How Do I Effectively Reinvest in Marketing to Improve Returns

A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“I have a marketing budget of around $1.2M and I make marketing decisions myself without help from a consultant. I always keep an eye on advertising as a percentage of sales to gauge the effectiveness of campaigns.

I’m at the point now where some of my advertising isn’t working well. Do you have any guidance on how to allocate my budget by percentage?”

Contractor University Expert Response:

“There is a lot to cover here. I have provided more general answers and included some great resources to get you started. Tailored advice can be offered once a comprehensive business plan is developed and specific goals for 2025 are outlined.

What I can state with absolute certainty, is that any campaign needs to be tracked digitally and have full analytics.

Tracking overall sales growth doesn’t give either of us any insights into what worked or didn’t. We need to know the lead sales funnel, by campaign, channel, and promotional message.

A full marketing plan is a must. If you have one, please send it, and I will evaluate it fully for you. If not, we’ll want one for your growth and spend.

Your digital assets drive the business in today’s world – it’s important to have a robust dashboard system that can effectively track any campaign and the quality of leads, no matter how they come in. This setup helps you analyze the return on ad spend accurately. Ultimately, it’s crucial to not only measure sales but also understand your profits and ROI for each campaign to gain valuable insights into its overall effectiveness.

I would start with narrowing down where you are and where you’d like to be with some basic questions.

• What channels generate the majority of your leads?
• What type of campaigns gain the most and highest quality leads? These might be two different answers.
• What are your set KPIs? Now, compare what you know about your marketing leads to the KPIs.

Once you have the baseline from your data, you can then assert a change pattern in lead flows from any channel where the cost per lead is in your wheelhouse.

It’s important to flesh out a few things as you build a strategic marketing plan:

• Lead Pyramid By Medium Evaluation Tool – Track where leads come from and start setting a baseline
• Marketing Plan – Create a marketing plan with elements for targeting ads – budget – message – and most importantly conversion, as conversion is the name of the game.
• A Campaign Calendar – Define a 12 month set of advertising and campaigns. It should always focus on a rolling 90 days – 30-60-90 days are refined and tightened.
• A Marketing Model – Define choices of channels for your business and what makes sense for you. This is both a data and creative driven conversation. The data tells us about messaging and promotions, and what and how content is consumed.

Since the topic of marketing is so broad in scope and specific to each company, it’s important to stay informed and get consultative feedback. For more training Contractor University teaches a marketing workshop 3 day bootcamp in developing a marketing plan and why – I highly suggest you sign up for the next version. We develop this work in a workshop to complete a marketing plan and ask the questions necessary to advance the brand and advance a profit growth agenda.

Key concepts to understand when developing a marketing plan include:

• The objectives of brand identity and goal setting – understanding your sales mix by department and key strategies of marketing
• Internal marketing concepts
• Operational marketing concepts
• Media and external advertising concepts

As a general rule, 95% of the companies in the trades do NOT complete these steps – as you can imagine, PE demands it because it works for the best possible ROI and generates lead counts you need at a cost you can make money.

Growth is a 6-8% budget to start and must have co-op on top of that dispersed into the market.”

Contractor University members can submit questions via the Ask-The-Expert page in the member dashboard once logged-in. If you are not a member, sign-up for a free trial to access this feature today.

Want to read more real contractor questions and the expert responses? Our faculty members have also answered questions on other related topics, including Training Service Techs in Customer Service and What Should Technicians Do Before Leaving A Service Call.

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