What’s in a Number? Or Time to Budget!

OK, it is getting close to that time of year again where big boy contractors start thinking about next year’s marketing budget. And if you want to be in business next year and have a reason to read this blog for more than my rapier wit, then you better have one in mind.

The market is turning

Most of my work this year has been with major remodelers or home builders who got into remodeling to keep the doors open or to expand into new markets. Some have done well; others are still struggling with positioning and branding.

But the market overall is getting better as homeowners begin to take care of problems or issues that have been building up over the last few years and can no longer be avoided. Not to mention, parents are getting older everyday and their care and housing needs are coming to the forefront every day.

All this means is that pent up demand is going to be flushed out into the marketplace and contractors who are not prepared with solid sites, good marketing and superior selling skills are going to be the same ones complaining how slow it is while their better prepared counterparts down at the supply house will be killing it.

But what to budget?

Well, this is an arbitrary number for sure, and I usually like to see between 5%-10% of gross sales spent on marketing for companies over 5 years old. For younger companies still trying to make a name for themselves, 15% of gross sales is a better number that will help you build a solid book of business now and flood the pipeline with referral and repeat work for years to come.

Where to spend it

This one, takes much more of a tactical approach to figure out, and should be considered long before you spend any money. So, if you aren’t sure where to put your ad dollars next year, maybe a conversation would be in order to make sure you are getting at the clients or customers you need to make your business profitable!