A marketing budget is a critical investment for any contractor looking to attract more clients, generate quality leads, and scale their business effectively. However, one of the biggest challenges contractors face is how to set a realistic marketing budget, where to allocate funds, and how to measure return on investment (ROI). Spending too little can result in missed opportunities, while overspending without a clear strategy can drain resources without delivering results.

By strategically managing your marketing budget, contractors can ensure their advertising dollars are being used efficiently, leading to higher lead conversion rates, stronger brand awareness, and sustainable business growth.

In a recent podcast episode, Paul Sanneman, founder of Contractor Staffing Source, sat down with Angela Kiel from Business Development Resources (BDR) to discuss the best practices for setting and optimizing a contractor’s marketing budget.

Angela, an industry expert specializing in HVAC, plumbing, and electrical marketing, provides actionable insights that help contractors stretch their marketing budget further, maximize returns, and build lasting customer relationships.

If you’re a contractor wondering how to make the most out of your marketing budget, this blog breaks down the key takeaways from the discussion so you can implement them into your business today.

How Much Should Contractors Spend on Marketing?

One of the biggest questions contractors face is: How much should I be spending on marketing?

Angela provides a simple formula based on industry benchmarks:

• 3% of revenue – For businesses in maintenance mode, just keeping things steady.
• 6-7% of revenue – For contractors looking for moderate growth.
• Up to 10% of revenue – For companies aiming for aggressive expansion.

Example: If you run a $3M HVAC company, your marketing budget should range from $90,000 to $300,000 per year, depending on your growth goals.

Set a clear marketing budget that aligns with your business objectives to ensure consistent lead generation and growth.

Where Should Contractors Invest Their Marketing Budget? SEO vs. PPC

A well-balanced marketing strategy includes both SEO (Search Engine Optimization) and PPC (Pay-Per-Click), but how much should you allocate to each?

Angela recommends:

• Up to 30% of your marketing budget should go toward SEO and website optimization.
• PPC (Google Ads, Facebook Ads, etc.) works best when combined with strong SEO strategies.
• Google Business Profile optimization is essential for increasing local visibility.

Investing in SEO and a well-optimized website will enhance PPC performance, leading to higher-quality leads at a lower cost.

Measuring Marketing Success: Are You Getting Real ROI?

Many contractors spend money on marketing but don’t track performance metrics effectively. Angela emphasizes the importance of monitoring conversions and customer lifetime value.

Industry benchmarks for lead conversion:

• 1 in 4 inbound calls should convert into booked jobs.
• Tracking every marketing campaign helps identify what’s working and what’s wasting money.
• Understanding customer lifetime value ensures that marketing investments generate long-term returns.

If your marketing efforts aren’t leading to qualified leads and booked jobs, it’s time to reassess your strategy.

Customer Retention: “Owning the Home”

Acquiring new customers is important, but keeping existing customers coming back is even more valuable. Angela shares strategies to build lasting relationships with clients to increase repeat business.

Simple but effective retention tactics:

• Branding materials – Use magnets, stickers, and chip clips with your company’s logo so customers always have your contact info on hand.
• Email campaigns & text marketing – Stay top-of-mind with customers by sending reminders, promotions, and follow-ups.
• Proactive customer engagement – Check in with past clients to offer additional services and ensure satisfaction.

Repeat business and referrals come from strong customer relationships—not just one-time transactions.

Leveraging AI for Smarter Marketing

Artificial Intelligence (AI) is changing the marketing game, and contractors can use it to increase efficiency. Angela discusses how AI-powered tools like ChatGPT can help with:

• Content creation – Generate blog post ideas, ad copy, and social media content.
• Market research – Analyze competitor strategies and customer trends faster.
• Automation – Streamline customer follow-ups and email marketing campaigns.

AI is a powerful tool, but human oversight is still needed to ensure marketing messages remain engaging and authentic.

WATCH THE FULL EPISODE HERE:

Let’s Build Community and Winning Teams Together!

Marketing is just one piece of the puzzle. To truly grow your contracting business, you need the right team and the right marketing strategy.

✅ Paul Sanneman helps contractors hire top-tier employees to build successful teams.
✅ Angela Kiel offers complimentary SEO and Google audits to help contractors identify growth opportunities and increase visibility.

Ready to find your next great hire? Contact Contractor Staffing Source today and let us help you build a reliable, skilled team for your construction projects.

Navigating the complexities of recruitment in the construction industry doesn’t have to be overwhelming. With Contractor Staffing Source by your side, you can confidently tackle hiring challenges, avoid unnecessary setbacks like offer rescissions, and create a team that drives your projects forward.

For a more detailed understanding of how CSS can transform your recruitment process and ensure a perfect alignment with your company’s culture, visit our website at Contractor Staffing Source. Should you wish to have a direct conversation and tailor an approach suited to your unique needs, please reach out to Paul Sanneman. You can contact him at Contractor Staffing Source by phone at 858-727-0165 or email [email protected], or book a time to meet today to ensure a dedicated and personalized service.

For more insights and tips on contractor recruitment, continue to follow our blog at Contractor Staffing Source. Don’t forget, you can also gain further valuable industry insights by joining us on the Business Success Tips Podcast available here: YouTube: @BusinesSuccessTips

Let Contractor Staffing Source be your trusted partner in forging a stronger team, tailored to the unique culture of your construction company. Together, let’s build your future.