If you haven’t done so already, this month would be a great time to sit down and plan your HVAC Marketing & Advertising Budget.
Start with Last Year’s Sales To Determine This Year’s HVAC Marketing Budget
The most common way to budget is “percent of sales,” so the first step would be to tally up sales for last year, then decide how aggressive you want to be this year. 3.5% of sales would be on the low end, a number that might maintain the business; 5% is the industry average. And if you follow Matt Michel at Service Roundtable, he’ll encourage you to raise your prices in order to allocate 20% of all sales to your HVAC advertising and marketing budget. The important thing is to pick a percentage, convert that to a Total Advertising Budget, and start laying out how you intend to spend the money. A little work on the front end can save time and money throughout the year.
Start by Dividing Your Total HVAC Budget between Retention and New Acquisition
You’ll need to divide the money between acquisition and retention efforts. The easiest sale is to someone who has done business with you in the past, yet all too often HVAC dealers ignore existing customers when planning their HVAC marketing and advertising budget. Which is extra crazy for HVAC dealers who often have a variety of products and services to CROSS-SELL. I recommend an 80/20 split, allocating 20% of your budget to take care of anyone who has done
business with you in the past, and 80% to finding new customers.
Ideas for Customer Retention in HVAC Adverting and Marketing Budgets
You’ll want to market differently to people you’ve done business with in the past, vs. the general public. Customers expect to be treated differently, and first and foremost, they want to be acknowledged as a customer. The best way to keep in touch with them all is through a quarterly customer newsletter. It’s automated, easy to budget for, and if you utilize the Changing Seasons or Comfort on the Homefront newsletters, the work and worry is done for you.
Other ways to acknowledge and appreciate your customers include giveaways and premiums, or ad specialty items when a tech is in their home. Most customers don’t want to be called on the phone or emailed information as we’ve turned into more of a “self-serve” society. Connecting on Facebook is one way to stay in touch, but only if you post regularly. Never make a special offer to “new customers” where your existing customers are left out. It makes people want to quit! Telcom is famous for that. Don’t be like Telcom companies!
Ideas for Customer Acquisition in HVAC Marketing and Advertising Budgets
After that, there is no single “right way” to allocate HVAC funds dedicated to customer acquisition. Every HVAC dealer is different, and the markets they serve are just as varied. By their very nature, most HVAC dealers are small businesses, so even if you allocate 20% of your sales to advertising, it’s hard to make a big media impact. So it’s all the more important to be strategic and selective with your choices.
My favorite strategy is to identify your best customers, then figure out how to retain them, and find more like them. Start by sorting your customer list by zip code and plotting them on a map. Which zip codes are the most profitable? If you’d like to target more affluent areas of town, just know that’s where you’ll most likely run into competitors. When I was buying broadcast media, I would get the ratings by zip code (as opposed to county), and what a difference that made in my buying decisions! There is power in planning. Plan your budget, by month, by the medium. It’s so much easier than starting every month with, “What are we going to do to drive sales?”
Here are the major HVAC Advertising and Marketing Categories:
Advertising Options Range from “Brand Awareness” to “Point of Sale”
Awareness: Mass Media, including Radio, TV, Billboards, Newspaper. They are expensive because they have a large “reach,” but great for name building if you have a very creative, memorable ad. Most HVAC manufacturers’ co-op programs feature this type of advertising, especially for radio and TV commercials, often in the form of a “donut” where your name/picture/logo is inserted in a ready-made commercial. This saves on production costs, and what you’re mostly building is the manufacturer’s brand, not your individual HVAC business.
Targeted: #1 budget category with HVAC dealers: Direct mail. The cost per unit may seem expensive, but with the right mailing list, you’ll reach 100% of your prospects, which includes your current customers as well as people you want to do business with. Very few industries can pinpoint their target market with this level of accuracy.
Point of Sale:
1) Yellow pages. Your listing comes free with your phone number. In most cases, you don’t need to buy an ad because the Internet has replaced the yellow pages.
2) Your website. I’d put my money here before I did anything else because you pay for a good website, but it costs very little to maintain. We live in a self-serve society, and you’d better be found online.
Miscellaneous: Truck signage. Like your website, a great investment. You pay once and it keeps working as long as you own the truck.
When it comes to Planning the Perfect HVAC marketing and advertising budget, a little work on the front end will save you hours of headache down the road!
If you need help launching your HVAC company newsletter to your customers, call the experts at The Newsletter Company. (800) 828-7198.