Over a century ago, retailer John Wanamaker – known for his HVAC, plumbing, and electrical business in center-city Philadelphia – complained, “Half the money I spend on advertising is wasted. The trouble is I don’t know which half.” If you own an HVAC or other home services business, you’re probably nodding and smiling. Owners like you recognize that they need to spend money on marketing and advertising to keep revenue coming in, but they become frustrated at the amount of money that seems to be wasted. If that describes you, we’re happy to offer six practical steps that will reduce waste and make your marketing budget work smarter:
1. Set Goals First, Not Budgets
One of the most common questions we hear from business owners is “How much should I spend?” Before anyone can answer that question accurately, they need to ask another: “What am I trying to achieve?” Developing a realistic strategy begins by establishing measurable revenue goals and key performance indicators (KPIs). Some of the most useful KPIs for businesses like yours include:
- cost per inbound call
- cost per lead call (ServiceTitan considers calls over 60 second to be lead calls)
- cost per booked job
- inbound call to booked job ratio
- number of jobs completed
- booked job to completed job ratio
- number of jobs cancelled
- average revenue per completed job
Keep in mind that saying you want to grow your business by 10 percent this year is not a measurable goal. Saying you want to perform 25 more installations, add 300 new members to your preventive maintenance club, and increase the average ticket on service calls by 5 percent – those are measurable. Once your sales objectives are set, you can build a marketing plan that supports those numbers and track your performance using the KPIs. Smart budgets follow strategy, not replace it.
2. Adjust Plans and Numbers for Seasonality
Determining your monthly spend by dividing your annual budget by 12 is a bad idea. Why? You’re in an industry that’s inherently seasonal, so spending the same amount every month is inefficient. Fighting seasonality is like arguing with gravity — you can try, but you’ll lose. Work with it, not against it. During your peak months, you should plan to boost spending by 20 to 30 percent, because that’s when customers have the strongest needs – and you want to be sure they find (and choose) your business. In the shoulder months, shift your dollars to channels and campaigns that promote retention. And during the off-season, promote maintenance plan offers.
3. Balance New Customers and Retention
Too many business owners focus only on acquiring new customers, when marketing to their existing customers may create even greater opportunities for recurring revenue. Offers designed to stimulate loyalty will build trust and reduce the opportunity for competitors to poach your customer base. That’s why it makes sense to dedicate at least 10 percent of your marketing budget to retention strategies such as using email marketing, SMS, and outbound calling to reconnect with and cross-sell customers.
4. Don’t Confuse Branding with Lead Gen
Sure, strong direct response efforts can get the phone ringing right away, but strong branding ensures the calls will keep coming next month and for years to come. Emphasizing branding is playing the long game, and initially, you can expect to see slight increases in your cost per lead – but after a year, you’ll notice that your conversion rates have risen. Within two years, your cost per lead will plunge … and it will keep dropping as your efforts continue.
5. Hold Teams Accountable
Your marketing dollars can’t help you if the rest of your process is broken. Careful tracking is critical. Be sure to track the entire customer funnel, from leads to calls to booking to revenue, measuring actual performance against your marketing spend. Develop weekly metrics and simple scorecards to keep your leadership aware of what’s working and what isn’t. Everyone contributes to your company’s performance, so hold them accountable and share performance data. While marketing may drive demand, the people handling your calls and booking appointments, the sales staff and techs closing business, and your operations all combine to deliver results. Measuring performance weekly allows you to make shifts when needed.
6. Find Partners Who Sharpen Your Strategies
Strategy beats budget every time, and home services contractors who treat marketing as “set it and forget it” usually end up wasting money. The successful ones align their spending with their goals, adjust for seasonality, balance retention and acquisition, invest in branding, and measure every step. Adding your own outsourced Cornerstone marketing team gives you the brainpower and resources of experienced marketing professionals who focus solely on helping businesses like yours.