LETHAL Advertising Mistakes in Home Services

I started a lawn care business. It's now franchised and will do over $75 million in annual revenue this year. And I wanted to share with you the common mistakes that I see home service business owners making when it comes to advertising and marketing. I've seen these mistakes cost people millions of dollars. I've made some of these mistakes. And if I was to do it all again and I was trying to advertise and market and grow my business in home services, these are the things that I would be doing. So I wrote down 7 things on this little piece of paper. And I want to share them with you. So hopefully you can take that money instead of wasting on Facebook ads or Google ads or postcards or yard signs and spend that money on providing for your family, getting ahead and reaching your goals. So the very first marketing mistake, advertising mistake that I see people do in home services is attribution. Now, attribution is extremely hard, meaning I need to know where my leads are coming from. When someone fills out a contact form on my website, ideally I'd like to know if they came from a referral. Did they come from a Facebook ad? Did they come from a Google ad? Did they come from a yard sign? I would like to know that. It's very, very hard. And even big businesses that do $10, $15, $20 million in annual revenue still struggle with attribution. The reason for that is because a lot of times it's easy to track the last point of attribution. Meaning they've seen your trucks 20 times in their neighborhood, but then they saw the yard sign and they gave you a call. Now, was it the yard sign that actually made them call, or was the fact that they've seen you mow their neighbor's lawn 20 times and the yard sign just activated them? Same thing with Facebook, and even same thing with Google, because if you run a Google ad, someone saw your truck 20 times, they go onto Google and search your name, and the first ad that pops up is your, your Google ad? Were they going to click on it anyways? And was actually because of the trucks they were seeing, or the uniformed employees next door? Or was it because of the Google ad? And so attribution is very, very difficult. But if you have no attribution, and you just get leads sporadically, you spend money on ads, you don't really know if there's results because you're not tracking with QR codes on door hangers. You're not tracking when someone calls in asking where they heard about you. Or did they— did someone refer them to you? Knowing these things allow you to be able to determine where to spend your marketing dollars. Because in the perfect world— yes, it's hot out here and I'm sweating like crazy, so deal with it. But in the perfect world, we'd all have private equity money or investors behind us spending gobs of money on ads and just spend it across all over the place and not really needing to know exactly whether or not we have a return on investment. For the vast majority of us as small business owners, we don't have investors. We don't have tons of money behind us. And we need to make sure that every dollar we spend is going in the right channel. So if Facebook ads is working, I need to know that so I can spend more money on it. Whereas if print marketing is not working, I need to know that so I stop spending money on it. So if you are answering the phone, if you have a phone service that is picking up the phone, I need to ask every single time, where did you hear about us? And at least know the last point of attribution. And a lot of times, because attribution is so hard, people just throw up their hands and give up. Like, I'm not even gonna care about it. Like, it's not accurate. Like, I want to know directionally correct. Because if 50% of people are saying, yeah, I saw— I see you all the time on Facebook ads, I need to know that. If everyone is mentioning my yard signs, I need to know that. And if I'm just taking the lead from my contact form, or I'm just getting the lead from my office, and they're just setting up an estimate, but I don't actually know where that lead came from, at least the last point of attribution, that is a failing formula by not tracking where your leads are coming from. So number one, if you're not tracking where leads are coming from, and you can't attribute where the leads, which channel, whether it be Facebook ads, Google ads, print, yard signs, your trucks, referrals, I've got to know exactly where leads are coming from. And the number one place to start here is inside of of your CRM, when someone is getting set up as a customer, there should be a dropdown. And if there's not one, just make a custom field of where did you hear about us? And that way, every single time you answer the phone, every single time you're getting a form, I need to know where that lead came from. And they might be confused and they might just say, I see your trucks, when in reality they've seen your door hanger yesterday. That's fine. I just need to know that at least you're attributing where leads are coming from. That's the biggest mistake that I see Overall? 'Cause if you don't know that, you're literally wildly just guessing. Like it's a wild ankle guess of where you should spend your next marketing dollar. And we have to be efficient with our marketing dollars. All right, number 2, biggest advertising mistake I see is not knowing your customer acquisition cost or your lifetime value. You'll hear this referred to as CAC, customer acquisition cost, and LTV, lifetime value. The reason you got to know this is because this is the input and output equation. Meaning, if I spend a certain amount of money, that's my customer acquisition cost, to get one new customer, how much money will I make from that customer over the course of their lifetime? For example, if I make $2,000 in revenue per year per customer and I keep customers on average for 5 years, I would make $10,000 in revenue. Let's assume I'm 20% profitable. That would mean that I made $2,000 of profit on that customer over the course of the 5 years that they stayed with me. Now, if I spent $100 to get that customer and in exchange, over the course of the next few years, I'm turning that customer into $2,000 of profit, that's a great return on investment. But if I don't know my input, my customer acquisition cost, and I don't know my output, My lifetime value. Again, I'm just guessing. And I would say 95% to 99% of home service businesses, depending on the industry, are just guessing with their marketing dollars because they don't know their customer acquisition cost. How much money do I put into the machine to get one new customer? And they don't know their lifetime value. How much money does every single customer net me over the course of their lifetime? And in order to know that, especially if you have recurring revenue, You can't just use the average ticket. If you have a one-time service, for example, garage installation, garage door installations, or even parts of HVAC or plumbing, electrical, like someone's installing their electrical, usually one time. So you can look at the average ticket. But if you have a recurring service where you're coming on a weekly, biweekly, monthly, quarterly, annual basis, I wanna know how long do they stay with me? So to determine my lifetime value, I sort of need to know how long do they usually stay with me? How many times do they usually buy from me? Even something like Christmas lights that might be more of an annual thing. If on average customers spend $1,000 per light install, but on average they stay with you 3 years, you can then assume you're making $3,000 of revenue. And if you're 50% profitable on that service, that would mean $1,500 is your profit. So if I have to spend $100 to get the customer, customer acquisition cost, and at the end of the day, 3 years later, I am making $1,500, I can now at least make an assessment as to whether or not that is a good enough ROI for me to keep spending money on marketing. If I don't know those numbers, I am guessing. And here's the thing, I'm going to tell you all these. At the end of the day, almost every big business you know in home services, if you ask them when they first started marketing, a lot of them didn't know these things. And they spent years trying to figure out— I'm trying to save you that learning curve. But the reason I say this is because if you feel bad as I go through these, you're like, I don't really do attribution. I don't really know my customer acquisition cost. I really don't know my lifetime value. Don't feel bad. Everyone had to start from somewhere. And a lot of the biggest businesses today simply applied marketing as something that was a non-negotiable, meaning even if they didn't know their attribution, even if they didn't know their customer acquisition cost and their lifetime value, they just kept spending money on advertising. And in the long run, they ended up hiring someone. They end up getting an agency or consultant, someone to help them figure these things out. But if you— I do not want to make this video where you go stop spending money on marketing simply because you don't know all the numbers of your business or the things I'm mentioning. Because for a lot of home service businesses, the biggest ones, when they first got started, they didn't know any of these things. They just knew that if they would spend money on marketing and put money back into their business, they would get more customers and they would continue to grow. Number 3. Biggest advertising mistakes I see in home services is they have the shiny object syndrome instead of refining and making their current ad strategy better with more reps. So at Augusta, Augusta Lawn Care, we have a department called Augusta Leads that runs Facebook ads and Google ads for our owners. And every single week we are tweaking tiny little things inside of our ads to make them just a little bit better. But over the course of the last 6 months, we've been able to dramatically increase more than 100% on Facebook ads and 80% increase the conversion of our ads on Google just by constantly optimizing the ad. So for example, on Facebook, we realized that using local landmarks improved the conversion. We realized that having the local owner in the video doing a selfie video increased the conversion. We realized that having a flag of the country that we are running ads for, whether it be US, Canada, or Australia, having that in the background dramatically increased the click-through rate. These are all little improvements, but over the course of time, they stack up. But we would never be able to learn all of those things and make all those refinements and get the ads to perform the way they do if we jump from one platform to the next. Like Facebook ads, then we'll do some Google, then we'll do some yard signs, then we'll do some door hangers, then we'll go ahead and run some radio ads because, well, I don't know why you'd run radio ads, but you just jump from thing to thing. And the same way that many entrepreneurs, we have the shiny object syndrome when it comes to new services, new industries, new businesses, new websites, new LLCs, we love the new and shiny thing. The same thing is true when it comes to marketing and advertising. In the last 10 minutes of you watching this video, you've already had another marketing idea of something you should add to the business, something new. You're like, oh man, they said that Facebook ads, the flag thing, oh my goodness, I've gotta do, you know, camera to my face on my ads. You've already thought all these new things, ways of doing things, when you've never even done Facebook ads one time. And constantly jumping from channel to channel, listening to a podcast or a book, and they might really be working for whoever they're talking to, Whoever's talking in that podcast or in that video, in that book that you're watching, that video, but they've been doing it for 10 years and they've been optimizing and making it better. And so then you go do it and you're like, oh, it didn't work for me. Did it not work for you or did you just not have 10 years of refining and doing more reps and tweaking it and adjusting it and modifying it every single year and knowing the seasonality of that ad platform to know when to market, what to market, what to show in the ad, what keywords to use, which negative keywords. There's so many little details. And so I believe that the best marketers in home services are the ones that figure out their customer acquisition cost and their lifetime value for one channel, and they just constantly keep tweaking it. So right now, something is working decently for you. And if you say, well, I'm getting all my customers from this channel, why go figure out another channel? Just take that channel and refine it. Not for a year, not for 2 years, 3 years, 4 years. Why? Because in home services, you have seasonality. And so you will have to take certain bets of what's going to work during a spring rush or going into your busy season and then see how they play out. You'll have to take the different modifications or edits of an ad or how you put the QR code on the door hanger or whether or not you do postcards or flyers. You have to modify things and it'll take a whole year sometimes to get really good feedback and then test again the next year when the season's the same. Because you can't just run an ad this month, compare it to next month, and then compare the difference. Because if this month, month 2, it has way more demand for your services because you're going into a spring rush, it might give you a false positive. And you might think that this ad is performing better when in reality, you just ran it 5 or 6 weeks later when demand for that service naturally because of the weather, because it was spring rush, because of tax season, it was just way better during that time of year. And so be very careful about trying different marketing channels back to back to back to back, and then comparing results. Because seasonality alone will dramatically skew the results. And so I have found the best marketers take one channel, figure out their customer acquisition cost and their lifetime value, and then just constantly make it better. And they just are constantly tracking, can I bring my customer acquisition cost down? Can I get a better quality customer and improve the lifetime value? Because If you get a better customer, they might cost more on the customer acquisition cost side, but if they produce 3 to 4 times more revenue for you 'cause they accept all your upsells, they accept every single job, every type of service that you offer, full service, let's go, they prepaid the whole thing, those customers, I want more of them. And so over the course of time, I can tweak my ads to refine and bring down my customer acquisition cost and bring up my lifetime value. But most people will just hop from one marketing channel to the next based upon a podcast or a video or a book that they read, and they'll never actually become elite at that channel. And it's not that the channel doesn't work, it's that you haven't put in the reps to actually get good at the marketing channel. 4th big advertising mistake is people use the spray and pray strategy versus testing and iterating one at a time. So I've already alluded to this, but not only is it a matter of going deep with one channel, It's a matter of making sure that you do one channel at a time. Meaning, if you're going to go out and spend a bunch of money on ads, I don't recommend spending gobs of money on 5 different strategies that are hard to attribute where the lead is coming from. So for example, if I run a billboard, I run a radio ad, I run a whole every door direct mail campaign. So postcards in people's mailboxes. And I'm also running Facebook ads, it's gonna be very hard for me to attribute the lead. So back to number one, attribution. That becomes very difficult if I have a whole bunch of campaigns running at the exact same time. And so I would recommend timing your campaigns, especially if it's things that are not— you're not able to track like digitally. If you're doing every door direct mail, if you're doing door hangers, if you're doing door-to-door sales, if you're doing billboards, anything that is not going to be where I can track the click to the close from an ad on digital, I wanna run one campaign at a time. Otherwise, I don't know what works. Or people will mention the most visible thing when in reality what's getting their attention is something completely different. And so what I see sometimes people do is they will test several things and they're like, well, I don't really know a clear winner, so I'll just do all of them. And they dump a bunch of money into it. And at the end of that result, at the end of that test, they don't know which one actually worked. Because attribution is hard, we've already talked about that. It's really hard when you just spent a bunch of money on 5 different marketing channels at the same time, and you got a bunch of leads, and you have a general customer acquisition cost across all 5 campaigns, but you don't know really which one is working. And so I would recommend, again, this is a slower approach, but the way to really know your numbers is if I'm gonna run an every door direct mail campaign, I'm gonna turn off other ad platforms during that time. So I know, I can tell just by my number of total leads whether or not a campaign is working. Because if I turn off all my digital ads, and then I run an every door direct mail campaign and leads drop off a cliff, I can with certainty say every door direct mail is not working. And assuming that when I turn the ads back on on my other platforms, all my leads come back, Even though it's tough to attribute, even though I understand that it's difficult to do, I can with pretty good certainty know that every door direct mail was not carrying the weight of my lead inflow. On the flip side, I will see some people turn off their Facebook ads or turn off specifically their Google ads, because a lot of times people go to Google, they search, and they're just clicking on your name, your ad, and Google gets the credit when in reality they're going to find you anyways, especially if you have decent SEO. search engine optimization. And all of a sudden people turn off their ads and 80-90% of the leads still keep coming in. And we were giving all the credit to the last-click attribution on a Facebook ad or Google ad when in reality, they were going to come to you anyways. And so at the end of the day, the spray and pray approach, which is like, try everything, just spend lots of money. Okay, can I take that money? Let's take 30% of it and spend on one channel for the next 6 weeks. Then we can track what happened during the month of April when I spent money on Facebook ads. Here's my customer acquisition cost for Facebook. Okay, the next 6 weeks I run Google Ads, and I do the exact same thing. So I can actually accurately know, and this is really shortcutting attribution. At the end of the day, if I could perfectly know where every lead came from, I could run multiple campaigns. But it's very difficult to get accurate attribution. And so I would rather instead of a spray and pray approach, I would have a very diligent plan of how much I was going to spend. If I'm, if I'm testing and how long I'm going to spend on it, I'm going to document what time of year that was. Because remember, that same ad campaign 6 weeks later could work really well if the climate changes, if the economy changes, whatever time of the year. A lot of our home services are dictated by the season— spring, summer, fall, winter, etc. And so instead of the spray and pray, when you are testing, I'm going to diligently take a segment of time, focus on one channel. And if all of a sudden your leads doubled or tripled and you're focusing on one ad channel and then you switch to another one and they drop off a cliff, you don't even need great attribution to know which one's working. And again, I'm talking about the testing phase when you don't know what works yet. You don't know your customer acquisition cost yet. You don't know your lifetime value yet. The easiest way to get those numbers is to isolate the channel that you're using on ads. The 5th mistake I see in advertising is when you say, I'm gonna do it all myself. Now, there are people that all day long they think about Facebook ads, all day long they think about print ads, all day long they think about Google ads. And so to think that you as a landscaper, a fence installer, a roofer, a flooring specialist is going to somehow outperform them is ludicrous. Now finding one that you can trust is sometimes the hard part. But if you can find someone that you trust, that all day long they nerd out about negative keywords on Google, they nerd out about whether or not you are targeting males or females on Facebook, they're in the weeds of every single part of the platform. There's just no way you're going to outperform them. And you're like, I'm gonna learn Facebook ads. Okay, so like why? Like you're not, you install flooring. Unless you're going to use that skill to start a marketing agency, why would you just not use someone that's a professional? And people will beat their head up against the wall all weekend long in the evenings and the week, like, oh, Facebook ads don't work. No, you have no idea what you're doing and you're enabling all these AI features inside the platform that are spending gobs of money in places that you don't even service for services you don't even offer, for customers you don't wanna serve. And then you say it's trash leads. In reality, you just don't know what you're doing. And there's no shame on you. The advertising agency guy could never install his flooring the way you do or mow the lawn the way you do, 'cause he's not a specialist at your service. And so the same way that you, if someone, your competitor called you up or one of your customers is like, hey, I want you to mow my grass, but I also need you to be my plumber. You're like, whoa, whoa, whoa. Like, those are totally separate. The same thing is true when it comes to running ads, whether it be digital or print. There are professionals out there that that's all they focus on. And to think that I'm going to mow grass like a professional, do landscaping, I'm going to install concrete, whatever it might be, but I'm also going to be able to know marketing at like the top 1 or 2% in the industry is ludicrous. It's crazy. So hire a professional. Now, here's the caveat. If you have a really low marketing spend, I would not hire a professional that's going to cost you $1,000 a month or $500 a month if your ad spend is like $200 a month. All right. It's not worth it. You could literally just go know that you're not going to— you're not going to do great on the customer acquisition cost. But if you're spending $200 on ads and the, the management fee is $1,000, they would have to literally 5x the amount of leads for your same dollar spent on the Google ad, for example. So, in my opinion, don't spend over 30% of your ad budget on management. Meaning, if someone wants $500 to manage your ads, I need to make sure that you're spending about $1,200 or more per month on the actual ad spend. I don't want to be spending more than 30% of what I'm spending on the ads for someone else to manage the campaign. Meaning, once you start spending a good chunk of money, $1,000, $2,000 a month, I'm looking for a professional that I can pay $300, $500, $1,000 a month to manage it all for me. And if I can— again, I'm going to trust but verify. I need to know reports. I want to see at least a monthly report of what's going on in my account. If they're not willing to give that to me, I can't trust them. And who knows what? But like this whole notion that you need to learn how to do the ads is crazy. You need to keep doing what you do best, which is your service, finding more team members, training them better, creating systems and procedures inside your business to make your operations smoother. Figuring out how to be the best Facebook market— Facebook marketer or Google Ads professional is not your core service. And so go ahead. If you have a million-dollar business, spend $1,000 a month, which is 1.2% of your revenue, to go find someone that actually knows what they're doing in your ads platform. It took me so long to do this. I thought it was gonna be like the— because like when I first started Augusta Lawn Care, I built it off the back of Facebook ads. It was super cheap. It was just like a gold mine. I wasn't even good at running ads, but I was good enough because there were so few people running ads on Facebook. But now it's pretty like congested. There's a lot of advertisers out there. There's a lot of big companies spending a lot of money on digital. And if I go on there, and I spend maybe an hour or 2 a week running ads, do I really think I can compete with the person that's running 40, 50 hours a week just looking at different ad sets, looking at different campaigns, seeing what works in different service areas? You're not. So be humble enough to realize that the same way you consider yourself a professional in your service, go find a professional that will do this for you so you can take that 5 or 6 hours a week and just— if you just spent that time doing the work, If you're getting paid $100 an hour to do your service, and you're spending 5 hours per week running your Facebook ads or your Google ads, or trying to figure out some campaign tracking thing, that's $500 that you could just— could have just gone and produced in revenue out doing the service out in the field, let alone being the leader, doing sales, doing higher leverage activities, just doing the work $100 an hour. That's $2,000 a month if you just did the work, let alone create SOPs, hired people, had a better team meeting, focused on making sure your team culture was where it's at. Those are even higher leverage tasks, but just doing the work, you'd make $2,000 per month instead of just focusing on these minutiae of tweaking ads, refining keywords, making sure the tracking is set up correctly, setting up your Facebook pixel. Let someone else do it. Number 6. Big mistake when it comes to advertising is all paid, no organic. I think this is going to become more and more prevalent in home services, and that is the owner that is able to talk to the camera, communicate effectively, and post organic content is going to win online. And the vast majority of your leads are coming from online. Like, oh no, they had a referral. They still went to your website to check you out. They still went to your website to check out your reviews. And so your website is super important. That being said, they're also looking you at on Facebook, on Instagram, on YouTube. And so I want people to trust me. The number one thing that you can do in a local business is garner trust with other local neighbors so that they trust you for that home service, whatever you are offering. And so that when they think about a landscaping job at their house, they think of you because they've seen you in your, in in their feed. And so you can talk about the different events that are happening in your local area. You can talk about fundraisers, or local news, or things that are happening in a, you know, if it's adjacent to your service, cool. If it's really, really hot outside, you can talk about how in your local area there's a drought and what they can do to save money when it comes to watering their grass, for example. And not in a salesy way, just in a complete educational way. I will say education doesn't do as good Compared to simply commenting on local news, you want to become, as Gary Vaynerchuk used to say, the mayor of your local city. Meaning whenever something happens in your local area, just comment on it. Being like there's a reason why I wear this yellow shirt or an orange shirt every single video. Tom Works or Augusta. Why? This is my brand. This is my business, and I'm proud of it. And so even if you're talking about something that has nothing to do with your service, if it's in your local area. It should be of interest to your customers. And so I make these videos sometimes having nothing to do with software with HomeWorks or franchising with Augusta, but I'm talking about a topic that all of you care about, especially if you watch 25 minutes of this, you care enough about this topic. The same thing is true in your local area. Just because you're not commenting about lawn care or about fencing or about roofing, if you're talking about something that's happening in their local area, it's meaningful to every homeowner. And every resident of your local area. So talk about the local news. Talk.