How Much Should an HVAC Company Spend on Marketing?
There is no HVAC-specific budget number that holds up under scrutiny, and anyone quoting one without a source is guessing. What you can do is start from a documented benchmark, then test it against the two things that limit an HVAC company: crew capacity and cost per booked job.
A benchmark worth knowing, and its limits
The U.S. Small Business Administration’s marketing budget guide cites research putting average marketing spend at 7.9 percent of revenue in 2018, and notes that budgets vary widely by business type and industry. It advises checking your industry trade association or trade publications for benchmarks. Two caveats: the article dates from July 2019, and the figure covers all business types, not HVAC.
Treat it as a sanity check, not a target. If you spend 1 percent of revenue and want to grow, or 20 percent and are not booking more jobs, the benchmark tells you to look harder. It does not tell you the right number.
What the arithmetic looks like
Illustration only: 7.9 percent of $2,000,000 in annual revenue is $158,000 a year, or about $13,200 a month. Count everything as marketing, including ad spend, fees, your website and tools, and that is the pool. It is not a recommendation for a company that size.
Capacity comes before the percentage
A marketing budget is only useful if your crews can turn leads into jobs. If your install crews are booked three weeks out, more leads add to the backlog and to the risk of poor reviews. If your techs are idle in April, the constraint is demand, and spend is the fix.
So ask how many more installs a month your crews can take on without quality slipping. That number puts a ceiling on what extra lead volume is worth to you.
Where the money goes
- Media: what you pay Google and other platforms for clicks or leads.
- Management: the fee for whoever runs the accounts, in-house or an agency.
- Tracking and follow-up: call tracking, your CRM and missed-call text-back. It is easy to skip and expensive to lack, because spend you cannot measure cannot be improved.
Ask any agency to break its proposal into these three lines. If it will not, you cannot compare offers.
Judge the spend on cost per booked job
The number to watch is cost per booked job: media spend plus fees, divided by the jobs that made it onto the schedule. Hypothetical example: $12,000 in total spend and 20 booked jobs is $600 per booked job. Whether that is good depends on what a job is worth to you, so compare it with the gross profit on the mix of repairs and installs you actually book.
Cost per lead is a useful diagnostic and a poor result on its own. A cheap lead that never books costs you more than an expensive one that does.
When to spend more, and when to hold
- Spend more when your crews have open capacity, calls are tracked to the campaign that produced them and your phones are answered promptly.
- Hold when your crews are already booked out, when you cannot tell which campaigns produce jobs, or when a large share of calls go unanswered.
If you want help sizing this against your market, see how we approach lead generation for HVAC contractors or get in touch.