I have been wondering for a while how much other EC set aside for advertising. I'm not looking for a dollar amount just a percentage. Also it would be helpfull to know what size and leval the business is at. If it is small and newer or big and well established for many years.

I'm a newer business with 1 emp. and I have been spending about 3% except for last year. Last year it was 6% but I did not notice the much of a differance between the years. Some of it depends where I spend the money.

Where I'm at there are maybe a 1000 of other EC working all over a large area. Most every phone book is packed with EC from basic listings to multi pages. Then there is a lot of different phone books to cover just 1 county.

I'm in your area and am getting ready to hire. Advertising alone is 5% for me. Advertising is a small part of my marketing (two-thirds of my business is repeat/referred/personal contact).

Those who know more than me recommend 10% of your annual budget for advertising. An interesting side note to this is that you should spend 10% of where you want to be, not 10% of where you are.

Dave

"Where I'm at there are maybe a 1000 of other EC working all over a large area. Most every phone book is packed with EC from basic listings to multi pages. Then there is a lot of different phone books to cover just 1 county."

About the same type of area here, we have been at 20% for years, even as a one man operation, 10 or 15% Just will not cut it, at any less then 15% i was just burnning up money, with little or no response, another thing is the ad's have to run continous, one year, is just testing the waters, you need to be out there, and in their face, your trucks are a great ad, provided they are a professional lettering job, done in good taste, without a good amount of ad's, don't expect the phone, to ring much.

Another consideration is that if you average two calls per week that average three days work each, you'll do OK. The point is that sales is at least as important as advertising.

Dave

What percentage of revenue you dedicate to advertising will depend on your planning. Different business models create different challenges and therefore different advertising plans. Without a plan, any percentage could simply be a shot in the dark. Ready, AIM, then fire.

Another consideration is that advertising isn't usually needed if your business is from GCs. Advertising is needed in residential remodeling to attract homeowners.

Along the lines of wilkie's comment, spending thousands of dollars on something that won't be seen by your favorite type of client may be as satisfying as running the money through a shredder.

Dave

"Along the lines of wilkie's comment, spending thousands of dollars on something that won't be seen by your favorite type of client may be as satisfying as running the money through a shredder."

Excellant Point, Targeting your ad budget.

Thanks Dave and LK.

Wilkie, I understand the point on the business planing. All I am asking is a quick survey in a percentage and where the business is at. I am tring to keep this simple so more may respond. I'm not looking for a dolar amount. I am not asking anyone here to decide for me my budjet. And I'm not asking how much I should charge for an opening.

I sorry if I can't ask a simple question without the "well you should know it if you have a plan".

Yes I have a plan and yes I am tring to adjust it for next year. I am tring to do some research on advertising results. Just cause you write down a plan does not mean it will work. I could write down on paper that I'll spend $100K on marketing and gross $1M. Don't mean it will happen.

For the year I am at 6%. I am wondering, how many calls do most EC's average per week? I am usually from about 5 to 10 although it has slowed down a bit in the past month or so.

We spend 18% to 20% on advertising. we have 20 employees and 12 trucks. As everyone else we have 1000's of EC's around here but thats what drives our business.
Know your competition, best them then buy them.

ZERO, but we did put up a webpage 2 years ago. Its good for transferring files, and contact info but that is about it. Last year yellow pages left our name out of the phone book on “accident”, it did not affect our business at all.

All or our business is word of mouth. Most jobs can be found on i-Squared Foot, or being put on bidder’s lists. Good labor and contractors are really hard to find, and if you do a good job word gets around.

We stay away from residential, churches, and schools. Everything else we chase. Service is not our bread and butter and we only do it for people we have already done work for, and our service guys also pick up our punch lists and warranty work.


[This message has been edited by ITO (edited 11-27-2006).]

I too am interested in how much other contractors are investing (% wise).

However, I have a question that I believe eludes to what wilkie was saying. Does anyone track the results of their advertising... ie. does one form or another work better based on tracking the results?

When advertising, does one sector create better results than another? ie. Service work, New Construction, Renovations?

Just curious, if anyone is tracking the results to make sure that the money invested is turning the max profit possible?

10% should be your minimum. Invest in a decent ad in the real phone books (not these little community ones). Newspaper advertising attracts the cheapest of the cheap. Direct mail is shredded money. Coupons eat what little you would have left after you grant the discount on your coupons.

All major Yellow Pages offer the option to link your ad to their Internet advertising. An example that is well known is www.Superpages.com. We switched to this option with our Verizon Yellow Pages ads and response took off like crazy. Granted, they also generated more calls from junk salesmen, but those calls are usually pretty easy to screen.

You have to spend money to make money. Granted, up to 20% is the best, a small shop can't support that kind of volume generated. Unless you have a full office staff of knowledgable people who know what they are talking about and can give estimates over the phone, stick with 10% for now. The last thing you want to do is blow 20% which generates more activity than you can handle. You also don't want bad press from people who had to leave messages and never heard back from you. There's only so much you can do in a day. Spend accordingly and expand gradually.

[This message has been edited by EV607797 (edited 11-28-2006).]

I guess this could be considered marketing money, but it is also a source for plans:
http://www.isqft.com/

It's an online plan room, and we make and maintain contact with lots of out of town GCs, for most of our retail construction.

You can brows the jobs in your area, down load the plans, and get a list of GCs bidding the jobs to send proposals too.

I've gotten some decent response from The Bag, if anyone is familiar with that.

Does anyone use the Blue Book? I get ITBs from it non-stop. I imagine I'm being shopped alot of the time but I have gotten work from it.

Here's my question...10% of what? Advertising should be a % of what? Your operating costs? Percentages really throw me for a curve. I need whole numbers!

I am currently spending 6% of gross sales on marketing. I'm a 1 truck outfit and I have 2 helpers. I plan on raising this to 10%.

Last year we fluctuated between 12% to 19% seasonally. I track every ad we have out using a variety of sources. Each direct mail piece uses a different tracked number, and I also use www.standardcall.com to track all of our YP ads, including some that are three years old. We track everything.