Is a marketing agency worth the cost?

It depends on one number you can check: what a lead would have to cost for the fee plus the ad budget to return your target. This calculator works that number out from what a customer is worth to you, then you go and find out what leads actually cost in your market. If they come in under it, the proposal works.

Should the agency fee count as part of my cost per customer?

Yes, and most people leave it out. Comparing ad spend alone to revenue makes cost per customer look roughly half what it is. Fully loaded cost per customer counts the fee, the ad budget, and the tools, divided by the customers the plan actually produces.

How much of my budget should go to the agency fee rather than ads?

There is no universal split, but the ratio decides how hard the media has to work. The fee does not buy clicks, so the larger the fee share, the cheaper every lead must be for the whole arrangement to return the same result. This tool shows you that share and what it demands.

What if I have not run ads before?

Switch to planning mode at the top. You will get what you can afford to pay for a customer and for a lead, without needing any historical cost per lead. The proposal test is sharper if you have run ads, because then there is a real number to check the plan against.

Agency Cost Calculator

Find out what a lead would have to cost for this proposal to pay off.

A fee and an ad budget are easy to compare against other quotes and impossible to judge on their own. This turns an unanswerable question into a checkable one, and tells you what winning a customer really costs once the retainer is counted in.

Before you start

Built for anyone holding a proposal they cannot evaluate.

In about three minutes you get the lead price the plan depends on, your real cost per customer with the retainer counted in, and a plain verdict on whether the split between fee and media makes sense. We will tell you if the deal does not work, including if it is ours.

What you walk away with

The lead price this plan depends on, so you can go and find out whether it is realistic
Your real cost per customer with the fee counted in, which is the number almost nobody calculates
Whether the split between fee and media makes sense, and how you are choosing to count the fee

Have these handy if you can

The monthly fee and ad budget you were quoted
What an average customer is worth to you
Roughly what share of leads become customers

No exact figures needed. Directional numbers still produce a useful read.

What a customer is worth

Everything else on this page is built from this answer.

Do you already know your customer lifetime value?

How do customers pay you?

This shapes the right questions to ask about customer value.

What does a customer pay you, one time?

What it costs you to deliver

The highest-leverage question here. Getting it wrong moves every number below.

The value you just entered, what does it represent?

Give us your variable costs whichever way you know them. Fill in one, skip the other.

Contribution margin %

The share of each sale left after variable costs.

Or, variable cost per unit

What each sale costs you in materials, fulfillment, or contractor time.

Serving one more customer

When you serve one more customer, what actually costs you more?

Your funnel

Estimates are fine. Mark anything you cannot state as Not sure.

Have you closed a paying customer yet?

Lead to qualified rate

Of the leads you get, what share are genuinely qualified?

Qualified to customer close rate

Of your qualified leads, what share become paying customers?

What do you pay for a lead today?

Optional. If you have run ads before, this is what we check the plan against.

Cash and timing

Optional, but the cash question changes what you can actually afford.

Of what a new customer pays you, how much gross profit lands in the first thirty days?

How long is your sales cycle?

Typical time from first contact to a closed, paid customer.

Sales cycle length (months)

What return do you want on acquisition?

The proposal on the table

What you have been quoted, and what it commits you to.

Monthly agency fee

What they charge you to manage it.

Monthly ad budget

What actually goes to the platforms.

Other monthly tool costs

Landing page software, call tracking, CRM seats. Leave blank if none.

Contract term in months

Leave blank if there is no minimum term.

Ramp-up months before results

How long before the account is performing. Two is typical.

See your diagnosis

Last one. We read your numbers back to you and tell you what they mean.

Fill in enough above for us to work out what a customer costs you and what one is worth, and this unlocks. You do not need every field, and Not sure is a valid answer to most of them.

Your results build here as you fill in the form.

Locked · What one customer is worth to you

Unlock with what a customer pays you and what it costs you to deliver.

Locked · The most you can pay for a customer

Unlock with what a customer is worth and the return you want.

Locked · The most you can pay for a lead

Unlock by adding your lead to qualified and qualified to customer rates.

Your verdict

The verdict unlocks once we know what a customer is worth to you.

What this assumes

Customer value is counted only as far out as your horizon. Money arriving later is real but cannot fund acquisition today.
Every lever below moves one thing and holds everything else still. In practice they interact, so treat each as the effect of that change on its own.
The proposal is assumed to perform from the start, apart from the ramp-up months you entered. A slower start pushes payback out.

None of these make the answer wrong, they make it a model. Directional inputs give you a directional answer, which is enough to decide what to do next.

Common questions

Is a marketing agency worth the cost?: It depends on one number you can check: what a lead would have to cost for the fee plus the ad budget to return your target. This calculator works that number out from what a customer is worth to you, then you go and find out what leads actually cost in your market. If they come in under it, the proposal works.
Should the agency fee count as part of my cost per customer?: Yes, and most people leave it out. Comparing ad spend alone to revenue makes cost per customer look roughly half what it is. Fully loaded cost per customer counts the fee, the ad budget, and the tools, divided by the customers the plan actually produces.
How much of my budget should go to the agency fee rather than ads?: There is no universal split, but the ratio decides how hard the media has to work. The fee does not buy clicks, so the larger the fee share, the cheaper every lead must be for the whole arrangement to return the same result. This tool shows you that share and what it demands.
What if I have not run ads before?: Switch to planning mode at the top. You will get what you can afford to pay for a customer and for a lead, without needing any historical cost per lead. The proposal test is sharper if you have run ads, because then there is a real number to check the plan against.

Want a second opinion on the proposal in front of you?

Walk through the numbers with us. If the plan holds up, we will say so, even when it is not ours.

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