#241 What Would YOU Do With $1,000,000 in Marketing?

The people that I know that are growing the fastest over the past 2 or 3 years are running 1 to 2 channels up to like $100 grand a month.

The people who are scaling beat the horse till it's dead. If you have a few things that work really well, how can I double and triple down on them? Mainly through things that are actually actively getting you leads today.

The very first thing always is the lead. Nothing else can happen in the entire rest of the business without the lead. It's like a car without gas.

Yeah. The number one job I still have is lead generation.

Welcome back to Owned and Operated. I'm your host, John Wilson. I run a $30 million home service company in Ohio. Today on the show, I have Ethan Wright from Service Scalers. Service Scalers is a digital marketing agency focused on home service growth. Today we're talking about how we would spend $1 million on advertising. If you've been listening to the show for a while, you know that we've been big fans of Service Scalers. One of the things that they just dropped that we are really excited about is a pay-per-lead So what they help you do is they help you directly gain access to leads and scale up your lead partner program. Go to servicecalers.com and say we sent you. Someone gave you a million dollars.

It's a lot of money.

It's a lot of money.

Million dollars.

$83,333.33 a month.

You've thought about this.

Everyone's thought about this.

Yeah. Uh, first thing. I'd go buy a blimp for my company.

Yeah, yeah, yeah.

We were talking about that.

I mean, pure brand.

Yeah.

That would totally work, right?

Yes, 100%. Just fly it over Dallas all day. No, it's interesting and I'm excited to hear your thoughts on it because I think some companies would say, you give me $1 million for marketing, I spend $10,000 a month on marketing. That is a very big difference. For you, I think maybe you've probably thought about it a little more and have Um, some interesting takes, but my, my initial reaction to it for most companies is what has been working for you and do more of it, right?

Yeah.

Um, I think maybe people's initial reaction would be, I need to go and buy, uh, like get a big branded billboard or, you know, do all these things that we aren't doing yet.

Yes.

My opinion, and I'd be interested to hear what you would say, but if you have a few things that work really well, how can I double and triple down on them? Mainly through things that are actually actively getting you leads today. But I'd be interested, you know, in your position with where your business is, like if you've thought about this or if you literally got that check, what would you do?

Yeah. Yeah. I think, well, the quick profile on like who would spend $1 million. So Usual rule of thumb is like 10% at the top. Now, some people break it. So maybe like if it's a well-capitalized person, maybe they're coming in at like 12%. So it's an $8 million business or more realistically, 6 to 8%. That's what most larger companies, including us, spend. We spend 6 to 8%. We have for years. So that's like what, $14 million?

Yeah, $12, $14.

Yeah. So, so that's the, that's the size of a business we're talking about here. $8 million to $14 million would, would be spending $80 grand a month on marketing. And I totally agree with you. Like, I think, you know, we're entering the planning season, the sort of budget, depending on someone's budget practice, but like the budgeting season for next year.

Yeah.

And we're thinking about, oh man, you know, how do we grow? How, you know, we're entrepreneurs, how do we keep moving and doing the next thing? And I think spread is the first thing that people tend to do where— and we've done this too. Like, I'm super guilty of it. We're like, all right, yeah, I'm planning next year's marketing budget. I've got this 50-page or 50-line-item Excel sheet and we're going to do radio and we're going to do SEO and we're going to—

We've never done field marketing.

Do TV. Yeah, yeah, yeah. So what would help is for a framework is regardless of the size of budget, like million bucks is a lot. We're talking about $8 to $14. That's like 4% of the industry. So most of the industry doesn't even qualify for this conversation, but this can go down anywhere you go. It can also go up anywhere you go.

Yeah.

But what percentage of your budget are you spending on demand creation, which is TV, radio, billboards, the blimp? The blimp, the blimp that we're going to buy because we just got a million bucks. I wonder how much a blimp— it has to be tens of millions of dollars. There's 10 of them.

I don't even know if you could— I don't even know if I can fly it.

Yeah, yeah, I don't even know. So yeah, demand, demand creation or generation is like the branding efforts that you're putting out there, you know, TV boxes, sponsoring a Little League team, putting stuff in your church bulletin. And then what is demand capture? So LSAs, PPC, lead partners, how are we capturing people that are in the market to buy your goods or services?

Actively searching.

Actively searching.

And I need your service.

Yes. I am seeking someone to do this. Yeah. So demand capture. So people have different rules for how they think about this. And some companies really do well with a 50/50 split. Some companies do really well with a 90/10 split in either direction.

Yeah.

So I think you just have, like you said, what was working before this? So first principles, Is my board full today?

Yep.

Is my board full tomorrow? Is my board full the next day? Are we taking care of today and the current and urgent thing? If our board's not full today, tomorrow, then we got to be focusing on leads. We got to be focusing on the lead capture side of the funnel. And maybe that means 80 or 90% of your budget goes there. If you are just like, totally good to go and you're trying to figure out how to add, you know, more leads in a year from now, demand generation starts to make a lot more sense.

Yeah. It's interesting talking to you yesterday. You know, you said even at the stage of our business, the size of our business, uh, you're like, the number one job I still have is lead generation.

Yeah.

Um, now obviously you're not actively doing it, but like If that part of my business is not dialed in, is not focused on, you know, you said marketing is a contact sport and so you have to be in it.

Yeah.

If that part isn't fixed, nothing else matters. Great sales process, best techs, you know, hey, we've got great wraps on all the trucks. Well, the trucks aren't going out to jobs. It doesn't really matter. Um, and so yeah, when you're thinking of a business in that $8 to, you know, $14 million range, but even if You know, you're a smaller business and someone said, hey, I'm writing you a check for $1 million over the next year. I think specifically maybe smaller businesses that think towards that then go, oh, then I can start, then I don't have to think about my lead partners or like PPC and LSA as much 'cause I've like made it. And you're hitting, sitting here and you go, no, that's still the number one thing I'm thinking about.

Yeah. And for perspective, we spend $2.5 million.

Yeah.

So we're still— Yeah, leads. Like, leads is it. You know, it's, uh, that you— we talk about knowing your numbers, like what's your average ticket, what's your closing rate, what's your booking rate, and literally none of that matters if you don't have the leads. Like, it doesn't matter what your closing rate is on sales if there's no potential appointments to convert into sales. So the very first thing always is the lead. Nothing else can happen in the entire rest of the business without, without the lead. It's like a car without gas.

Yeah. And then even if your board is full, well then it's a question of like, okay, if I, I still want to grow, that's an opportunity to hire. But then again, now I need to fill a different board, a larger board with more leads. So it, it's interesting because I do have this conversation, have this conversation as people scale. And I do think the perspective when you're early on is, hey, when I get there, it'll look a lot different.

Yeah.

But then as people grow, they realize like it's, it's the same machine.

It's the same.

Taking the same gas.

Yeah.

Now you—

well, it's the same allocation.

Yes.

And like we'll break it out exactly, but like our allocation is a 75/25.

Between like lead capture.

Lead capture, lead generation. Branding.

Yeah.

Now it used to be as high as like 85/15.

Yeah.

And just this year we eased it up 10%, a little bit more demand creation, but Yeah. I mean, like, I'm notorious for saying, like, run that thing till it's dry. Like, we ran LSAs till it was $80,000, $90,000, $100,000 a month. And that was 85% of our budget. Like, we just ran it, we got leads, and that was it. We didn't think much about diversifying.

Yeah. And, and what's interesting too is on the demand capture side of things, there is some natural It naturally somewhat plays into the like brand awareness side as well.

Yeah.

Because you get in someone's home, you have their contact, so you can remarket.

Sell a membership.

Sell a membership. You got this, there's the sticker on the unit. Again, they're in your database. They leave you a Google review that then boosts your presence and, you know, your GBP is still, you know, still demand capture.

Yeah.

But your brand is like still growing through that. And so It naturally does somewhat play into that. And so like you said, there's a lot of different percentages or ratios that people have and work well for different people, but the vast majority of time there's still this much heavier allocation towards how am I going to fill the board and continue to fill it as I hire, as I look to scale.

Yeah.

And so yeah, like you mentioned, local service ads, pay-per-click, Um, are obviously like 2 of the obvious paid ones. Investing in your SEO, both for your Google Business Profile and for like on-page, your website. Um, that's obviously great because the more that your scales can tip towards organic, the better. Um, because then you're paying eventually less for leads, or you get to continue paying the same for leads and you just see your total lead bucket grow. Yeah.

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And I think you were saying that, you know, on average you're hoping right now, like when you're talking about day-to-day leads, it's what, 50/50 from paid and organic at this point?

Yeah. Well, it depends on the team. So, okay, like plumbing is 35% of our leads are bought.

Okay.

HVAC is like 5%. Electric's 50 or 60%. Gotcha. Drains is 40, 50.

Yeah.

So it depends on the team. Like HVAC is almost all organic. We basically don't advertise for HVAC at all. It's kind of— it seems pointless. You know, this is like going to sound ridiculous, but it seems pointless to advertise for HVAC. Like, that's the point because you're showing up and— well, that's the point of memberships. But like, if— like, if I have— if I'm advertising for HVAC, I'm either going to blow 100% of the budget in the day because it's 95 degrees or no one's looking for the service at all because it's 50.

Yeah.

So like it— yeah, it's kind of odd.

Yeah. Yeah. And I mean, and it definitely helps when you have Or an organic presence there too, because when people are searching for it, like they are finding you. It can be a little different if you feel buried or whatever beneath competitors. Yeah.

Like we market for sales leads.

Yes.

For the CAs, but for service, like we don't see any value in marketing at all.

And so yeah, you've got what you're like direct advertising, but then also like the aggregator partners you have or the lead partners you have. A lot of people, I think this is also common, A lot of people, when they start, they rely so heavily on these lead partners, the Angies, Thumbtacks, Modernize, whatever it might be. And it's speed to lead, it's like be the best and get there and win the business and it's more competitive. And so they go, gosh, I can't wait for the day that I never use them again.

Yeah.

And usually people do hit a point where, okay, finally I can do my own PPC or LSA, they're way less of a consideration.

But then it's funny, Tommy Mello talks about how he's using Angie's List.

I know.

Like, leads are leads are leads.

Exactly.

Like, this is it, and this is the game.

And it, and it becomes like, as you start to max out the channels that you like early on dreamed of— I can't wait till I get my own leads from these channels— you're like, well, crap, I need more leads. Yeah. And where can you find them? Yeah, those lead partners. And again, it's like managing the expectations there of like, how often do we win them? How often do they close? Things like that. But Um, it's, it's just always funny because, you know—

Yeah, well, I remember seeing that. I remember saying that, like, oh, we don't need this anymore. Yeah. And like, here I am twice the size as when I said that. Yeah. And I'm like, I'm using the hell out of these things.

Yeah.

Yeah.

And that, you know, we're at the workshop that, that we were just doing.

Yeah.

People were surprised to hear that. Yeah. And a lot of people who are like, I feel like I just escaped that, you know, personal hell that I felt like I was in.

Yeah.

Yeah.

Now it's, it's all— it's way different when your business is not solely providing on them.

Yeah.

And when it's like, okay, now I'm supplementing their part of the strategy. You know, maybe I turn them on and off as needed. But that like lead capture is still such a big allocation of most people's budgets. Now, again, you hear about some businesses that scale to a decent size.

Yeah.

And it's, you know, they just own a suburb, they own a neighborhood, and it's all through branding. They sponsor all the Little League teams. They've got, you know, at the high school football stadium, they've got their sign up. At the local church, like they're in the bulletin or the Whatever. It's just way harder to actually expand out with that type of allocation typically. Now, there's always people who break the mold or whatever, but for most people listening, you know, whether you're currently like at that million-dollar budget or you're aspiring to one day, I can't wait till I have a million dollars a year to spend.

I was really excited for $2 million and I was super disappointed when we got here.

Yeah.

'Cause I was like, I remember thinking, I was like, oh my God, we're gonna be doing sports teams. We're gonna be doing, and it's like, no, we're buying leads. We're just buying more. Yeah, we're buying a lot more leads.

But it makes, it makes sense. It's, it's, um, you know, dance with the girl that brought you here. Like, there comes a time where you add things that you didn't before, but still, like, the majority of growth was— has been driven through this channel.

Yeah.

And until it is proven that it does not, yeah, why would I all of a sudden make some massive change?

Yeah.

So I think it's just a good perspective setting conversation for people that are aspiring to hit that budget one day of, hey, the place I'm in right now is actually not, it's not bad. It's not inherently bad that I'm spending so much on lead generation constantly. Because as you scale, that's a way to continue to scale.

Yeah.

You can start to look at it differently. You can add different things. But again, it's so eye-opening to hear you at the spot you're going, or at the spot you're at, And you're like, yeah, as the president, as the owner of this company, like, number one thing I usually am focusing on is making sure that we get leads. Everything else takes care of itself at this point. Like, I've built the processes of whatever else.

If the board's full, the system works.

And that's—

the board's not full, the system doesn't work.

Yep, exactly.

Let's, let's break down that million. Okay, so on a million bucks, let's say like $70,000 is demand capture, $30,000 is, uh, demand generation. So we've got $700,000 to play with. To me, that's like pretty straightforward. We're going to be doing, I'd say, fundamentals. So LSA, maybe some PPC in there.

Depending on your market.

Reviews, SEO. Like to me, that's how I would imagine that demand capture. Yeah.

And then maybe again, depending on markets, supplementing with the different lead partners and whatnot in there too.

But I see, I honestly, Like, maybe I— maybe.

Yeah.

You know, we— the people that I know that are growing the fastest over the past 2 or 3 years are running 1 to 2 channels up to like $100 grand a month.

Really?

Oh, yeah. Yeah. Like, hey, if PPC works— like, I have a friend in Chicago, PPC— like, LSA stopped working for them the way it worked for us.

Yeah, great.

No problem. They ran PPC up to $90,000 a month.

Yeah.

They've since backed down a little bit and they've added a little bit of other stuff in there, but I think it's still $60,000.

Well, and that's actually, you know, the interesting conversation of like the allocation within the allocation is on the paid side of what that spend, that 70% goes to paid. What you're saying is what we see where there's still somewhat of a mix, but like the majority of that paid ad budget—

Yeah, yeah. Goes with the big winner.

Exactly. Because it wins. Like there are some markets where you know, you hear it's like PPC doesn't work here, it never works here.

Great.

Well, there's another channel.

Something else works.

But other markets where it works really well and people get it dialed in and, um, and, and that's where the majority of their budget goes. And so that's obviously industry location dependent, but the principle still looks the same. The people who are scaling beat the horse till it's dead. They find the right channel of paid ads and go for it.

Yeah.

Um, and then yeah, the obviously having, um, a healthy budget for SEO. Um, you know, again, organic leads are great. They're, they've vetted you more. They're more likely to close. They're more likely to use your service. They're less likely to shop around.

Yeah. At a million bucks, we gotta be investing in a website. We gotta be investing in GMB.

Yeah.

Like in a, in a big way. Big. Yeah. Like to me, that should be like, you know, $40,000 a year. Like it, it should be a lot. We said this a couple episodes ago, but we spend $4,000 to $8,000 a month right now on our GMBs. Like that's a lot of freaking money.

Yes.

I don't even know what we spend on SEO every month, but we get $300,000 a month of attributed sales through our website. So it matters and it works. And over the past 10 years, that number just keeps going and going and going. So yeah, worth the investment. Big demand capture. On the demand generation, so that's going to be radio, TV, billboards, some social.

Yeah. Facebook ads can kind of fit in there.

Yeah. My quick take, TV is the cheapest way to reach the largest amount of people. Still is. Really easy fact to Google. So at $20 grand a month, $25 grand a month, yeah, TV.

You can make a dent.

What's kind of fun about TV is you can find out what your competitors are paying. So TV and radio, it's public data. You can find out who the big spenders are and almost exactly what they're spending. So $25,000 a month in some markets, you might be the largest spender in that market on TV and it might not even be close. Yeah, most of our competitors are spending $6,000 to $8,000 a month on TV.

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So even if we came in at $15,000, like—

You're double.

Yeah, we'd be double, double the placement. So yeah, I mean, $20,000, $25,000 would go really far on TV. And then yeah, I don't really recommend billboards except unless it's like paired with TV or like a really big broad strategy. Radio, I think Tony said this at the workshop, but like radio is great for recruitment. We're probably gonna have to change how we think about radio because I do think that's like Totally right.

Yeah.

And then social, if you can do social really well, it's really unique, it's really creative. If you're doing something different, pop off. Like, go for it. And you can spend all $20 grand on that if you're doing something amazing. If you're posting like, hey, we can clean your furnace today.

The winter freeze is on its way.

Yeah, nobody gives a shit. I don't give a shit. And when I see that on our own socials, I'm like, all right, like, I wouldn't even click on this.

And even at that point, Usually when people are in, we talked about this yesterday, it's either invest in social just enough to keep it alive.

Yeah, keep it slightly active.

Yeah, it's like, okay, that's where it is. Like just kind of—

Or develop an in-house content studio.

Exactly.

Which that's what we did. Like that's 2 full-time people. We have a long video producer, we have a short video producer, like, but that's a big investment.

Yes.

It's a big investment.

Yeah, for sure. Another one that, I mean, at this size, you've got some sort of marketing manager, marketing team, things like that. But another thing that we see people do really well is if you have a really good strategy around Facebook groups as well, that's almost like this hybrid between Facebook ads and organic guerrilla marketing. But having most people, most businesses in a Facebook group just kind of go, hey, buy now. Like 50% off, buy now. But what we see is some people do a really good job of like telling their story. Yeah.

Yes.

Like ingraining themselves in the community that can go a long way. And so that's just another like awesome way that a lot of people aren't actually attacking the branding side as well. So, but as a whole, that million-dollar budget, like it looks really similar.

So boring. Yeah, so boring.

To what you were—

It's really similar to when it was $200,000. It's just, More.

Yep.

It's just more. Yeah. We're gonna buy more leads. We're gonna put more into our demand generation. It's just more.

Yep.

If people want to get a hold of you, how can they find you?

Yeah, we are at servicekillers.com, or you can find us on X, LinkedIn at the same, just ServiceSkillers.

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