Marketing Budgets: How Much and Where to Spend it
It does not matter how qualified you are, how good your service is, or how resilient your processes are if no one knows about your company.
Marketing solves this problem.
But how much should you spend on a marketing budget, and where do you spend it?
The answer is relatively simple, but the execution can be complex. The sooner you set your marketing budget and define where you will spend it, the faster you get real control over the direction of your business.
How Big Should Your Marketing Budget Be?
Your marketing budget will be a significant and permanent part of your budget. It has the greatest impact on your bottom line. Marketing is the process you undertake to attract leads and sales. It is always the last place you should cut if you have to slim down your business budget.
Several factors go into developing your budget, including:
- Mindset – Are you frugal or cheap?
- Initial Budget
- Goal Budget
The Cheap Vs Frugal Mindset
In the junk removal business, you see the difference between cheap and frugal people quite often.
- You know the guy who calls you to give an estimate on a mattress removal three towns over but only wants to pay you $20.
- In direct opposite is the senior who gives you a tip for work well done when all you did was clean up the branches from the backyard and sweep the sidewalk.
But did you know that the difference is based on a mindset that has long-range effects, including how a person conducts business?
A frugal mindset is more secure, focuses on a larger goal, and is more self-disciplined. Typically, a frugal person:
- Focuses on value over cost
- Considers the long-term consequences of their expenses
- Maximizes their budget to get the most value out of a purchase
- Believes that saving a few pennies today tends to result in poor quality and a negative experience
- Easily saves for future potentials like a new bed or building a mother-in-law cottage for when your parents get too frail to live by themselves
- Seeks to make wise financial decisions but not at the expense of others
- Researches and saves for the best value for the price. When they see it, they buy it.
A cheap mindset tends to be ruled by fear and scarcity, resulting in the habit of putting themselves first. A cheap person tends to:
- Prioritize instant results and has difficulty saving for the future
- While focused on the short term, cheap people are often unaware of how their choices disturb others.
- Sees the lowest price as the overall goal and focuses on cost. Value is not a factor
- Resist spending money for fear they won’t have enough left for themselves
- Allow fear of lack to sacrifice quality and time to save a few bucks
Consider the two mindsets. Which are you: value-focused or cost-driven?
Remember the saying, “your attitude determines your altitude”. It applies to marketing budgets too!
Marketing Budget: Initial vs Competitive
Did you know that junk removal companies that make over $2 million yearly in sales spend 25% of their gross earnings on junk removal marketing? It is the key to dominating your area and is only for the serious and competitive.
That is the value mindset in action.
But they did not start that way.
Industry experts encourage business owners to start with a modest 10% of their gross sales. Then scale up to 25% of your total gross as soon as possible.
It is a trade-off. Do you go for short-term profits or long-term gains?
You will get less profit for the first year or two. However, during that time, you are building up your SEO to a point where your organic traffic equals or surpasses the traffic from your paid ads like Google Ads. The combination of a fully functional organic search traffic program and paid traffic will catapult your lead generation forward and accelerate your inbound leads.
Where Do You Spend Your Marketing Budget?
You can spend your marketing budget on anything from candy wrappers, coffee cups, and truck wraps to websites, email marketing, Google Ads, and door hangers. How do you know what types of marketing will best fit your marketing budget?
Below are commonly used forms of marketing separated by price: low, medium, and high. Some options are relevant and effective long term. Others are good for short-term thinking but not long-term success.
Low Cost Marketing & Advertising
There are several low-cost marketing and advertising 1 options available. Some only require your time instead of money.
Please consider the following as potential options:
- Social Media – Facebook, LinkedIn, Instagram & Twitter
o Just starting – Use your personal page
o More established companies should have a company page
o Post at least twice a week
- Referral Thank You Cards – Do not underestimate the power of a handwritten thank you card. When you take the time to handwrite a thank you note, you acknowledge and appreciate the time it took for someone to refer your business.
- Relationship Marketing (networking) – Network with other businesses in your area, including moving companies, estate attorneys, realtors, home services contractors, and investors. Follow up with these people regularly and offer to buy them a coffee to “catch up”.
- Mailers – Do not mail to people you do not have a prior relationship with.
- Cold Calling Other Business Owners – Must have absolute confidence that your product or service is the best option for them and a thick skin.
- Craigslist – Can help you when you are first starting. Beware, cheap people shop here.
- Truck & Vehicle Wraps – This is mobile advertising. Make sure your professional logo is on there. People remember images more than numbers.
- Referral Program – Develop a professional thank you system to let those who referred you know that you appreciate them. Don’t forget the handwritten thank you card!
Medium Cost Marketing and Advertising
The next level has several medium-cost marketing and advertising options that work well when applied consistently. Please consider the following as potential options:
- Angie’s List – Purchased by Home Advisor in 2017. Seeks to prioritize the quality of work referrals over paid leads.
- Home Advisor – A lead generation sign where you pay for leads. The downside is you must be really fast calling your lead back. The lead is blasted to all the junk removal in that area. The first person who calls is usually the one who gets the job, or it is the wrong service.
- Thumb Tack – A lead generation site where you pay for leads
- Groupon – Keeps the trucks going so people can see your truck wraps. Like mobile advertising. You won’t make as much money on them. It does not lead to repeat customers.
- Yard Signs – Great for jobs in progress and previous customers’ yards. They must be custom to make the biggest impact. Blue Crocus designs these too!
- Luncheons – realtors or other groups – You sponsor their luncheon and buy the food, and they let you set up a table. It is a good way to get your name out.
- Door Hangers – If your crews are in between jobs, it is a good way to keep them busy. It works, but it is a numbers game for results.
- Website – Get a good one from Blue Crocus Solutions
- Email Marketing – Keep a list of your customer’s contact information, especially email addresses. Send out coupons, helpful information they can use, and notifications about your referral program.
High Cost Marketing and Advertising
The next level has several great higher cost marketing and advertising options that work well when applied consistently. Please consider the following as potential options:
- Google Ads – As soon as your website has been published, begin Google Ads. You are leveraging the power of local searches on cell phones from
Google to reach your ideal customers. Watch your quality scores, and don’t schedule your ads between 10 pm and 6 am.
- SEO – There is nothing quick about SEO. It can take up to a year or more to get you firmly at the top of page 1. However, it pays for itself when the organic leads come in from work you did the year before. SEO results build on themselves as long as you refresh your pages annually.
- Radio –Reserve radio advertising for when you gross over $1 million a year. Don’t go cheap. Pay for the time slots when your ideal customer will be listening.
Industry Expert Recommendations
Experienced professionals recommend spending the first two years building your marketing. Take the position that you are spending money for long-term profits – not short-term gains.
If you want more information on useable marketing strategies or help with the more complicated marketing options, don’t hesitate to reach out.
We would love to discuss several options to fit your goals and marketing budget.
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