It’s a phrase as old as time—or at least as old as commerce itself: “You have to spend money to make money.” This timeless adage is especially true in the world of restoration marketing, where the right investment can dramatically transform the trajectory of your business. However, it’s something that I’ve witnessed countless business managers and owners struggle with. Asking questions such as “How much should I spend on marketing?” “What’s the expected return on my marketing efforts?” and “How will we know if it’s working?” Therefore, my goal in this article is to address these questions practically.

Understanding Marketing Investment 

First, let’s dive in by addressing the elephant in the room: I’d be willing to bet that every single person reading this article would say that they’ve been burned by their marketing spend before—at one point or another. While I don’t doubt that to be true, I think it’s important to begin by shifting our perspective on marketing spend for the duration of this article (and hopefully well into the future).  

Instead of looking at marketing by the sheer cost that you’re shelling out, we have to look at it for the potential of what that investment could bring to your business. You see, marketing isn’t just an expenditure in your business; it’s an investment. And like any good investment, the goal is to yield more in return than you put in. 

Assuming that you’ll get a good return without investing anything into something would be akin to entering a marathon without training and expecting to come in first place. Investment in your preparation and foundation is essential for success.

So let’s start by shifting our perspective and then asking the question everyone wants to know the answer to: “How much should a restoration business invest into marketing to maximize its potential return?”

The U.S. Small Business Association suggests that businesses should spend between 7% and 8% of their gross revenue on marketing if they’re aiming to maintain their current position and visibility in the market. However, if you’re looking to grow and expand, that number should be closer to 10% to 12% of your revenue.  

Additionally, the restoration industry is unique as it’s highly competitive and heavily dependent on quick response and reputation. Therefore, I usually recommend that businesses start by investing 10% of their current gross revenue into marketing efforts.

Calculating Your Marketing Budget 

Let’s break this down a little further, and consider your business’s annual gross revenue. For the sake of easy numbers, let’s say your goal is to bring in $1M this year. A 10% investment in marketing translates to a $100,000 annual marketing budget. By the way, it’s important to note that this budget should encompass all aspects of marketing—from digital campaigns and social media to boots-on-the-ground efforts and public relations. 

Why do I (and plenty of other industry experts) suggest such a significant investment in your marketing? It’s simple. In restoration, relationships and visibility are vital to your success. After all, the first company that comes to mind during a crisis is often the one that gets the call. Effective and ongoing (not one-and-done) marketing strategies help ensure that your brand is front of mind when a disaster strikes and when potential clients need restoration services.

ROI: What Should You Expect? 

Investing in marketing is one thing, but understanding the return on that investment (ROI) is another. What should you be getting back for every dollar you spend? 

Many businesses tell me they know the ROI on their business. However, when it comes down to it, they can’t tell me exactly which jobs came from their marketing efforts; let alone what the return on that specific job was. And that’s where this becomes key—it’s not just understanding your marketing spend as an investment but also understanding the result of that investment. 

This can be challenging to quantify precisely, but a well-structured marketing strategy should bring a noticeable increase in leads and conversions. Beyond that, a well-structured marketing partner should be able to identify the exact return on those leads as well as the initial source of them. 

Okay, let’s do a little more math:  

If your increased marketing budget (10% of your gross revenue) results in a 20% increase in jobs, where each job is an average of $10k, an additional 10 jobs per year would equate to $100,000—effectively paying for the marketing itself PLUS bringing 10 new customers to your door. Any growth beyond this is simply profit gained from your marketing efforts. 

What’s not to love about this? You spent some money and you made some money.

The Sum of It All 

Recently, I was chatting with a new friend about growing restoration companies and asked him what words of advice he’d give to those in this industry. Rather than words of wisdom, he asked a question of wisdom. He simply said, “Does it matter?” He explained how restoration business owners sometimes get so hung up on the initial investment versus viewing them as an opportunity to learn and increase their market share. He even used the example, “So you lost $5,000 on a Google ads campaign. So what! Does it matter?” By asking this question, he was essentially saying the following: Did you get some leads? Probably. Did you get as many as hoped? Maybe not. Did you get your name out there and invest in the future of your business? Yes! Was every dollar that went towards that campaign working towards growing your business both now and down the road? Yes. 

If so, then does that $5,000 really matter relative to the long-term goals of our business? No! 

My friend’s question struck me because, at the core of our understanding of marketing, we all know that it matters. However, we become stuck on the return of the investment rather than the long-term strategy behind the investment. 

Good marketing produces long-term profitable outcomes after the investment. Not just one-time quick jobs to boost our performance here and now. 

So let’s go back to the adage that I started this article with: 'You have to spend money to make money'. This statement holds particularly true in the restoration industry when it comes to marketing. While the upfront costs might seem significant, the long-term benefits—increased visibility, enhanced lead generation, and expanded market share—reaffirm that these expenditures are not just costs but crucial investments in your business's future. A strategic approach to marketing spend not only offers some quick wins, but also sustained growth and success for your business.