It’s no mystery that rising mortgage rates and home prices, combined with wavering supply chain issues, labor, etc., all directly affect home service businesses. And while things are beginning to turn around, one thing is sure: advertising is paramount to success.
Valpak surveyed over 200 home & garden (H&G) business owners to better understand their concerns (like rising costs 60%) and priorities (like customer retention and growth 40%), and more.
Key findings:
- Almost half of H&G businesses get the bulk of their jobs via advertising
- 69% budget between $10,000 and $75,000 for advertising per year
- Seasonality impacts most and many adjust services to stay competitive
- 9 out of 10 agree that direct mail WORKS for their business
- More than half plan to increase ad spend this year vs. last
You Are Always On My Mind
“Most of the money has come from my own pocket. But we delegate expenses at the beginning of the season, and towards the middle, we begin to see profit.”
Every year, H&G business owners carry the weight of various questions on their minds, from economic fears to labor shortages to supply chain troubles and much more. Navigating these challenges requires a good amount of experience, strategy, mutability, problem-solving, and luck. The business owners we surveyed are no different, citing rising costs (60%) and cash flow (41%) as their greatest concerns.
They’re Out There; They Just Need To Know You Are
“I do my regular social media advertising and customer response page, but on top of that, a lot of the work comes from word-of-mouth referrals.”
Last year, over $360 billion was spent on advertising from TV to iPhones to coupons in the mail, and that number will only get larger. Translation: businesses need to advertise because, if you’re not, someone else definitely is, and they’re selling products and services that most likely match yours. Thus, how will potential consumers in your area or across the nation know if you don’t get your message out there and in front of their faces? When we asked H&G business owners how they get the lion’s share of their business, while referrals and word-of-mouth hold significance, 49% said good old-fashioned advertising brought in the most jobs.
To Keep, Add Or Change The Channel?
“In the home services category, effective marketing hinges on emphasizing reliability, quality, and personalized solutions. Craft a compelling narrative that resonates with homeowners’ needs, showcasing tangible results and customer testimonials. Leverage digital platforms for targeted advertising, utilizing SEO to enhance online visibility. Utilize eye-catching visuals and clear, concise messaging to convey expertise and trustworthiness.”
Properly tracking and tweaking advertising channels to your company’s benefit is like finding the perfect ingredients and mixing them to create the best dish for your business. From digital to direct mail, which channels are most popular from the perspective of current business owners? Social media (72%) takes the top spot of channels H&G advertisers currently use, with email (52%) coming in second, and direct mail at the #3 spot (48%).
The argument for direct mail is strong and getting stronger, as 9 out of 10 home and garden businesses use or have considered using direct mail advertising. Maybe for its tactile versatility, where receiving something in your mailbox, holding it in your hand, and then putting it in a pocket or merely up on the fridge as a reminder. Or, an easier, more accessible selection when a homeowner needs improvement, landscaping, window replacement, etc., and they got an offer right in their palm! According to AudienceSCAN®, 72% of U.S. adults keep and read the ads they get in their mailboxes.
When we asked H&G direct mail advertisers how many years they had used direct mail as part of their business marketing mix, 74% said 3-10+ years. Even more, a whopping 88% agree that direct mail advertising has worked for their business. Here lies the next question: Why? Or what do you like about advertising with direct mail? The top 3 answers were response (55%), price (54%), and return on investment (ROI) (39%).
Budge That Budget
Similar to our recent local advertising survey, despite rising cost concerns, most respondents listed healthy advertising budgets. 77% have an annual ad budget of $10,000 or more, with 53% budgeting $25,000 or more for advertising. 54% of these owners also plan to increase their ad spend this year, with 37% planning to maintain current spend.
The big how, is how home and garden businesses plan to spend money on advertising. 25% plan to spread it out throughout the year, while 21% take a more cautious approach and move money around based on performance.
Make It A Season They Remember
Home and garden business owners credit April through September as their peak season, with June (66%) and July (63%) being the top 2 busiest months. While also recognizing the beginning of the year, January (68%) and February and the end of the year October, November and December (59%) are their slowest periods. But this doesn’t mean there aren’t opportunities to take advantage of all year.
Slow seasons happen for many businesses. However, during these times, it’s still essential to advertise. Seasons change, but your ads will continue to resonate with customers as things pick up again. For example, a landscape or lawn care company can install holiday lights, clean gutters, pressure wash windows, etc. Similarly, for summer, a snow removal business could use its service trucks to move equipment and gravel around or help with other road maintenance. One must realize how vital ingenuity in advertising is to success—always thinking, brainstorming with staff, and finding new ideas to get the word out about your business. When we asked our respondents if they offer different services by season, 68% said yes. Here’s why:
“Because I live in an area that is hot in the summer and has lots of snow in the winter. So we offer general construction and then snow removal in the winter.”
“Due to the colder months, we offer different price deals for customers so they can get products months in advance.”
“I have more time to focus on specific winter-related projects in the off-season, which helps our business to take advantage of more services. It’s a way to specialize and make the most of the off-season.”
“When my sales are not very good, I have to continue my business. Because of that reason and to earn some extra money, I offer different services by seasons.”
Reaching The Right Audience
Before you launch an advertising campaign, there are two fundamental questions to ask: who should it go to (reach), and how many times (frequency)? There’s a delicate balance between reach and frequency depending on your industry and what you sell. For example, everyone loves pizza. A pizza restaurant can mail every household in a neighborhood without targeting by income or other demographics and get great results. 63% of our respondents take this “spray-and-pray” approach, while 36% target specific audiences or households. Valpak data shows that roofers and other high ticket, low frequency businesses see more success in targeting by home value, age of home, and purchase power to reach the audiences that have the highest probability of buying what they sell.
According to the Rule of 7, consumers will interact with a business 7 times before making a purchase. 6 out of 10 business owners we surveyed took this rule to heart, advertising at least monthly to the same audience. Messaging is just as important as frequency. Incentives like coupons give consumers a reason to try or switch to your business. 81% of consumers are motivated to try a new business upon receiving a coupon and 17% “usually” make buying decisions based on which coupons they have. But only 76% of businesses use coupons in their advertising. This is an opportunity for businesses to shine.
Put An Offer On It
The good news is that 8 out of 10 of our H&G business owners put offers on their ads. According to our recent Ad Design Survey, 88% of consumers prefer ads with offers. 72% of U.S. adults also agree that saving as much money as possible is their #1 shopping priority, and 50% would gladly switch brands if offered a coupon (MRI-Simmons data).
Now, if we drill down further and examine which types of offers drive the best response for our respondents’ businesses, 26% say a free estimate, with 18% crediting a percent-off service and 12% a dollars-off service (12%). Another way to boost those seasonal challenges is to offer seasonal discounts. Getting consumers to notice your business during peak times can be as crucial as getting them to in the off-season.
Tracking Performance
Advertising is an investment in your company’s future as it exists to generate business, which means more customers and more profits. Measuring the effectiveness of your advertising campaign can help your company better understand the strength of your reach and where and what needs to be tweaked, increased, or decreased. While sales / transactions are the clear winner at 40%, Google Analytics, a vital tool for collecting and analyzing user data, is close behind at 35% for tracking/measuring advertising success—as well as chosen by our respondents (61%) as the most trustworthy advertising brand.
Metrics are a barometer of how your advertising efforts are doing. Follow the data to steer your campaigns in the right direction with a little bit of science and a little ad magic. Most business owners measure success from new customers coming in and more sales, with only 2% not measuring key performance indicators (KPIs) at all.
As we say above, advertising is an investment in your business and will boost brand awareness, jobs, profits, and more if done strategically, i.e., with the help of tools and a trustworthy / knowledgeable ad partner.
Trust is the keyword here. Much time and money goes into advertising and finding the right fit for your company, so a business must choose the brand / channel for its products and services.
While the survey was blind (sent/managed by PureSpectrum), H&G business owners still ranked Valpak as the most trustworthy direct mail brand:
Money, Money, Money
There is money to be spent on advertising by H&G businesses as 73% of owners we surveyed listed an annual revenue of $250,000 or more and 35% at $1 million or more! As advertisers and business owners, we are all seeking success, staying, + growing power. This survey data comes directly from the source—the home services businesses that are on the precipice of American commerce. From maid services to window installers to landscapers to remodelers and more, there is a guide / story in the data for everyone to glean and extrapolate value when building their next marketing campaign. Are you spending enough on your advertising efforts and running long enough to make a real impact with your target audience? Are you using the channels your audience prefers and looks to when searching for your type of service? Are you incentivizing sales and rewarding loyalty to returning customers? Knowing how to read the writing on the wall is just as important as the writing itself when driving your company to the next level and beyond. Proven advertising solutions, data-driven insights and a local marketing expert who lives and works in your neighborhood—there’s every reason to partner with Valpak on marketing!
