There are two major questions that are commonly asked by lawn care and landscaping business owners around marketing: how much money should be budgeted and how should that money be spent?
In this article, we’ll share the average amount of money that Lawnline Marketing’s clients are investing in their marketing each year. We’ll also address questions around creating your own budget and how yours should be adjusted.
Marketing Budgets by Revenue For Lawnline Marketing’s Clients
The marketing budgets outlined in the table below mean nothing without understanding the context. These budgets are the average dollars spent by Lawnline Marketing’s clients based on their desired growth rates. Each company evaluated for this dataset has different goals, service offerings, customer lifetime values, and variable market competition.
* The data has been rounded and estimated where needed. Lawnline Marketing only works with companies over one million in annual revenue. The numbers for smaller companies are recommendations.
General Percentages of Revenue Going Toward Marketing
As a generalized rule of thumb, the following percentages of top-line revenue are being budgeted for marketing by lawn and landscape companies:
Adjusting the General Budgets
The data shown above helps provide a general starting point for determining your marketing budget. However, in the lawn/landscape industry, there are many other factors that can come into play when adjusting these numbers up and down. Let’s take a look at these factors and how they impact your budget.
How to Calculate Your Marketing Budget
Determining your specific marketing budget can be difficult, especially for newer/smaller companies, or for companies that haven’t done a great job of tracking their cost-per-lead and customer acquisition rate.
Most companies will start creating their marketing budget by looking at revenue goals. For example, if you want to add one million in top-line revenue, you may determine that you need to have a certain amount of marketing dollars to reach that goal. In the lawn/landscape industry, I believe that the ability to scale your operational capacity should determine your marketing budget, as that will be far more difficult than bringing on new customers. My simple formula to calculate your marketing budget would be:
|Marketing Budget = Scaled Customer Capacity * Customer Acquisition Cost|
In the most simple terms, if you have the ability to scale your operations to service another 1,000 customers this year, and you know your customer acquisition cost is $100 per customer, then your marketing budget needs to be $100,000.
But, it’s not always that simple. Most lawn/landscape companies don’t track their marketing efforts well enough to know their true customer acquisition cost when it comes to the actual marketing strategies, where those customers are coming from, and other important questions that need to be answered to use the formula above. Here are some questions to consider when creating your marketing budget.
How strong is your company’s SEO or authority? Is your website and business ranking organically on search engines like Google without having to pay for ad placements? Organic rankings deliver higher volume and better quality leads compared to paid ads, and you don’t have to pay for them! The stronger your SEO and authority, the less you need to budget for paid ads.
What is your current cost-per-lead per strategy? If you’ve done a great job of tracking your marketing data, then you’ll know which strategies bring the best cost-per-lead. Tracking your cost-per-lead doesn’t necessarily turn into calculating ROI, but provides half of the equation.
What is your current customer acquisition rate per strategy? This is the other half of the equation for calculating an ROI on your marketing strategies. If you know which strategies deliver the best acquisition rate, you can combine that with the strategy’s cost-per-lead to understand the cost-per-acquisition.
With an unlimited amount of leads, how much can you truly scale your operations? It doesn’t matter if one BILLION leads come into your company if you can’t service them. You must consider recruiting, equipment, locations, and all of the other aspects that come into scaling your business when considering marketing budgets.
Using the answers to the questions above, you can better understand what your customer acquisition costs are to calculate your marketing budget. Knowing this data will also help guide you in planning your marketing efforts by dropping the strategies with the lowest ROI and investing more into the higher-ROI strategies.