How Much Should Contractors Spend on Marketing?

Start with a percentage of revenue

A common starting point for established service businesses is to invest roughly 5 to 10 percent of gross revenue in marketing. Companies that want to grow quickly, enter a new city or add a new service often go higher for a period, while those already booked out may stay near the low end.

A contractor doing $600,000 a year would therefore look at roughly $30,000 to $60,000 annually, or $2,500 to $5,000 a month. That is a guide, not a rule. The right number depends on how much capacity you have to take on new work and how competitive your market is.

Check the number with job math

Percentages are a starting point. Job math tells you whether the plan makes sense. You need three numbers: the average profit on a job, the share of leads that become jobs and your cost per lead.

Suppose an average job earns $1,200 in gross profit, you close 1 in 3 leads, and leads cost $60. Each booked job costs about $180 in marketing and returns $1,200. That is a strong return even before repeat business. If the same leads cost $250, the math changes and you need to improve either the offer, the close rate or the channel.

Know what is a one-time cost and what is ongoing

Separate your budget into the parts that are built once and the parts that run every month:

• ✓One-time: website build, logo, branding, vehicle wraps, initial print runs
• ✓Monthly: local SEO, Google and Facebook ads, review management, hosting, social content
• ✓Seasonal: print campaigns, door hangers, storm or heating and cooling promotions

A sensible way to split the budget

Every market is different, but a balanced starting split for many local contractors looks like this. About 30 to 40 percent to local SEO and your website, which build long-term, lower-cost leads. About 30 to 40 percent to paid ads, which capture urgent demand right away. About 10 percent to reviews and reputation. And about 10 to 20 percent to print, social and local presence.

New companies without reviews or a site should lean toward the foundation first. Companies with strong rankings can shift more to ads and growth campaigns. Read our guide on how contractors get more customers online for the order to build things in.

Match spend to your trade and season

An HVAC company should spend more going into summer and winter, a roofer after storms and in spring, and a landscaper in early spring. See our HVAC marketing guide and roofing marketing pages for seasonal examples. Spending evenly all year is not always the smartest approach.

Avoid the two common budget mistakes

The first mistake is spending too little to learn anything. A $100 ad budget will not produce enough data to optimize. The second is spending without tracking, where a large budget disappears into clicks that never become jobs. Both are avoided with a clear target, call tracking and a review each month.

Know what to expect for packages

Our pricing page lists the packages we offer, including website plans, Facebook Ads Management at $349 a month, backlink packages and SEO Power. For a breakdown of what each service involves and typical market rates, read how much contractor marketing costs and how much contractor SEO costs.

A practical example

A roofing company earning $900,000 a year sets a $5,000 monthly budget. About $1,800 goes to local SEO and the website, $1,800 to Google and Facebook ads, $400 to reviews and reputation and $1,000 to print and local campaigns before the spring season. After six months they review calls and booked jobs by source, find that Facebook estimate offers are cheapest per job, and shift an extra $600 there.

Frequently asked questions

Is 10 percent of revenue too much?

Not necessarily. For a company that wants to grow fast or enter a new market, 10 percent can be sensible. For a company that is already booked, less may do.

Should I spend more in the slow season?

Often yes, because it builds momentum for the busy months, but keep an eye on cash flow and focus on lower-cost channels such as SEO and reviews.

How do I know if my marketing is working?

Track calls, forms and booked jobs by source. If you cannot tell where jobs come from, start there before increasing spend.

Make the budget a living plan

Review results every month and every quarter. Put more money into what produces booked jobs, trim what does not, and increase the total as your ability to deliver grows. A budget is a tool for making decisions, not a number to defend.

Not sure what number fits your business? Visit UPrintMedia.com and request a FREE marketing plan. We will show you a recommended budget and what it should produce. More calls. More jobs. Less guesswork.