Marketing Money

Years ago, a plumbing company would purchase the largest ad they could afford in the Yellow Pages and the phone would ring. As a matter of fact, many new plumbing companies would not open their doors until the Yellow Pages were starting to be delivered to the public. Unless your company was absolutely terrible, you could always generate work from the ad in the Yellow Pages.

Today the Yellow Pages are dead and Google is king. You need a great website with constant SEO (Search Engine Optimization) to climb to the first page of the search engine. Most people seem to call the companies listed in the upper half of the Google page quicker than anything else. It takes time, great content on your website, and money to get on the first page. Don’t invest too much in Pay Per Click; put the money in the generic search for the long haul. The PPC, as it is called, is a throttle. When the phones slow down, you crank it up. When you are busy, you turn it down or off. It saves you a lot of money controlling it and the flow of your work load.

How much should a service plumbing company be spending on marketing? I ask that question because most don’t have an answer. And what return should we be getting from the marketing dollars we spend?

In today’s market, 5% of sales is a good number. At one time, 10% was the standard if you wanted growth. So, a one-million-dollar company should be spending at least $50,000 per year to let the public know you are there. If you want more rapid growth, the figure goes up.

I encountered a lead generating company recently that said for $3,500 per month, they would guarantee to double your money or it was free! That is no deal at all. For every marketing dollar you spend, the rate of return should be 10 times! So, a monthly investment of $3,500 should produce $35,000 in monthly sales revenue. If you are not getting that ROI, you are wasting your money. Think of it this way. If your Operating Profit is 20%, $7,000 in sales revenue will only produce $1,400 in profit. With my math, I just lost $2,100. That is no deal.

How do you measure how your marketing is doing? Simple. Just ask the customer when they call. “How did you hear about us today?” and write it down, or note it in your software. Compile a report monthly to find out how many new customers you obtained and how many dollars in sales they generated. If it is not at least 10 to 1, or close to that, you are wasting your money. Don’t let your web company blow smoke with a bunch of statics and acquisition cost figures. That is all good information, but it does not make you money. The sales and profits that marketing generates is how you pay your bills and make a profit for your business. I have seen internet companies say that a 4 to 1 return is great; for them maybe, but not for you. 10 to 1 ROI is the key to well spent marketing dollars.

You don’t have the money to market your business? Then you are not charging enough and that is a whole other topic.

If I can help you enhance your business, contact me at This is what I do all day, every day!

The Plumbers Coach™. Detailed personalized business coaching and training for plumbing contractors. Like us on Facebook @ThePlumbersCoach, follow us on Twitter @T_PlumbersCoach and on LinkedIn @KeithGlass1. Get your day started right with The Daily Quote on our social media pages or subscribe to the email.

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