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Optimizing Your Marketing Spend: A Guide for Home Service Companies

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Optimizing Your Marketing Spend: A Guide for Home Service Companies

Understanding the Allocation Process

One of the common questions we receive at CAMP Digital is: What is the ideal distribution of my marketing budget across various channels? While we briefly touched on this topic in a previous blog post, let’s delve deeper.

Digital vs. Traditional: Finding the Right Balance

When allocating your marketing budget for your home service company, there’s no one-size-fits-all solution; it’s a dynamic process that requires consideration of various factors and may fluctuate from month to month. However, a common guideline is to allocate 60% – 70% of your budget to digital marketing, with the remaining 30% – 40% going to traditional and branded efforts.

Prioritizing Paid Placements for Maximum ROI

Within the digital marketing allocation, it’s crucial to prioritize each paid placement based on its return on ad spend (ROAS) and spending capacity. Consider each platform as a “bucket” and focus on filling the most profitable ones before moving to the next. This could include platforms like Google Search, Local Service Ads by Google, Meta (Facebook/Instagram), Bing, and YouTube, among others. Understanding your budget and goals is essential before diving into allocation strategies.

Factors Influencing Budget Allocation

Factors such as the size of your maintenance database, brand recognition/market share, multi-trade operations, growth stage, and years in business play significant roles in determining where your marketing dollars should be spent. For instance:

  • A company with a small maintenance database may prioritize driving maintenance plans and digital/demand-driven marketing, deferring brand/traditional marketing until the customer database grows.
  • On the other hand, a company with a large maintenance database might focus on turnover leads from maintenance customers and invest more in brand marketing to expand recognition.
  • Companies with little brand recognition should allocate more budget to branding campaigns (traditional media, direct mail, etc.) and digital marketing to drive demand.
  • Single trade companies, such as HVAC, may adjust spending based on seasonal demand fluctuations, prioritizing demand-driving initiatives in peak months and focusing on maintenance customers during off-peak seasons.

Adjusting Budget Allocation Based on Growth Stage

When considering the growth stage of your company, budget allocation may vary:

  • High growth stage (8-10% of revenue): New companies aiming to establish themselves, companies looking to increase market share massively, or companies with a small maintenance customer database (<300 maintenance members per $ 1 million in revenue) and reliant on demand calls.
  • Medium growth stage (5-7% of revenue): Established companies with a decent-sized maintenance database (~300-500 maintenance members per $ 1 million in revenue) looking to grow at an average pace or expand into new markets or companies looking to establish a new vertical.
  • Maintain growth stage (<5% of revenue): Well-established companies with a large maintenance database (>500 maintenance members per $ 1 million in revenue), great tech lead turnover, and strong organic traffic/returning customer base.

Nurturing Existing Customers for Continued Success

Additionally, it’s crucial to allocate resources to customer nurturing, including automated email marketing, reputation management, post-transaction rewards, and customer referral programs, to maximize the value of your existing database.

Ready to explore CAMP Digital’s comprehensive solutions for your home service business? Connect with an expert today!

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