Advertising = X% of Gross?

to be clear it’s not actually valpak, just something like it. i don’t know if that makes a difference.

i have a pretty low key market, i’m probably doing twice the marketing as the next closest guy but i’m not doing more than most on this forum, almost all the other winfow cleaners around here are solo operators and many of them don’t have great reputations.

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[quote=“leavingnc, post:22, topic:36146”]
almost all the other winfow cleaners around here are solo operators and many of them don’t have great reputations.
[/quote]Are we in the same area? LOL.

Well yeah… It makes a difference. Will you PM me the name if you don’t want to post… That would be cool. I may want to use it too.

i looked them up, they seem to just be local, our town and the next closest large town (75 miles away)

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I slowed down on my advertising expenses, with the exception of completely revising my business card, while I reviewed better mediums to target customers. Came up with some good targeting a couple of days ago.

While I was cleaning the windows of a real estate brokerage I asked the broker for the addresses of all the listings so that I could make WC bids. He was quite enthusiastic, as his brokerage would have no costs for improving the curb side visibility/marketability of their listings. This symbiotic relationship helps me a lot because I know that the agents are better salesmen than I am. I was a low earning real estate agent many years ago so I am very aware of my limitations.

Then the gears started turning and he realized that my service would give him a competitive advantage as “the brokerage that is always improving customer services.” He offered me time and testimonials on his weekly one hour “Radio Realty” show with the option to pay with WC at the brokerage and the radio station. I like to barter my services so I am very willing to give this a try for a couple of months.

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have not read all of these.

1st business partner would not go above of 3% of forecasted sales. He actually was happy when we only spent 1% of sales on forecasting.

We divorced

in the past 5 years I have spent 10% of forecasted sales on marketing. Doubled my pricing and remained busy.

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I don’t really focus on percentage of sales for my marketing budget… I mean I check it but it’s not my goal. I look at where I want to be and work backwards from that… And if that means I have to spend 12% of sales… Then I make it happen.

With that said

In growth years… We are 10-15 %
In non growth years… 5-8%

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Similar situation for me. The previous owner of the business is a great guy but he spent less than 1% on advertising over the last three years. I designed, printed and distributed the business cards for him and myself.

The business had a net loss of accounts for those three years. 75% of the new business was from leads that I developed. I am also getting a slightly better margin from up sales.

Working with real estate brokerages is working for me. I have done WC at 2 of the brokerages and have got referrals that paid off. The first was a 52 pane WC int/ext. The second was a partial carpet cleaning that became an upsell for all the carpet and all the WC, int/ext. Now I am working with another brokerage on a WC int/ext and some easy CCU (wiping, vacuuming, mopping, NO window stickers removal).

We’re are you located ?

Nor Cal

interesting how you and Chris have said similar

under 10% keeps the status quo, probably just replacing attrition which usually is at 7-10% so probably the correlation

over 10% and you both see growth

nice

of course as you have said, a smart spending of 10% not just willy nilly spending

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It’s imp[grant to consider the different factors that determine what percentage your company needs to to spend to produce the end result your looking for.

I’m with other guys in that the issue is not determining the needed percentage but determining your goals and then devising a strategy to get there. That said I understand a need to here people’s numbers when you are starting out as it gives you some expectation of what your budget might look like do you not just shooting in the dark.

The problem is there are several different factors that influence that percentage that many fail to consider. Take for example factors like your pricing, your closing rate, how well you captitalize on each sale in terms of upsales, how good is your referral program to maximize the roi of your initial marketing, your level of service etc. All of these factors and more determine your over all roi on your marketing dollar and ultimately dictate how much money is needed to reach your goals.

Phylosophy of business also plays a factor. Some guys take a shot gun approach and just mass market and fish with a net but drag all kinds of fish (many not worth keeping) into the boat. Other guys have a niche and target a specific market which affects both the response rate and the initial a mount of each sale. If I target high end homes with an average sale of $700.00 a pop and an average up sell of $700.00 them I am getting a gross return of $1400.00 on each sale. Compare that to an average sale of $300.00 on mass marketing with an average upsale of $200.00, making my gross return of $500.00. When you compare the two it’s easy to see the mass marketing approach is going to require much more marketing to reach your goal of it is gross sales. That said mass marketing vehicles tend to cost less compared to specialised marketing to reach higher end clientel.

I could go on but long story short it is important to consider many of the factors that determine how much you need to spend on marketing to reach your goals and to set a budget. Just something to think about.

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To achieve x amount of growth… The rule of thumb is to spend 10% of x. So if I want to add $100k… Then my budget needs to be around $10k of planned marketing/branding.

To also add… My personal formula to sustain sales and keep the brand out there is to spend at least 5% of the previous years sales as my base marketing budget. Then I look at potential growth…new markets… and where we want to be going forward. I take that number and start with adding 10% of that to the existing 5% from last years sales. Obviously we tweak it and there is a lot of thought about what we are sending out and how we target but yeah…that’s my personal formula…I don’t know if it’s the best but it works for me.

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I think (if I remember right) you have several trucks on the road. I’ll also assume you are in a bigger market.

My question is, is the vast majority of your marketing, to target clients, or do you blanket with EDDM or flyer type marketing?

I’m more like @whatapane in the respect I am in a small market, and target the wealthier clients. Most blue collar guys can’t/won’t afford me. My average ticket exceeds 400 and I only clean glass at this point.

I just started with SendJim and I am curious to see what kind of results I get with it. Referrals and internet marketing up to now, have been my biggest source of new clients.

Main market is 120k population… We mainly work out of 5 subdivisions where home values are 300k-600k avg. we are expanding into another market that is 35-45 minutes away… Average house is 400k-1mil… 6x the amount of households. We do not blanket advertise. We hit select postal routes 4 times in the spring and 4 times in the fall. We have a big Facebook campaign as well. We also put alot into seo work.

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Thanks for the reply. It sets in my mind, who you target and how you get there.

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My 2016 advertising expenditures looks like it will finalize at 4.9% of projected gross revenues.

I bought a company with preexisting service agreements and clients but had I growth, even though the company had been losing accounts the previous two years. The advertising expenditures look like they will finalize at 15.5% of the projected gross revenues from growth. Seems like a chunk but the expenditures are producing some jobs and recurring service accounts in 2017. Those jobs and accounts are not part of the projected gross.

Some of this is a bit fuzzy since some of the growth was from referrals and some was from upsells to existing clients.

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