For a business to succeed, it must have a good marketing and sales strategy. That’s a given. What’s less certain is deciding when to spend, where to spend and how much is enough. All too often, these answers are an afterthought—or, worse, pulled from borrowed benchmarks. 

“We think of it backwards,” said serial entrepreneur Carrie Kerpen. “There’s no tracking by channel, no connection to profit. We’re just doing what we think other people do and that is absolutely not what we want to be doing.” 

As founder and CEO of The Whisper Group, an exit-readiness advisory firm for women-owned companies, Kerpen returned to our webinar series to share her roadmap—for scrappy startups, established firms and every stage in between. 

THE GROWTH CURVE: WHERE ARE YOU NOW? 

The New Start-Up

You’ve just launched and are trying to get the business off the ground. This is what Kerpen called “the unhinged phase” because “your strategy is doing whatever the heck you can to get money in the door.”  

Take her first company, Likeable Media, where she traded marketing services for office space in a shopping mall. “When the budget says no, the barter table says yes,” she explained. Or the time she pretended to live in a different county in New York so Dr. Edward Zuckerberg (father of Meta’s Mark Zuckerberg) could be her dentist; he ended up joining her advisory board. 

When she started The Whisper Group, again she got creative—this time with a podcast to cultivate a network of exited women founders. “Find a way to connect with people,” she said. “Throw stuff against the wall and see what sticks.” 

The Hustle Phase 

You’re in grind mode. From the outside, things look great. There’s traction, customers are returning and revenue is on the rise. But without strong systems, this can be a dangerous phase for an entrepreneur. 

“Everything depends on the founder—referrals, relationships, repeat business,” she said. “You’re hustling, but in the end, that is a system that is out of your control. It’s not a long-term recipe for success.” It works until it doesn’t and, unfortunately, most entrepreneurs stay in this phase far too long. 

You want to make sure you have a business that is not entirely dependent on you to generate sales.

The Process Phase

This is the step that moves the needle. Growth becomes measurable; budgets are tied to outcomes. According to Kerpen, it’s the difference between asking how much you should spend on marketing versus having enough clarity to say, “If I spend X on marketing and sales, it will yield Y.” 

Enter unit economics—the direct revenue and costs associated with, in this case, acquiring a customer. Here are the key metrics to know. (For a deeper dive, see Kerpen’s previous webinar on the subject.)

Key Unit Economics

Customer Acquisition Cost (CAC): how much you spend to gain a new customer.  

Formula: Total Marketing and Sales Cost / New Customers Acquired

Lifetime Value (LTV): how much a customer spends with you over a lifetime

Formula: Average Purchase Value x Annual Average Purchase Frequency x Average Customer Lifetime

Gross Profit: the remaining revenue after deducting the cost of goods, or, as Kerpen put it, “how much you have left to spend on operating expenses, sales and marketing”

Formula: Revenue – Cost of Goods Sold (COGS)

Payback Period: how long it takes to earn back your CAC. 

Formula: CAC / Monthly Profit Per Customer

Retention and Churn: the rate at which customers stay, or leave, over time. For product-based businesses, churn means returns. 

Retention formula: ((End Customers – New Customers) / Start Customers) x 100%

Churn formula: (Lost Customers / Start Customers) x 100%

Once you have a handle on these, you’ll know how much a customer is worth, what it costs to serve them (COGS) and how much money is available for operating expenses (OpEx), sales, marketing and profit. Master budgeting for all four, Kerpen said. 

Pro Tip: If budgets are tight, don’t raise prices just to fund sales and marketing—only do so if the product commands it. Instead, reexamine your operation expenditures to reduce overhead.

DECIDE WHERE TO SPEND.

Marketing and sales go hand in hand but Kerpen was clear during her session: they are not the same thing. “Marketing creates opportunities,” she explained, “while sales turns those opportunities into revenue.” Invest in both. 

So where should your money actually go? Is one more important than the other? Or does it depend—and if so, on what? 

You need to diagnose your problem:

• If you don’t have enough leads or are relying entirely on referrals and return customers, spend more on marketing. 
• If your leads aren’t closing—e.g., deals are stalling or you have high site traffic but mostly empty carts—then target sales. 
• Both weak? Then you don’t have a system in place. Pay attention to marketing first, to create the flow, then add sales once you have leads to convert. 

Your unit economics can help you determine whether you should next focus on marketing or sales.

Other factors to consider: 

• For early-stage or service-based businesses, a reasonable split is 60-70 percent marketing and 30-40 percent sales. “You need volume before optimization,” she explained. As you scale, that ratio should shift to 50-50. Note that new founders with zero awareness should also set aside funds for brand building.
• For those in high-ticket, relationship-driven businesses, conversion matters more. Aim for 60 percent sales and 40 percent marketing.
• Do you work with products and lower-ticket items? Then flip the above figures. “You want to get yourself out there as much as possible, so focus on marketing,” Kerpen said. “Conversion ideally happens with good pricing and UX.” 

IDENTIFY AND TEST YOUR REVENUE CHANNELS.

Next, decide which channels will drive growth for your business—and always test to ensure you’re on the right path and investing wisely. “Track and report so you understand what success looks like from the get-go,” Kerpen said. 

Where to spend:

• Marketing spend is about volume: attention, awareness and leads. This includes paid media, social media, PR, content creation and emails. Kerpen noted that high-ticket items may require a more in-person approach. For her own business, this means webinars, events and conferences. 
• With sales, you’re paying for people and process. Think CRM, software, discounts, sales training, salaries and commissions—anything that helps you close the deal. 
• “When you’re testing different channels, accept that some will fail,” Kerpen said. “Adjust your budget to lean into the ones that won’t. Once you see momentum, add gasoline to that fire.” 

Testing tips: 

• How long should you test? Kerpen doesn’t ascribe to a fixed timeframe. “Marketing, in general, is art and science, and depending on how early stage you are, you’ve got to try a lot of different things,” she explained. “As a founder, you’ll know what’s working and what’s not based on the data.” 
• As for how many channels to run at once—only do what you are prepared to do well. If you’re on all the different social platforms but in a half-hearted way, that’s not a strategy. 
• Check your biases at the door. Kerpen thought paid media would be a win; it wasn’t. She was hesitant about sponsoring conferences until a colleague convinced her; they worked. 
• And finally: “There is always a risk,” she said. “It’s just a risk that’s calculated.” 

THE GOAL: THE ASSET PHASE. 

Once you’ve established a process, you enter the asset phase, where your business becomes scalable, transferable and predictable—and ready to be sold at a high valuation. 

“It doesn’t matter if you don’t want to sell,” Kerpen said. “You want to make sure you have a business that is not entirely dependent on you to generate sales.” This requires a mindset shift, but it’s the measure of real success.