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Marketing Budget

Discussion in 'Pesticide & Herbicide Application' started by Turfdoctor1, Jan 1, 2013.

  1. Turfdoctor1

    Turfdoctor1 LawnSite Senior Member
    Messages: 707

    generating revenue is about much more than just advertising. it's about relationships, good business decisions, and much more.

    We spentabout $3000 in phone book advertising (which returns basically nothing), spent $1000 on our website, $5000 on direct mail. About $4000 miscelaneous, real green support was lumped in that, lawn posting signs, etc.

    But, a good portion of the additional revenue was from word of mouth, landscape contracts, and other things that are not related to our marketing dollars.
  2. newguy123

    newguy123 LawnSite Bronze Member
    Messages: 1,096

    Bump for interest...
  3. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    Sure, Reputation is a big selling point as well as good closing tools. I do not do phone books at all.

    I do not do yard signs but some clients have offered to let me put some up.

    What do you think is most effective. I also do not pay per click either.
  4. Cadzilla

    Cadzilla LawnSite Senior Member
    Messages: 903

    That might get deleted. lol

    I don't advertise anymore and grow a steady 15-20% per year and thats perfect.

    When I did advertise and I had some nice professional stuff, I never saw anywhere near the kinds of returns boasted about on this forum.

    I may have seen a general return of two to three times my ad budget that I could tie directly to the specific advertising, and I considered that a windfall.

    Of course the thing with this kind of business is as time goes on your actual return vs investment gets better every day the longer you are able to keep that client.
  5. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,922

    A lot depends on your market, service area, etc

    Over the past few years I've seen steady growth of 15-20%. I'm a smaller company with sales under $200k and my service area is about small, my longest drive is 15 minutes.

    My advertising consist of web site, detect mail, lettered truck, and word of mouth/referall discounts. That might cost me around 3000-4000 per year.

    I am thinking of increasing my budget and sending more direct mail than the normal 5k cards once a year. I'm also possibly entering a new market if things work out.
  6. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,757

    Thats not realistic. We've mailed hundreds of thousands of postcards in our business life, and with this amount of volume you can clearly see response and close rates each year and year-year. Id be ecstatic with a 1% response but that isnt even realistic. My paid consultant echoes the same responses from other clients he works for too.

    Our marketing budget is supposed to be 15.4% of sales but I pull a fair amount from profit to fund our marketing efforts. 3-4 times return on your investment is a fair expectation if you have a great, compelling piece. Knowing that, you can see you can come close to doubling your business each year if you market correctly.

    Real green can do your marketing but there are other companies that will do a similar job at a lower cost. Dont think that you have to use their printing/mailing as you can export whatever you want out of your system.
  7. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    Notice I qualified the statement. :drinkup:

    I looked at real green again and it does seem if they do have a truck mount GPS system. In their brief overview it showed a lap top with a touch sreen. I will give them a call and inquire.

    Thanks for the feed back. I really have not spent much time advertising but I should. I know I have to get over the hump. Right now I live off all the profit my company generates. :cry:
  8. DA Quality Lawn & YS

    DA Quality Lawn & YS LawnSite Fanatic
    Messages: 9,228

    And don't forget you can't measure your ROI for marketing in just one season. Most customers come back season after season. That multiplies your ROI
  9. jc1

    jc1 LawnSite Silver Member
    Messages: 2,063

    So then what is a realistic response?
    Is it strictly dollars spent? For every dollar spent you should expect to gain four?
    Or is it for every 1000 pieces is 1% in response reasonable to expect (10 calls 5 new customers sold)
    How do you best determine the amount of mailers needed to achieve adding 1 customer?
    If you wanted to gain 100 accounts how many pieces should you expect to send out? And how many times?
    Do you send 1 time to 100,000 people?
    2 times to 50000?
    3 times to 25000?

    So if you we're to use eddm with a $25000.00 budget
    You could send about 120k cards.
    Do you expect to gain $100k in revenue ? 4x25k
    or 1% in customer growth? 1200 new customers?
    How do you take the 2 different expectations of dollars in sales and percent of customer growth. Then combine them into a tangible number so that you can formulate a marketing plan that allows you to achieve your goal?
    Does what I am saying make sense?
  10. Turfdoctor1

    Turfdoctor1 LawnSite Senior Member
    Messages: 707

    Wow, I didn't realize this topic would be such a hot one. i guess we are all twiddling our thumbs or getting nervous or something. haha.

    jc, with EDDM, I am expecting to get a much smaller response than with a more targeting mailing. Last year, we got probably 1.5% response from our mailing list, and about 0.75% from the EDDM. I guarantee less return though. You may get twice as many pieces for your money, but expect half the return as well.

    In order to send out 120,000, you have to have a much bigger market than what we have here! If your goal is to add 100 accounts, I would bet you are going to need about 20,000 EDDM pieces, or closer to 10000 direct mail. But, that is a complete guess.

    The marketing experts say you need to send multiple times, so 2 times to 50000, in your example. My experience is different. We have a small window in my area. If you miss that window, the rest of your marketing is a complete waste. Every time I do 2 mailings, the 2nd one is too late. I like going with 1 big one, but spreading it out over of drops to lessen the call burden.

    If I spent $25,000 with post cards, I would bet you would get about 60,000 post cards out. If your market is big enough to do that, and your target is all potential customers, I would hope for a 1% close rate. that would be 600 new customers. We average about $350-$400 a year per new customer. So, for us, 600 new customers would be about $210,000 in revenue.

    But, that is completely dependent upon your market. My market cannot sustain 60,000 postcards. We can only find about 10,000 addresses for our mailing lists. If I sent 60,000 postcards, I would be wasting about $20,000.

    My theory is this: Advertise until I can't handle any more customers, or until the phone stops ringing and the advertising is not working. I know my market. I know our strengths. I know what works for us.

    Good luck JC!

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