The nation’s biggest replacement contractor firms spend roughly 10% of their revenues on marketing, according to data from the 2018 Remodeling 550.
That mean is based on responses from the 146 firms that responded to the annual survey. Forty-two percent of that group, or 62 of the 146, were clustered in the 6% to 15% range.
The No. 1 marketing practice cited by the firms involved little to no expense: repeat customers and word-of-mouth advertising. A total of 69% cited word-of-mouth as one of their top three marketing activities. Website activities and search engine optimization (SEO) came in second, cited by 59% of all firms as a top-three source.
For companies spending less than 10% of their revenue on marketing, the numbers are even bigger: 80% of those firms rely on word-of-mouth marketing, and 75% rely on SEO optimization.
Replacement firms who spent more than 10% on marketing also use word-of-mouth, but favored events/home shows (58%) and internet pay-per-click (48%) more than SEO optimization (40%).
Outside of repeat customers/word-of-mouth marketing (which was still just 57%), there was no dominant strategy by firms who spent more than 10% of revenue on marketing. Direct mail, internet-purchased leads, TV ads, and door-to-door canvassing all clocked in at 24% or higher.
Wallisch, Sean