicle wraps, and events. If the dollar exists to make the phone ring, count it. Undercounting the numerator is the most common way contractors convince themselves a channel works.
Is 10–15% an industry standard?+
It’s our operating band, built from running marketing inside an eight-figure home services company — not a number from a textbook. Published “industry averages” vary wildly because they’re measured inconsistently. What matters more than the exact band is having one, applying it to every channel the same way, and acting when a channel crosses it.
My COM% is under 10%. Isn’t that good?+
Sometimes — and sometimes it means you’re coasting. A very low COM% usually means most revenue comes from referrals and repeat work, which is rented stability: it depends on conditions you don’t control and it caps growth at the speed of word of mouth. If you want to grow, a sub-5% COM% is usually a signal to invest, not to celebrate.
How do I measure channels that don’t track cleanly, like a truck wrap?+
Imperfectly but honestly. Ask every caller how they heard of you, track promo codes or dedicated numbers where you can, and accept a margin of error. A roughly-right COM% on every channel beats a precise number on two channels and blindness on the rest.
Should a new channel be held to the same bands?+
Yes, with a defined ramp. Give a new channel a test window and a budget cap, watch the trend, and hold it to the bands at the end of the window. The TV campaign we killed got six months. That’s the point of the system: tests get a fair shot and a hard deadline, not an open-ended budget.
I can’t attribute revenue to channels at all. Where do I start?+
With source tracking, before anything else. A CRM field for lead source, call tracking on your main numbers, and the discipline to record it on every job. Until revenue connects to sources, every marketing decision you make is a guess — and the free audit below is built to show you exactly where your tracking gaps are.
Find Out What Your Marketing Actually Costs.
The free audit calculates your COM% — company-wide and by channel — and shows you which spend is earning and which is leaking. Most contractors have never seen this number. It changes the conversation.
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