% of income spent on marketing?

Discussion in 'Business Operations' started by paponte, Jan 24, 2006.

  1. paponte

    paponte LawnSite Silver Member
    Posts: 2,366

    Just curious to see what kind of percentages guys in here are spending on marketing if any? Alot of times in business this is something that gets overlooked. I hear all the time from guys "I'm happy with the current accounts I have now, I don't want anymore". What about when a couple all of a sudden drop you for no reason? People move, they start doing it themselves. Things happen. Is marketing something we leave till when something does arise? Or are we prepared for what the industry throw at us? :)
     
  2. Edgewater

    Edgewater LawnSite Senior Member
    Posts: 457

    I think that marketing should not be looked at as a percentage of sales. Everyone should look at what they want thier marketing campagin to accomplish and assign a cost to that.

    That being said, the budget does have to be reasonable. I spend about 5% of sales on marketing.
     
  3. paponte

    paponte LawnSite Silver Member
    Posts: 2,366

    Wow! Maybe this is the reason for all the threads "getting new customers???, lost another one to a lowballer, etc". Amazing!
     
  4. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    P, what do you mean? My business is at 1% of sales and that is 100% unconventional... you wont even find my phone number in the phone book. I know this is low, but I enjoy it that way.
     
  5. Mower For Less

    Mower For Less LawnSite Senior Member
    Posts: 823

    I am currently at about 10%. I am including all costs, including labor to distribute flyers, newspaper ads, biz cards, etc..

    Kevin
     
  6. RHayden

    RHayden LawnSite Member
    Posts: 123

    1% to 1.5% here as well.
     
  7. Mower For Less

    Mower For Less LawnSite Senior Member
    Posts: 823

    Forgot to mention I had 150% growth from 2004 to 2005 ytd grosses.
     
  8. LawnsRUsInc.

    LawnsRUsInc. LawnSite Senior Member
    from midwest
    Posts: 916

    Well as a common rule a company that wants to grow should spend 10% of thier gross co. income on advertising. I spend 6% and i get an average of 100 new customers a month that call. In march to june i was getting 300-350. But i have found that 6% is way to much for me to handle. With a 280% in gross sales from 2004 to 2005.
     
  9. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    In this business, I would think 5% would be plenty. Years in business will play a factor too.
     
  10. paponte

    paponte LawnSite Silver Member
    Posts: 2,366

    Mac, I guess I should have worded it as percent of expenses. Either was I pretty much means hte samething. I just think it's inportant to allow money for some type of marketing. Whether it be signs on trucks, yellowpages, local paper, direct mails, etc.. Not picking on you in anyway, but how do you say that you like it that way? Do you not want to expand your business at all?

    I think 5%-10% would be a fair value, depending on how much growth companies are looking for. It's a VERY important part if business that alot of companies do not take into consideration. payup
     

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