Why Setting a Marketing Budget for Your Landscape Business Is Critical
—
The Content Team,
HALSTEAD.
Originally published on July 27, 2015. Updated on September 30, 2022.
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You’ve just finished a busy warm-weather season as a landscape contractor and, finally, have a chance to breathe. After months of taking on outdoor living construction projects, creating landscape designs, and maintaining beautiful landscapes, the work has begun to slow down, and the stress of wondering how you’ll keep your business afloat during the cold weather season.
If you are always scrambling to find work when cold weather arrives, you don’t have an effective marketing strategy and likely aren’t investing in one. Top landscape contractors have a steady flow of work because of the consistency they put into their marketing efforts all year—which can be built around a marketing budget.
Why Including Marketing in Your Budget Is Important
Competing in the landscape industry means budgeting for marketing, even during slow seasons. Marketing keeps your brand top-of-mind, improves customer retention rates, and brings money into your business. These factors are important for the green industry because of the fluctuating seasonal demand.
Successful firms consistently generate and nurture high-quality leads and grow their businesses by investing in marketing. Changes are inevitable, and you can’t depend on your existing customer base to drive profits. Your best customers could move far away, or a new competitor could enter the market, threatening to take away business.
Simply throwing money at the problem once it arises isn’t going to fix it either—in fact, a good marketing plan avoids the issue altogether. Successful landscape contractors are consistent in their marketing efforts no matter what.
Typically, current marketing efforts target projects six months out. For example, amid the busy summer season, marketing efforts will be directed toward acquiring snow and ice management customers. During the winter, efforts will be directed toward lawn care and landscape construction.
You cannot have an on-again-off-again relationship with marketing. Your efforts must be consistent to see results—even in the slow season. Often, the marketing budget is the first thing to go when making budget cuts, but it shouldn’t be. It’s the heartbeat of your company, and without it, you won’t acquire the new customers you need to establish and maintain a healthy business. Your spending may change, but you should always budget for marketing.
How Much Should Landscape Contractors Invest in Marketing?
This highly debated question can quickly get confusing, especially since most sources suggest the ideal annual sales revenue percentage you should invest is somewhere between 3% to 30%, a range that is far too broad to be helpful.
The U.S. Small Business Administration (SBA) recommends that small businesses with revenues less than $5 million allocate approximately 8% of their revenue to marketing. If your landscaping business generates $2 million a year in revenue, your marketing budget would be $160,000 based on an 8% allocation. For the outdoor living professional, this budget includes fees for your website, social media, advertising, portfolio design, truck lettering, and branding pieces such as landscaping brochures, business cards, and even employee uniforms.
While investing in proper marketing is critical to the success and longevity of any landscaping business, it’s safe to say that most landscaping companies with revenue under the $5 million mark are not investing 8% in their marketing. However, you get what you put in, which is true for marketing spending and effort.
In this scenario, the same landscaping company with $2 million in yearly revenue invests 4% into marketing, a percentage that cuts the SBA’s recommendation in half. This investment amounts to $80,000 per year to invest in increasing website traffic, driving more qualified landscaping leads, and selling more landscaping projects.
At HALSTEAD, we generally recommend starting with a minimum of 2% of yearly sales revenue that is spent solely on digital, and our systems begin at $70,000 per year. As your business grows, you can tweak this number as it is needed.
You may need a more aggressive approach to bring in customers when you're just starting. As the business grows, you might spend a slightly less percentage—depending on your current business goals.
First Steps to Creating a Marketing Budget for Your Landscape Business
Rather than setting an arbitrary number for your marketing investment, decide how much to spend based on factual data and how comfortable you are with the spending. Remember that you get what you put into it—risk is always involved.
What Are Your Business Goals?
Increased revenue is the ultimate goal for any business, but it takes time to achieve. Decide how quickly you want your business to grow, how comfortable you are with taking a calculated risk, and how aggressive you are willing to be with your marketing efforts.
Is your goal to get as many clients as possible? Or perhaps your goal is to target high-end luxury projects, which requires a more strategic marketing approach that yields fewer clients but higher revenue.
Business goals change over time throughout the different seasons of your business. When starting, your marketing approach will be more aggressive as you grow your business. Once established, it might slow down—but it doesn’t stop. You can only determine a marketing budget and set your goals when you know your business's current performance data.
2. Be Aware of Your Business Numbers
How much is a client worth to you over a lifetime? How much are you willing to spend to acquire a new customer? When you understand how much a client is worth and the approximate cost it takes to attain them, you can use this information to direct your strategy.
If you don’t know how your business is performing, how will you know when you’re making progress? Knowing your starting numbers allows you to see the impact of your marketing efforts. Establish key performance indicators (KPIs) to track your progress. You can use this information to spend your marketing budget wisely with data-based decisions.
Choosing a Marketing Strategy to Get a Higher Return on Investment (ROI)
Almost 50% of marketers report that inbound marketing produces a higher ROI than outbound marketing and results in higher quality leads. Effective content marketing draws your ideal prospect into your business via attraction marketing. It often does not come across as marketing but as helpful content that answers a potential customer’s question or meets a need— while establishing your business as an industry authority.
What Is the Most-Effective Marketing Tactic?
A fundamental place to allocate your marketing budget is your online efforts, especially with search engine optimization (SEO) efforts, so that potential customers can find your business. The customer journey typically begins online with a simple Google search. With almost 68% of all clicks occurring on the first five organic search results, earning a place at the top of the search engine results page (SERP) is essential.
Investing a large share of your marketing budget into content marketing is an effective strategy. High-quality content on your website serves as your front-line sales team; it helps build trust, pre-qualify leads, and increase conversions. Content marketing is an investment that builds over time, with content creation that meets the prospect at every stage of the customer journey—from awareness to conversion.
Relying solely on organic search isn’t enough. Combine your website SEO efforts with paid posts and ads on Facebook and LinkedIn, and you will see better results than a siloed approach.
Using numerous marketing methods multiplies your efforts. Consider the events you might attend, such as home shows. Invest in a good customer resource management (CRM) tool to streamline your efforts. Always invest in high-quality photography and videography for use across marketing channels and methods.
Having a clear message in your marketing is essential. Know who you are marketing to, residential or commercial, and laser focus your messaging. Both markets require a different marketing approach, so which marketing tactic is most effective will depend on several dynamic factors.
How Should a Marketing Budget Be Spent?
There is no one answer to this question because it depends on your unique business and the results you are seeing with your current marketing efforts. Relying on the expertise of a marketing specialist will help ensure every dollar yields the highest ROI, but simply put—stop spending money on marketing efforts that are not generating leads or closing sales. When something is working, keep investing money in that area.
If you are tracking your numbers for the first time, you must start somewhere. You know your business best and can make an educated decision on where to invest your marketing budget. Beyond that initial investment, pay close attention to the numbers. Your marketing decisions should be based on concrete data.