Home services companies should spend 8-15% of gross revenue on marketing. If you're doing $1M in revenue, that's $80,000-$150,000 per year, or roughly $6,500-$12,500 per month. Companies in growth mode should lean toward 12-15%. Companies maintaining a full schedule can hold at 8-10%. The exact number depends on your market competition, average ticket size, and how fast you want to grow. But if you're spending less than 8%, you're likely losing ground to competitors who aren't.

The Real Answer: It Depends on Where You Want to Be

Every home services owner asks this question. And every marketing agency gives the same vague answer: "It depends."

Here's the thing. It does depend. But not in the way most agencies mean it. They use "it depends" as a dodge. We use it as a starting point for math.

Your marketing budget depends on three things:

  1. Your current revenue: the baseline
  2. Your growth target: where you want to be in 12 months
  3. Your market competition: what it costs to show up where customers are searching

Why 8–15% Is the Right Range

The Small Business Administration recommends 7-8% of gross revenue for marketing. That's for all businesses. Home services companies need more. Here's why:

  • Local competition is fierce. The home services industry hit $90 billion in 2024 and is still growing. In most markets, 10+ companies compete for the same "HVAC repair near me" searches.
  • Your customers search when they need you. Not before. Not after. Right now. If you're not there, your competitor gets the call.
  • Your average ticket justifies the spend. A $5,000 HVAC install or a $3,000 repipe makes the math work fast.
Marketing Budget Rule of Thumb Maintenance mode (full schedule): 8–10% of gross revenue. Growth mode (expanding, hiring): 12–15% of gross revenue. New company (under 2 years): 15–20% of gross revenue.

Budget by Company Size

Here's what the numbers look like at different revenue levels. These are annual totals. Divide by 12 for your monthly budget.

Annual Revenue Maintenance (8–10%) Growth (12–15%) Monthly Range
$500K $40K–$50K $60K–$75K $3,300–$6,250
$1M $80K–$100K $120K–$150K $6,700–$12,500
$2M $160K–$200K $240K–$300K $13,300–$25,000
$5M $400K–$500K $600K–$750K $33,300–$62,500

These numbers might seem high if you've been spending $500/month on a "marketing package" from the last agency that burned you. But look at it this way: if your average ticket is $350 and your close rate is 50%, a $5,000/month marketing budget needs to generate just 29 leads to break even. Most of our partners see 3:1 to 10:1 returns.

Where to Spend It: Channel Allocation That Actually Works

Not all marketing dollars are equal. Here's how we allocate budgets for home services companies based on where they are in their growth journey.

Year 1: Build the Foundation

When you're starting fresh with digital marketing or rebuilding after a bad agency experience:

Channel Allocation Monthly ($5K budget) Why
Google Ads (PPC) 35% $1,750 Immediate calls while SEO builds
Local Services Ads 20% $1,000 Pay-per-lead with Google Guaranteed badge
SEO 25% $1,250 Long-term organic growth compound
Website 10% $500 Your site must convert the traffic
Email & Automation 10% $500 Don't lose the leads you already paid for

Year 2+: Scale What Works

After 12 months of data, shift budget toward what's proven:

Channel Allocation Monthly ($8K budget) Why
SEO 30% $2,400 Organic is compounding, feed it
Google Ads 25% $2,000 Proven campaigns, refine and scale
LSAs 15% $1,200 Consistent lead flow
Meta Ads 15% $1,200 Retargeting + seasonal campaigns
Email & Automation 10% $800 Reactivation + review generation
Reputation 5% $400 Reviews drive everything else

Stop guessing where your budget should go. Get a free growth audit and see exactly what's costing you leads.

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The Mistake We See Constantly: Cutting Budget in Slow Season

This is the most expensive mistake in home services marketing. Every year, the same thing happens:

  1. Summer hits. Phones ring. Schedule fills up.
  2. Owner thinks: "Marketing is working great."
  3. September comes. Calls slow down.
  4. Owner thinks: "Let's cut the marketing budget until things pick back up."
  5. January comes. No calls. No pipeline. No momentum.
  6. Owner restarts marketing from zero. Pays premium to rebuild.

Slow season is when your competitors pull back. That means cheaper clicks, less competition, and more visibility for you. The companies that market through slow season are the ones that come out the other side booked solid.

What Smart Owners Do Instead

  • Shift budget, don't cut it. Move paid ad dollars toward maintenance agreements and tune-up specials.
  • Double down on SEO. Content published in slow season ranks by busy season.
  • Run reactivation campaigns. Email past customers with seasonal reminders. That's revenue sitting in your CRM.
  • Build your review count. Ask every happy customer for a review. Come spring, you've got 50 new 5-star reviews your competitor doesn't.

How to Know If Your Budget Is Working

Numbers. Not feelings. Not "I think the phone rang more this month." Actual numbers.

Track These Three Metrics

  1. Cost per lead (CPL): Total marketing spend ÷ total leads. For home services, target $25–$75 per lead depending on service type and market.
  2. Cost per acquisition (CPA): Total marketing spend ÷ jobs booked. This is the number that matters. If your average ticket is $500 and your CPA is $100, that's a 5:1 return.
  3. Return on ad spend (ROAS): Revenue from marketing ÷ marketing spend. Target 3:1 minimum. Our partners average 5:1 to 10:1.
ROAS (Return on Ad Spend) The revenue generated for every dollar spent on marketing. A 5:1 ROAS means every $1 spent returns $5 in revenue. For home services, 3:1 is the floor. Anything below that means something's broken.

What Good Looks Like

For a plumbing company spending $5,000/month:

  • 150–200 leads per month
  • $25–$35 cost per lead
  • 60–80 jobs booked (assuming 40% close rate)
  • $28,000–$40,000 revenue generated (at $350–$500 avg ticket)
  • 5.6:1 to 8:1 ROAS

If your numbers don't look like this, something's broken in your funnel, and it's probably not the budget. It's where the budget goes.

The Bottom Line

Spend 8–15% of gross revenue on marketing. Allocate it across channels that drive calls, not just clicks. Don't cut in slow season. Track CPL, CPA, and ROAS religiously. And if your current agency can't show you these numbers, they're not doing their job.

Your marketing budget isn't an expense. It's the investment that keeps your trucks rolling and your crew busy. Treat it that way.

Frequently Asked Questions About Home Services Marketing Budgets

What percentage of revenue should a home services company spend on marketing?
Most successful home services companies spend 8–15% of gross revenue on marketing. If you're in growth mode, lean toward 12–15%. If you're maintaining a full schedule, 8–10% is typically sufficient. New companies under two years old may need 15–20% to establish market presence.
How should I split my marketing budget between Google Ads and SEO?
Start 70% paid (Google Ads + LSAs) and 30% SEO while you build organic presence. After 12 months, shift toward 50/50 as SEO compounds. The paid channels drive immediate calls while SEO builds long-term, lower-cost lead generation.
Is a $1,000/month marketing budget enough for an HVAC company?
At $1,000/month you're limited. That barely covers basic Google Ads in a competitive market. Most markets require $2,500-$5,000/month to compete effectively. If $1,000 is your ceiling, focus it entirely on Google Business Profile optimization and LSAs to maximize every dollar.
What's the ROI I should expect from digital marketing as a home services company?
Expect 3:1 to 10:1 ROI depending on market competition, average ticket, and close rate. HVAC and plumbing with high average tickets typically see the best returns. If you're not seeing at least 3:1, something in your funnel needs fixing: the spend, the targeting, or the landing page.
Should I cut marketing budget during slow season?
This is one of the most common and costly mistakes. Slow season is when your competitors pull back, which means cheaper clicks and less competition for your customers. Shift your budget toward maintenance agreements, reactivation emails, and SEO content instead of cutting it entirely.
What's a realistic budget for a plumbing company doing $1M in revenue?
At $1M revenue, budget $80K–$150K annually ($6,500–$12,500/month). Allocate roughly: SEO $1,500, Google Ads $3,500, LSAs $1,500, email/automation $500, website $500. Adjust based on what drives the most booked jobs in your specific market.