November is when most contractors plan next year. The marketing budget is usually the line that gets the least thought, and it decides how many good jobs you will have to choose from in 2027.
In this article
The common rule of thumb
Home service and remodeling companies usually spend between 3% and 10% of gross revenue on marketing. Companies living mostly on referrals sit at the low end. Companies that want to grow, enter a new town or add a new service sit at the high end, sometimes 12% for a year. A percentage is a starting point, not a plan.
Work backward from the jobs you need
Start with the 2027 revenue goal and your average job size. Example: a goal of $1.5 million with an average job of $12,000 means 125 jobs. If you close 1 out of 3 estimates, you need 375 estimates. If 1 out of 2 leads books an estimate, you need 750 leads, about 63 a month. Now you know what the marketing has to deliver.
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Know your cost per booked job
Cost per lead alone is misleading. A $40 lead that never answers is more expensive than a $150 lead that books. Track cost per booked estimate and cost per sold job by channel. If a sold job costs $600 in marketing and leaves $3,500 in gross profit, that channel deserves more money.
Split the budget by channel
A practical split for many contractors:
- Google Business Profile, reviews and website: always on, low cost, highest trust.
- Google Local Services Ads and search ads: people ready to hire now.
- Facebook and Instagram ads: projects people are planning, before-and-after content.
- Referrals and past customers: email, text and a simple referral reward.
- Content and video from real jobs: feeds every channel above.
Keep 10% to 15% to test one new channel per quarter.
Plan for seasonality
Do not split the budget evenly across 12 months. Spend more 4 to 8 weeks before your busy season and keep a smaller, steady budget in the slow months to book work early. For outdoor trades, that means planning winter campaigns that sell spring projects.
Budget for answering the leads
Marketing money is wasted if calls go to voicemail. Include in the budget the person, answering service or AI receptionist that responds in minutes, and a CRM to follow up every estimate.
A quick example
A roofing company doing $2 million spent about 4% on marketing, mostly on shared leads. For 2027 it moved to 7%, cut shared leads, added Local Services Ads and Facebook ads with real project videos, and hired a part-time coordinator to call leads back within 10 minutes. Its cost per sold job dropped by a third in the first quarter.
Track it monthly
Each month, look at leads, booked estimates, sold jobs and revenue per channel. Move money from what does not sell to what does. Budget planning is a monthly habit, not a one-time spreadsheet.
Common mistakes
Picking a number without a revenue goal, judging channels by cost per lead only, spending nothing in the slow season, buying leads nobody calls back fast and never checking which channel brought the jobs that actually paid.
Turn your work into your best advertising.
We help home service contractors turn real projects, videos and events into a steady flow of local leads and booked estimates.
Frequently asked questions
Is 10% of revenue too much for a small contractor to spend on marketing?
Not if you are trying to grow and the money is tracked. Established companies with lots of referrals often spend 3% to 6%. Companies that want to grow fast, or are new in a market, commonly spend 8% to 12% for a year or two. The real test is cost per booked job against profit per job.