Quick … how much did an average lead cost you this year? Not the industry average, that is, but yours? How about marketing cost as a percentage of revenue for your home improvement business?
Many of you can answer those questions quickly. If you can’t, the question is: Why not?
The easy answer is that you don’t have good tracking mechanisms in place. But maybe the bigger issue is that you didn’t have a good plan to begin with.
We’ve been talking about the necessity of a well-thought-out home improvement marketing plan. And to me it’s as simple as this: Marketing is a make or break part of your business when it comes to margin. Labor, commissions, COGS and even overhead—while they’re certainly not fixed costs, they do offer a limited amount of control without affecting the products and services you provide your customers.
Marketing is really a delicate balancing act and, as such, demands planning.
Here are what I consider to be the five most important phases and questions to ask yourself when developing an effective plan.
Phase 1: Assess your current state.
- What has worked for you this year? What hasn’t?
- Are you targeting the right people? Who are the right people? (Hint: A great place to find these answers is by comparing gross sales to net sales.)
- Have I diversified enough?
Phase 2: Decide which segments to target in 2019.
- What means will you use to target each segment? (This will be the subject of our December conversation, by the way.)
Phase 3: Determine how much revenue you should anticipate each segment to generate.
- What am I willing to spend to generate that amount of revenue?
- Will that spending truly get me to the revenue level desired?
Phase 4: Develop tracking mechanisms.
- Although there will be a delay between spending and recognition of associated revenues, monthly tracking is a necessity.
Phase 5: Review and pivot where it makes sense.
- Very few segments require some form of yearly contractual commitment.
Since phases two and three are really the nuts and bolts of a successful home improvement marketing plan, we’ll devote our entire December conversation to segmentation, revenue generation and cost.
Happy Thanksgiving!