How to Find the Most Effective Advertising for Local Service Companies

Clients often ask me, what is the most effective advertising strategy for their business. Since there are many variables to consider there isn’t one clear answer that would satisfy the needs of every business. However, there is a logical way to approach this question and find the best advertising plan for your business.

This post is written for local service-based companies, but the theory can be applied to any type of business.

Step 1 - Establish Your Primary Goal

Are you looking to increase your overall exposure and brand or are you trying to connect with more potential customers who need your services right now? For most small to medium-sized companies it’s typically more valuable to focus on advertising that can generate immediate results. Branding requires a larger investment of time and money to be effective. Also, branding strategies that work for extremely large businesses like Apple or Coke aren’t going to work for smaller businesses because of the obvious difference in the amounts of their advertising budgets.

Pro Tip: Allocate the majority of your budget towards potential customers who are looking for your services right now.

Step 2 - Effectively Track the Results of Your Advertising

The advertising sources that offer the best tracking are typically digital mediums, because the source of the leads can be tracked accurately with web analytics. Asking people how they heard of you is a good practice, but it isn’t very reliable. We tested this method by adding a question to some of our client’s contact forms and found that most people just select a random choice, to complete the form.

Pro Tip: Focus on advertising mediums that are fully quantifiable first. If you are advertising in print, be sure the contact number you list is a call tracking number so you can monitor how many calls you receive directly from the ads.

Step 3 - Configure Goals in Google Analytics to Track Your Advertising Effectively

For most local service companies new customer leads are typically received via phone, email or a contact form. Google Analytics is a free analytics software that will track which advertising mediums leads are generated from. This can be integrated with call tracking software to track incoming phone calls, but would need to be installed and configured by someone who is experienced with the software. Ask the company who makes updates to your website or find a digital marketing agency that can set up this tracking for you.

Pro Tip: Have a contact or estimate form on your website, instead of just an email so you can track leads. When someone just clicks on an email address from your website they are not tracked. Also, forms allow you to maintain control over the information a person provides you.

Pro Tip 2: CRM (Customer Retention Management) software sometimes offer an integration with Google Analytics that will automatically import the information filled out on the form directly into the CRM. Vonigo is one CRM that offers this functionality and is built specifically for field-based service businesses. 

Step 4 - How to Determine Your Advertising Winners and Losers?

Before branching out to new advertising mediums you’ll want to measure the results you are receiving from your current advertising mediums. Here are some steps to determine your current results and what to do next.

1. Determine Your Baseline for each Medium: Review each of your current advertising channels to determine their ROAS (Return on Ad Spend). The simplest way to factor this is to divide the total revenue for each medium, by the total amount invested in that medium. For example, if you invested $10,000.00 in a year and received $100,000.00 in revenue you have a 10:1 ratio of advertising investment to revenue.
2. Focus on the Winners: When there is a large variance in returns across different mediums, consider eliminating the mediums with lower ROAS and investing more into the medium producing the highest ROAS. Continue increasing your budget for this top performer, until you are receiving the maximum number of leads from that medium. Repeat this same process for the advertising mediums that are 2nd, 3rd etc.
3. Reallocate Your Investment: If your current advertising channels are maxing out your budget reallocate the budget to focus on outperforming the advertising channel with the lowest results and eliminating it. By optimizing your existing advertising mediums you can then create additional room in your budget for a new medium that may offer a lower ROAS, and still be profitable. This is a topic for another post, but here is an in-depth article on customer acquisition costs.
4. Eliminate the Losers: If the new advertising medium outperforms your least performing medium consider eliminating that advertising source or reducing your budget.

Pro Tip: Be patient. The results you receive in the first month or two may not be representative of your results after 6 months. Ask the company you are considering advertising with how long it usually takes to ramp up the campaign.

Most of our service pages include an estimated time for results for each service located in the FAQ section at the bottom of the page.

Step 5 - What is Your Potential Risk?

Some advertising channels could produce no results at all. Here are a few things to consider to determine your potential risk.

1. Can they provide you with references in the same industry and geography that are experiencing success?
2. Is there a contract and if so what is the length of that contract?
3. How long does it typically take to start generating results?
4. Determine the actual costs.
   

Bonus Tips:

• Focus on the advertising channels that are producing the best results for you currently. Explore new ways to continue to optimize that channel, before adding new advertising mediums.
• Focus on advertising mediums that give you a competitive advantage. Choose mediums that the performance results are determined by the skill of the person managing it, rather than mediums where all advertisers receive the same results. This will require finding experienced partners to help you achieve the best results.
• Maximize each channel before branching out further to get the most from your investment. Most digital advertising channels require management to work effectively, so for every channel there is typically a charge for the advertising plus the management.

If you have additional questions or you would like to improve the results you're receiving from your advertising efforts please contact us.