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Advertising & Math

Discussion in 'Lawn Mowing' started by Scagg Mann, Jan 15, 2010.

  1. Scagg Mann

    Scagg Mann LawnSite Member
    Posts: 28

    We are a mid size lawn company looking to expand about a 100 to 125 customers or the equilvevent with commercial accounts. What is your average cost you pay to pick up a customer? It's something many people don't think about. We are getting to spend about $6,000 to $9,000 in advertising. I was thinking this will cost us about 60 to 90 per lead not counting I give one free mowing to most on their first months bill. But over say just three years they will bring us in no less than $3600.00 to $5,500 per customer. Do you feel this is high?

    I may get plenty of leads by spending less and we can cut off our advertising if we get to our goal but that is what I have budgeted so far;internet, direct mail, signs, etc.

    Good Luck this year should be interesting with the economy. I just lost an account by someone underbidding us by 40%. And it was a legit company who got it. Wow! I hope this is not what were in for!!*trucewhiteflag*
     
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    You know I figured it out well past that, I figured out roughly how long it
    takes me to cover the cost of advertising itself.

    For example, lets say my advertising costs 3 thousand a year.
    Now one might assume this means 3 thousand worth of work will cover it,
    but that is wrong, it takes closer to 30 thousand worth of work to pay that.

    NOTE: Can't do this next part without some sort of established customer base!!!

    It's also not to say I have absolutely no advertising, but I sure am cutting out a BIG fat chunk of it.

    So...
    I knock off 10% on my rates and give the customers all a discount, skip the nasty portion of the advertising bill and see you next year.
     

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