One of the most common questions we hear from contractors is: “How much should I be spending on marketing?” While there’s no one-size-fits-all answer, we’ve compiled real data from contractors across various trades to help you benchmark your marketing investment.
The Percentage Approach: Industry Standards
Most successful contractors allocate their marketing budget as a percentage of gross revenue:
- Established contractors (5+ years): 5-8% of gross revenue
- Growth-phase contractors (2-5 years): 8-12% of gross revenue
- New contractors (0-2 years): 12-15% of gross revenue
For context, a successful plumbing company with $1.2 million in annual revenue typically invests $60,000-$96,000 annually in marketing ($5,000-$8,000 monthly).
Breaking It Down by Trade
Marketing needs vary significantly by contractor type:
HVAC Contractors:
- Average monthly spend: $2,500-$5,000 for companies under $1M
- Average cost per lead: $35-$75
- Top performing channels: Google Local Service Ads, targeted Facebook ads, email marketing to existing customers
Plumbers:
- Average monthly spend: $2,000-$4,500 for companies under $1M
- Average cost per lead: $25-$60
- Top performing channels: Google Local Service Ads, organic search (SEO), NextDoor ads
Electricians:
- Average monthly spend: $1,800-$4,000 for companies under $1M
- Average cost per lead: $40-$85
- Top performing channels: Local SEO, Google Business Profile optimization, targeted display ads
Landscapers:
- Average monthly spend: $1,500-$3,500 for companies under $1M
- Average cost per lead: $20-$50
- Top performing channels: Houzz Pro, Instagram, local SEO, yard signs
Return on Investment Benchmarks
The real question isn’t how much you spend, but what return you’re getting. Here are the average returns our contractor clients see:
- HVAC: 5-7x return on marketing investment
- Plumbing: 4-6x return on marketing investment
- Electrical: 4-5x return on marketing investment
- Landscaping: 3-5x return on marketing investment
For example, a plumbing company spending $3,000 monthly on marketing should expect $12,000-$18,000 in revenue directly attributable to those marketing efforts.
Seasonal Adjustments Matter
Smart contractors don’t spend the same amount year-round. Instead, they adjust based on seasonal demand:
- Increase budget by 20-30% during peak season
- Reduce budget by 10-20% during slower months
- Maintain brand awareness marketing year-round
- Focus on different service offerings as seasons change
This approach maximizes return while maintaining consistent lead flow.
The Minimum Effective Investment
For small contractors just starting with marketing, there is a minimum threshold to see results:
- HVAC: $1,500/month minimum
- Plumbing: $1,200/month minimum
- Electrical: $1,000/month minimum
- Landscaping: $800/month minimum
Spending below these thresholds typically results in inconsistent or disappointing results.
Not sure if your marketing budget is optimized for your business? Natural Reach specializes in helping contractors maximize their marketing ROI. We’ll analyze your current spending and performance to identify opportunities for improvement. Contact us for a free marketing assessment!
Leave a Reply