How much should a roofing company spend on marketing? That depends on a series of factors unique to each organization. It depends on their growth goals, current positioning, and how competitive their market is. It depends on whether they have an established online presence and proven campaigns already generating returns, or are still trying to find their footing online.
There’s no universal answer to the question, but there are two proven frameworks that can help you arrive at a number that makes sense for your business today-,and accurately forecast where you want it to go.
Here are two ways to calculate how much a roofing company should spend on marketing.
Calculating Marketing Spend According To Revenue
The most common way roofing companies determine their marketing budget is tying it directly to existing revenue. Revenue-based budgeting provides a practical starting point. What can we afford to spend?
Established companies we work with typically spend 5-12% of revenue on marketing. They have moderate to aggressive growth goals and have existing campaigns in place that provide a predictable return they are comfortable will maintaining.
Those on the lower end (5-8%) are often in moderately competitive markets with solid reputations built over decades. They may have hundreds of reviews with older domains that correlate with higher credibility and SEO authority.
Those on the higher end (9-12%) are often in highly competitive markets and may not be as well known as their competition. These organizations are usually looking to capture more market share and develop an online presence that rivals more established roofing companies.
We’ve worked with companies that spend 3% of revenue and still grow. We’ve also seen companies spend 15% and struggle. In either case, the success or failure is often rooted in company practices and culture. One roofer may generate more referrals and positive reviews due to excellent customer service. Another may do equally outstanding work but does not have the systems or staff in place to create a comparable experience.
Calculating Marketing Spend According To Growth Goals
Another way to approach your marketing budget (and perhaps a more precise one) is to let your growth goals do the math for you.
An easy way to calculate this is to determine your current customer acquisition cost (CAC), calculate your average job size and determine how many new customers it will take to hit your growth goal. Let’s crunch the numbers.
If your average job size is $20,000, to reach $1 million in revenue you would need to complete 50 jobs. Let’s assume your CAC is $500.
To grow from $1 million to $2 million in revenue, you will need to add 50 new customers at a cost of $500/per customer = $25,000 in marketing spend.
This is, of course, if everything works out perfectly. If the economy is as strong as the time period you calculated your CAC, your ads are performing as well (if not better), and buying behavior, search engines, and weather stays consistent and favorable.
It is also very common for customer acquisition costs to rise as you scale for several reasons. Ads get more expensive as you widen your radius, you begin competing against more roofers, competitors increase their ad spend, and SEO requires more effort to expand your reach.
How Much Should YOUR Roofing Company Spend On Marketing?
The most accurate answer comes from a conversation between you and a marketing expert who has an understanding of your unique goals, challenges, and expectations. Schedule a free consultation today.
