How Much Should a Contractor Spend on Marketing?
There is no single right figure. Work out what you can afford to pay for each job you win, how much more work you can take on, and test from there.
The short answer
There's no single right figure. Your budget should come from your own margin, capacity and results.
Spend what you can afford to pay for each job you win, multiplied by the number of extra jobs you can actually take on. Start smaller than that, measure which sources produce paying work, and move money towards the ones that do. That is the whole method, and the rest of this page walks through it step by step.
You will see rules of thumb quoted online. We don't repeat them here, because a figure borrowed from another business tells you nothing about your prices, your margin or how busy you already are.
Why averages mislead
Two firms, two very different right answers
A roofer booked solid for the next two months and a builder with an empty diary next week should not be spending the same. Nor should a firm doing small repairs and one doing extensions, because the profit on each job is so different.
Marketing is buying work. The right spend is the amount that brings in jobs you can complete, at a cost that still leaves you a decent profit. Everything else is detail.
The method
Setting a marketing budget from your own numbers
Know what a typical job is worth to you
Use profit, not turnover. The price the customer pays includes materials, labour and overheads; what you can spend winning the job comes out of what's left.
Decide what you'd pay to win one job
Pick the most you would spend and still be glad of the work. This is your ceiling for cost per job won, and it will differ between small repairs and larger projects.
Be honest about capacity
How many more jobs a month could you actually take on without letting existing customers down? Buying enquiries you can't service wastes money and damages your name.
Know your conversion rate
From your own records, how many enquiries become accepted jobs? If you don't know, start tracking now. What is a good lead conversion rate? explains how to measure it.
Work backwards to a budget
Jobs wanted times your ceiling cost per job gives the most you should spend. Your conversion rate tells you how many enquiries that spend needs to produce.
Test one source at a time
Start below your ceiling, on one channel, for long enough to judge fairly. Ask every customer how they heard about you.
Review monthly and move money
Cut what doesn't produce jobs and put more behind what does. Measure against the true cost per job won, not clicks or enquiries.
Easy to miss
Costs that belong in the budget
Your time
Answering enquiries, travelling to visits and writing quotes all take hours. If you lose a day a week to it, that is a real marketing cost even if no invoice arrives.
Fixed commitments
Subscriptions, listings and website upkeep are paid whether work comes in or not. Check minimum terms before you sign, so a trial doesn't become a year.
Quotes that go nowhere
Every visit and quote for a customer who never proceeds is part of what the jobs you do win really cost. It is why conversion matters as much as price per lead.
Fixed or variable
Know which kind of spend you're committing to
Fixed costs
- Website hosting and upkeep
- Directory memberships and subscriptions
- Vehicle signage and branding
- Any agency retainer
Variable costs
- Pay-per-lead charges
- Pay-per-click advertising
- Leaflet drops
- Sponsorships and one-off promotions
Keeping score
Track three numbers and ignore the rest
You don't need marketing software to do this well. A notebook or a simple spreadsheet with three columns is enough: where each enquiry came from, whether it became a job, and what you spent on that source that month.
Clicks, impressions, profile views and 'leads delivered' are figures other people use to show you their product is working. They matter only if they end in accepted jobs. The three numbers above tell you what each source is costing you per job, and that is the one that decides where next month's money goes.
Keep it going through busy spells too. It is tempting to stop recording when the diary is full, but that is exactly the data you'll want when things slow down. The wider picture of where contractors get work is on the getting more work as a contractor hub.
Referrals, repeat customers, reviews and a well-kept Google Business Profile cost little or nothing to run. They still need regular effort, and they are usually the best-value work you'll get.
Where a network fits
Work that needs no marketing budget
Some contractors take part of their work through a network so that portion carries no marketing spend at all. In the Mortaro network there is no joining fee, subscription or per-lead charge. We generate the work, and you price each job at trade rate; our fee is added on top of your price in the customer's quotation, never taken out of it. How that works is covered in no upfront lead fees, explained and trade rates explained.
It isn't a replacement for your own marketing if you want to own every customer relationship, and we don't promise volume. For many firms it is simply one more source that doesn't need a budget line.
Straight answers
Marketing budget questions
Should I spend more when work is quiet?
Only on sources you've already proved. Panic spending on untested channels, especially ones with long minimum terms, is how quiet months get expensive. See the quiet season for builders.
How do I know if my marketing is working?
Count accepted jobs by source and divide what you spent by that number. If the cost per job won sits comfortably under your ceiling, it's working. When is a lead worth paying for? covers the judgement in more detail.
For contractors
Tell us about your business
Your trade, the areas you cover and the size of work you take on. A person reads every enquiry, and if it looks like a fit we will send you the full application.