Marketing & agency
Contractor Marketing ROI Calculator
Works marketing return for a contractor, where the phone is usually the leak.
Result
Measured on gross profit rather than revenue, which is the stricter and more useful test. A campaign showing a positive revenue return can still be losing money once job costs are paid.
See lead follow-upHow the calculation works
Gross margin on jobs attributable to the spend, less the spend, divided by the spend. For a contractor the attribution comes from asking at intake, and the figure that frequently matters more than the return is how many enquiries were never answered at all.
What moves the number
- Gross margin on jobs won, not revenue.
- Answer rate on enquiries.
- Close rate from quotes given.
- Whether the marketing reaches the right service area.
Where this one goes wrong
A contractor whose marketing generates enquiries that nobody answers is paying for leads and losing them before any sales process begins, and fixing call handling is almost always cheaper and more effective than increasing spend. Measure the answer rate first. Service area targeting is the other common waste, since enquiries from outside the practical travel radius cost the same and cannot be served profitably.
Before you quote
- Measure the answer rate before increasing spend.
- Target the practical service area, not a wider one.
- Use gross margin on jobs won as the numerator.
Questions
About this calculator
Why does contractor marketing underperform?
Most often because enquiries go unanswered while the crew is working. The spend generates leads that are lost before any sales process begins, and fixing call handling is cheaper and more effective than increasing the budget.
How should attribution be handled?
By asking every caller how they found you and recording it. It is simple, cheap and more reliable than tracking in a market where local visibility, signage, referrals and search all contribute to the same enquiry.
Does service area targeting matter?
Considerably, since enquiries from outside the practical travel radius cost the same to generate and cannot be served profitably. Tightening the targeted area is one of the few changes that improves return immediately.
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Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Marketing spend ($). Enter your own figure; the page starts at $5,000.
- Leads generated (leads). Enter your own figure; the page starts at 120 leads.
- Close rate (%). Enter your own figure; the page starts at 28%.
- Average job value ($). Enter your own figure; the page starts at $880.
- Gross margin (%). Enter your own figure; the page starts at 45%.
The result updates as you type, so you can try a figure, see what it does to return on marketing spend, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Marketing spend | $5,000 |
| Leads generated | 120 leads |
| Close rate | 28% |
| Average job value | $880 |
| Gross margin | 45% |
What comes out
| Result | Value |
|---|---|
| Return on marketing spend main result | 166% |
| Revenue generated | $29,568 |
| Cost per lead | $41.67 |
| Cost per booked job | $148.81 |
This spend produced 33.6 jobs and $29,568 in revenue, at $148.81 per booked job. On gross profit the return is 166%.
How sensitive the answer is
Holding everything else steady and changing only marketing spend, this is what happens to return on marketing spend. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Marketing spend ($) | Return on marketing spend |
|---|---|
| $2,500 | 432% |
| $3,750 | 255% |
| $5,000 example above | 166% |
| $7,500 | 77.4% |
| $10,000 | 33.1% |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Marketing spend ($)
- A money amount, starting at $5,000.
- Leads generated (leads)
- Measured in leads, starting at 120 leads.
- Close rate (%)
- A percentage, between 0 and 100, starting at 28%.
- Average job value ($)
- A money amount, starting at $880.
- Gross margin (%)
- A percentage, between 0 and 100, starting at 45%.
What the results tell you
| Result | What it is |
|---|---|
| Return on marketing spend | The headline result. A percentage. |
| Revenue generated | A money figure. |
| Cost per lead | A money figure. |
| Cost per booked job | A money figure. |
Attribution is the weak link
Return and cost-per-lead figures depend on knowing which enquiries came from which source, and most home-services businesses do not track that reliably. If the source data is guesswork, so is the return.
Keep going
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