The REMODELING Benchmark for marketing expenditures is 3% of annual revenues, less for large companies, more for specialty remodelers. But for a small or mid-sized firm, what's the process for setting the marketing budget?
Theresa Same, controller at the $2.5 million-a-year Small Carpenters at Large in Atlanta, says, "We look at our overall goals for the year." In December, owner Danny Feig-Sandoval reviews the year and examines trends. If sales haven't increased, the marketing budget goes up. The company also examines neighborhoods where new jobs are.
The firm's marketing budget, which ranges from 1% to 3% of revenues, includes signs, clothing, brochures, a presentation kit, door hangers, Web site maintenance, project photography, awards entries, and festival or tour-of-homes sponsorships.
Same says setting the marketing budget is as much intuitive as it is an assessment of future costs, taking into account such things as a down economy. "The year we revamped the whole marketing package started with Danny wanting new signs. Once we started that, we decided we wanted to maintain the new look."
The firm also considers other needs. "If we need to spend money somewhere else, and marketing doesn't need money put toward it, we put it somewhere else," Same says. "Because we're design/build, we know what the construction schedule looks like about eight months down the road."