Your Shop's Ideal Marketing Budget
When asked what the ideal marketing budget for a shop should be, Brandon and Taylor Pickering aren’t set on an exact number or range. They believe a marketing budget shouldn’t always be fixed, and should match your shop’s size and overall goals.
Brandon, the operations and finance manager at Colo.-based Pickering’s Auto Service, says he keeps the shop’s budget to 10 percent of gross revenue. This covers the marketing expenses for Pickering’s two shops, the marketing director’s salary and occasional discounts.
While he says some shops might not be able to fathom why a shop would venture to spend 10 percent on marketing, Brandon says it works well for them.
“Every shop is different. Some shops spend nothing, just word of mouth,” Brandon says. “Others try to stay very low like 3 percent while still others may be at a more moderate expense of 6 percent.”
Brandon says that the shops who spend less overall on marketing are usually going to be the smaller shops, where the owner handles a lot of the marketing themselves.
“Once you get involved with having a company that handles your marketing for you, there is now a consulting fee or admin charge, and if you are a multi shop business, you may employ a marketing director,” Brandon says. “These additional costs that are added to the direct costs of the marketing all change the percent of gross revenue that is spent on marketing/advertising.”
Taylor, the marketing director at Pickering’s Auto Service, agrees that, all in all, there is no one size fits all magic marketing budget number. If your shop is looking to grow, your overall budget may need to increase. If you’re looking to retain, your overall budget may remain constant.
“The key is to ensure that whatever percentage of your budget you’re using is being maximized in efficiency and effectiveness,” Taylor says. “You can throw all the money you want at marketing, but if it’s not helping you accomplish your goals, it’s essentially a wasted opportunity.”