6 Steps To A Better ROI On Your Marketing Budget

by Corey Philip
December 21, 2017

One thing that really shocks me is how many contractors and home service businesses just waste money on advertising.  I’ll see people running those DexKnows websites in AdWords all the time – multiple ones for the same company. It’s like the DexKnows sales people sold the same company the exact same marketing package and they all high five and leave these website owners in the dust.

The same goes with Yellow Page ads. In the Fort Myers area, a yellow page ad is running upwards of $5000 year, (on the low side) and that was a few years ago when I heard that number. There are still all kinds of contractors and service providers running ads in there and quite frankly I think the yellow book is outdated and a horribly ineffective way of advertising.

How about road side billboard ads?  Those cost at least $1,000 per month for decent placement, but let me ask you this, of the dozens of billboards you drive by daily, how many do you recall?  How many have you called?  For me, it’s a recall of 1, and a call of 0.  The one I recall is an ‘upside-down billboard’ which I’ve talked about before (link to post about Best Home Services).

I once ran across a poster size ad one side of a tri-sided directory display AD in the mall (an ad on the back of the mall map).  The ad, complete with a stock photo of a plumber and fake smile was accompanied with a company name and number that I recognized.  I shot the owner a text and asked him how much he spends on it, and he said “$750 per month”.  I followed up with asking about how many customers it gets… he said “a few people a month mention it.

Do these business owner have any clue just how much money they are wasting on marketing?

Now I should clarify, that I don’t mean to say these types of marketing don’t work – they can, but I find I often wonder how much many home service companies spend on marketing.  Darren Slaughter, a construction industry marketing consultant suggests a marketing budget of 15%.  Louis Bruno, of Bruno Air says that most sub 10m companies spend 8-10% on marketing and should dilute it as they grow.  Jay Young of North West Professional Services says his firm spends 2.5% on advertising.  Clearly there is no ‘magic’ target number, yet many business owners look to this number to judge their marketing efforts.

To really get an accurate handle things marketing expenditure needs to be viewed in terms of ROI.  Only then can you data drive decisions.

Are You Wasting Your Money on Ads?

Getting a better ROI for every marketing dollar spent should be a priority for any business.   Many of the marketing services and platforms out there though bring a negative return and most proprietors have no clue.  They see their billboard on the side of the road on their drive home everyday, and they hear their phone ring and believe their must be correlation… that usually isn’t the case.

If you want to be one of these contractors wasting your marketing dollars away and you want to start lowering your marketing costs, here’s where to begin:

  1. You Need to Track Conversions

    If you’re going hammer down your marketing costs, you really need to know what marketing sources are leading to a lead and then a sale. So many business owners are just out there, running ads and paying loads of money for them. If they “feel like it”, they will keep pumping money into more ads without even knowing if they are efficient.

    I know an interior remodeler in Port Charlotte Florida that has 3 large billboards that cost $1500 a month and he won’t stop advertising that way even when he doesn’t know how many phone calls or leads he’s getting from them.  He simply ‘feels’ like they work.

    To quantify and justify your marketing dollars, you have to be tracking conversions! You can set up CallRail or a similar program that tracks your phone calls, and tracks how these customers are finding your business or what marketing source they’re using to find you and contact you. With a program like CallRail (which i personally use) you can assign a specific phone number to each ad. So to track your billboard ads, you can just put a unique tracking phone # on the each ad and then each month you could see how many people are calling your business from them.  You can even record the calls and track first time callers to the company, and from that information, you can get a ROI and see if it’s worth the $1200-$1500 per month that you’re spending on these billboards. That’s a lot of money to have no quantification  to know if it’s even bringing in any traffic.

  2. Track Website Conversions

    You also need to track your conversions that come through your website’s contact form.  It’s not difficult to set up conversion tracking. Once you have conversion tracking set up, you can see which pages people landed on or what content is leading to the conversions. You can learn which paid traffic avenue is leading, ie – bing ppc google ppc,  display ads, fb ads..etc.. and how well they lead back to phone calls. A lot of people run facebook ads, but don’t have a way to track them. They just throw money into ads and see what happens but never really know if it’s working. This is a complete waste of money.

    Once you get conversion tracking on your website and through your phone calls, you can see exactly how many phone calls and leads you got from those Facebook ads or any other marketing source and decide if you want to go through with putting more money into this campaign, or look for a way to lower costs with it.

  3. Cut The High Cost marketing  Methods

    Once you have a conversion tracking system in place, the nail has been set, and the hammer is ready to be swung.  At this point you’ll have actionable data into your cost per lead, your cost per customer, and the revenue generated from each lead source.  From here you’ll be able to see which marketing methods bring you the best ROI!  Slowly cut out the worst performing marketing methods.  Do note I said slowly.  Never chop your marketing budge significantly in one shot. Theoretically it is practical, but in the business world, its better to make small steps.

    As in the case of the interior remodeler I mentioned earlier, a $3 tracking number from Call Rail, for each Billboard, might reveal that the billboards have an extremely poor ROI and save $54,000 per year.

  4. Get Into the Driver’s Seat of Your Website

    You need to have a website that breathes, you need to have a website that’s consistently updated and you need to control it (or a key person on your team needs to control it). They need to be able to login, update things, post regular blog updates, and things like that. You need to make sure your website actually has a growing presence and it can keep growing with your business and always be dynamically changing to your businesses needs and to your target audience.

  5. You Have to Create Content

    Creating content and getting it out there on the web will allow your organic marketing campaign to keep growing, it’s like a firewheel effect. You work on one piece of content and you build on it and build on it and before you know it, you have all of this great content out there and it keeps leading people back to you. Not only that but it puts you ahead of your competition and two years down the road when competitors choose to do content marketing, they now have to catch up to you and you’ll be way ahead of the game.

    The older your content gets, the more traffic and targeted customers it can reach, and the more it will bring back traffic and leads to your business.  Beyond the time spent on creation, this advertising is free.

    My best posts are from 2012 – 2014 and even before that, when I first started this contracting company. I don’t even think that my posts are that good but they’re on the web and that’s what matters. They are not something I would write now, but it’s great content to someone else that doesn’t know much about our services. The point is, it is good to have something out there, compared to having nothing.

    We’ve got one blog post called, “4 types of screen every homeowner needs to know about and what to avoid”, and this is full of the basic information we relay to customers day in and day out and we put it into a blog post. It’s been out for 5 years and people still read it. It still gets the most traffic; about  200 visitors organically each day and  another 100 will come to it just by navigating through our website, on top of that, we’re still pumping facebook ads traffic to it. It’s the most popular page of our website by far, all from just one blog post. How many sales has this one blog post lead to? Probably well into 7 figures, most of our customers read that blog first, then contact us for more information.

    Creating content and getting it out there is cheap, it’s easy to do, and when you just start out, you might be thinking that no one is reading your content but you have to consistently do it day after day, week after week and you will get there. You will get the results you’re looking for from it and the best part is, it’s going to be cheaper than any other way of marketing. It probably only took me an hour to write that article. And 5 years later, it’s still bringing in tens of thousands of dollars every month. How can you beat that for ROI?  No print ad, radio, billboard or TV ad is going to do that.

    Another thing to realize about paying for ads is that as soon as you stop paying for those ads, they don’t perform anymore. When it comes to content that’s out there, it will stay there forever without any other payment required to keep it running.

  6. Start Experimenting & Consistently Improving

    With the value of each marketing dollar being tracked, start experimenting with your marketing and campaigns.  Make small changes and try campaigns or tweaks outside of the box.  Set a budget to cap your spending and see what happens.  Change up the design, or the verbiage, or even the billboard location.  You’ll probably be amazed at the differences that slight changes can make.

    Bottom line: if you really want to get serious about lowering marketing costs, which I think everyone should:

    • Start Tracking All Conversions From Lead Source To Sale
    • Cut the ineffective marketing methods
    • get in the driver’s seat of your website, stay in control of it
    • create good content, put it out there,
    • Experiment and improve.

Update 12/18/2017:

Since writing this post, I’ve came to realize that many home service business owners struggle with tracking conversions — particularly getting it set up.  I’ve started working on an online course onf lead generation with Facebook Ads, and part of that course will include set up of conversion tracking.  To be clear, I’ll do the set up for you.  You can sign up here to get updates, and a discount on the course when launched.  It will cover everything, in detail, step by step, how to reach high value prospects for home services on Facebook, and then (most importantly) how to get them to contact you!

About the author

Corey Philip

Corey Philip is a small business owner / investor with a focus on home service businesses.

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