Q4 is here, which means your calendar is likely reminding you to plan next year’s marketing budget. If you’re like most contractors, you have a love-hate relationship with budgeting.
On one hand, it’s time-consuming and you have many other pressing tasks. Yet on the other hand, it’s insightful to step back and assess how things performed in the previous year and plan exciting initiatives in the coming year. By planning ahead and instilling a proactive action plan into your marketing budget efforts, the yearly marketing budget exercise can be stress-free and even productive.
Don’t dread creating your marketing plan this year – Love it
Start by getting organized. Whether you already have a rock-solid system in place for tracking your budget or are starting from scratch, a few basic disciplines can help make the process easier to manage and more accurate.
Keep up with recording. If it’s too late to keep proactive records this year, don’t worry, you still have time to get items gathered up. keep up with the recording of costs, budget fluctuations, and performance KPIs on a regular schedule—weekly, monthly, or quarterly depending on your workload and preference.
Improve processes and create efficiencies where needed. Simple tasks like coding invoices correctly before they’re handed off to accounting can save you time and avoid the “wild goose” chase scenarios that sometimes happen. By taking the time to reduce repetitive and unnecessary activities, you’ll be more accurate in your reporting and avoid wasting resources.
Now that you’ve got your housekeeping in order, it’s time to roll up your sleeves and review the campaigns and initiatives that worked in your last 365 days of marketing activity, the activities that didn’t perform to your liking, and those that fall somewhere in between.
A good place to start your baseline planning is to define repeat activities that are non-negotiable. These are baked into your marketing plan year after year and will most likely be there next year. This list might include your industry’s largest trade shows or initiatives already contracted for the following fiscal year. This may also include your marketing infrastructure initiatives like branding, consulting and agency fees, website design, development, and public relations costs.
(Note: an effort should not necessarily be repeated if it’s not meeting certain KPIs, just because it’s always been done.)
A great next place to look is at your top performing efforts. These campaigns earned their stripes and should be recommended for a portion of the marketing budget spend next year for good, measurable reasons.
It’s always a good idea to stay on the lookout for places where you might be wasting precious marketing dollars. It’s common to sign up for an expensive tool and then forget to cancel it even though it’s not delivering value, or to automatically reorder print materials that aren’t needed or earmarked for any particular purpose. Sound familiar. (Might be time to trim a little fat.)
Finally, determine a percentage of your marketing budget to be dedicated to testing new initiatives. These initiatives will vary based on business objectives, industry trends, and the latest marketing techniques. They’ll carry some risk but can also lead to growth and insight into your marketplace.
Marketing Budget Benchmarks for Home Service Contractors
For 2025, home service contractors should allocate marketing budget strategically across channels that drive booked jobs. Here are recommended benchmarks:
Overall Budget: 5-8% of annual revenue for growing contractors; 3-5% for established businesses with steady demand. Unlike traditional marketing percentages, performance marketing links budget directly to cost-per-job and cost-per-lead metrics.
Budget Allocation by Channel:
- Digital (Google Ads, Local Services Ads, SEO): 40-50% – These channels deliver the highest intent, fastest results, and best tracking.
- Direct Mail: 15-25% – Particularly effective for seasonal campaigns and geographic expansion.
- Website & Content: 10-15% – Essential foundation for all other efforts.
- Call Tracking & Analytics: 5-10% – Critical for understanding which channels actually book jobs.
- Social Media & Email: 5-10% – Supporting channels for brand awareness and lead nurturing.
- Local Reviews & GBP Management: 5% – Drives credibility and local search visibility.
Cost-Per-Job Targets:
- HVAC: $150-350 cost per booked job
- Plumbing: $100-300 cost per booked job
- Roofing: $300-600 cost per booked job
- Electrical: $150-400 cost per booked job
If your cost-per-job exceeds these ranges, it’s time to audit your marketing channels and eliminate underperforming tactics.