Marketing Your Residential Services

3 replies [Last post]
meby's picture
Joined: 2012-04-17

Patrick Kennedy of Mister Sparky believes your annual marketing budget should be based on the following:

  • If you want to maintain your existing level of business, spend 7% to 8% of sales.
  • If you want to grow your business, spend around 12% of sales.
  • If you want see aggressive growth, spend approximately 15% of sales.

Do you agree with this line of thinking? If not, what percentage of your annual sales do you direct toward marketing efforts?

houst2's picture
Joined: 2014-01-06

Given that Mr. Sparky has been in business for, oh a while, and he is not only in one state or county, I would have to say his numbers would be accurate. My question is where do you spend the 12% to grow the business? TV, Radio, Newspaper, Yellow Pages, Google, etc.? Seems as though everywhere you look or listen, you are being bombarded with advertising. I know this has extended the original question, however, I think it is something that could be turned into another discussion topic.

robzalewski's picture
Joined: 2014-05-22

Folks, I've been an advertising and marketing professional for 25 years. I work for a distributor right now but here's how I would approach this. For a large part, big decisions like these should benefit from some sort of data. For instance, who is your customer? How do they make a buying decision? What is the best to reach THAT person?

Getting yourself registered with Angie's List should be the first thing you should do.

I'm guessing women are driving a lot of these decisions when it comes to general electrical problems or upgrades to the home. Mass market advertising (radio, TV) get you numbers but I don't think it's a good way to spend your money because you're paying to reach MAYBE 1% of the numbers of exposures they sell you. Instead, I would work my way into grocery stores with floor stickers, cart ads or any number of other in-store vehicles. You should also target certain neighborhoods that are demographically good targets. These are just two ways to spend TARGETED dollars on messaging to homeowners that have some sort of disposable income for electrical upgrades and repairs.

Also, how can you get in front of realtors who could recommend you to people who HAVE to get electrical repairs done as a condition of their sales agreement. Establishing those kinds of relationships could pay handsomely.

This is just a few minutes of thought so I'm sure there are plenty of other good ideas out there but my suggestion is to work this in a smart and organized manner so you don't waste money and get frustrated. Gather demographic information on your customers and plot down how they made their buying decision. From that information you will find it a lot easier to make some decisions on how to proceed.

bluelogic's picture
Joined: 2014-09-05

It should be around 20% of GP in all situations.

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