How Much Should Your Fire & Security Company Spend On Marketing?
by Jo Shaer, on May 8, 2019
Ian from Blake Fire & Security Systems had to sit down and take a deep breath when he first saw our marketing proposal.
"Those are scary numbers!"
We get it! You're used to getting new Fire & Security work through existing customers and word of mouth referrals. That type of marketing costs NOTHING. Zilch. Nada.
And lovely warm enquiries through word of mouth referrals from happy customers has got you to a healthy size and a good turnover. So why should you be considering putting your hand in your pocket for marketing?
If you're happy with your current turnover, you don't need to.
BUT if you have ambitious expansion plans, you are MISSING OUT! You're not getting in front of a huge group of people who need your services TODAY. And they're searching for the perfect supplier on Google:
- People who are not connected to your existing customers.
- People who have never heard of your Fire & Security company.
- Your competitors' customers.
- People who have moved into a new home that doesn't have a security system.
- Businesses who have moved into a new premises that doesn't have a fire OR security system.
- Businesses and schools that have realised their security provider isn't meeting their needs.
So how will you reach these elusive golden geese...?
You believe that these people may be searching for installers on the internet. And you want some help to get in front of them. For the best chance of success, you will need a specialist in internet marketing for Fire & Security companies.
That's when you contact Lollipop.
We ask you about how much you want to increase your current turnover by.
And how much you want to spend on your marketing budget.
Which is where you get that tight feeling in your chest.
Because YOU don't really know how much you should spend on marketing.
What are other Fire & Security companies budgeting for marketing?
You know the big national players are spending a FORTUNE on national advertising on TV and radio.
Likewise the sales teams of the DIY kit manufacturers.
These marketing budgets are all focused on BRAND AWARENESS.
Whereas, the electricians and firemen will be relying solely on word of mouth to spread the news about their services.
So you're stuck in the middle. Between a rock and a hard place. Along with thousands of other small to medium sized alarm system installation companies. And we're back to the same question...
How much should you spend on marketing?
The spend will vary depending on an array of factors:
- company size;
- company goals;
- products and services offered; and
- WHAT DO YOU WANT TO ACHIEVE?
Is 'What should I spend on Fire & Security marketing' the right question?
Imagine asking a plumber to visit your home and demanding that he give you a price for plumbing. He would need more information. The actual reason you called him was to fix your broken toilet. That's what you want the plumber to fix.
People don't come to you and say 'how much will Fire & Security' cost? They come to you with a specific problem. They've been burgled. Or they are worried about being burgled. So you give them a list of things they can do to prevent burglary. And you give them a price for doing each of those things.
So your marketing budget needs to cover specific needs.
Are you looking for brand awareness - just to drive more traffic to your webiste?
Are you looking to improve your sales funnel and increase the number of website visitors that turn into customers?
What we do know about Fire & Security budgets
In the US, one agency working with Fire & Security companies who turn over in excess of $1m explained that:
the majority of our security alarm clients spend between $2,500/month and $5,000/month on digital marketing. This includes marketing services - strategy, website content & blog updates, running Google and/or Facebook ad campaigns, analytics reporting and analysis, and email marketing. It also includes budget for digital advertising - paying Google and Facebook for clicks on digital ads.
That's around £2,000 to £4,000 a month. This covers:
- attracting your ideal customers to your website
- getting their contact details
- sending emails that help them to see why you are the best choice
- getting your sales team to contact the warmest leads
This level of investment fits with what our own most successful UK Fire & Security clients are spending.
Do you want to see full sales pipelines with values in excess of £100k in a single year that don't involve word of mouth? Then you will have to get your head around ithis simple fact. You need to INVEST in your marketing.
Think about it. Wouldn't you be prepared to invest £50k if it brought back £250k or £100k if it brought back £500k?
Do other industries invest this sort of money in their marketing?
Back in 2015, I wrote an article on how much your business should spend on marketing.
Then the marketing gurus recommended that if you want:
- to maintain your current levels of awareness and visibility you should spend 5% of your total turnover
- to grow and gain market share, the figure rises to 10% of your total revenue.
An article in the Wall Street Journal by Deloittes in 2017 looked at marketing budgets for businesses across all industries.
It said that, on average, companies spend 7.5% of total revenue on marketing.
However, a CMO Survey revealed that the 38.4% of companies with SUCCESSFUL marketing spent more. These companies reported that their marketing was responsible for leading revenue growth. And they invested 14.5% of the overall company budget.
How much should YOU spend on marketing your Fire & Security company?
The question business coach Perry Marshall always asks is:
If there was a magic gumball machine where you put in some money and a customer popped out, how much would you be prepared to put in?
Think about how much the average installation is worth to you. How much do you actually make on that job after all your regular expenses. What's the profit on that job.
How much of the profit on that one job would you be prepared to invest to get another similar customer?
Then you need to multiply that figure by the number of NEW customers that you want to attract.
That's your marketing budget.
BUT REMEMBER: You need to have money to invest in marketing AND the capacity to deliver on ALL the new work.
For every new installation you take on, you have an ongoing customer with a whole lot of monthly maintenance, monitoring and future equipment upgrades and upsells.
You need to have the bodies to fulfil on all this.
What happens if you do nothing?
Sometimes a Fire & Security director will tell me: "Oh, that's too expensive!"
Think about it. How would YOU respond to a potential customer who says: "Too expensive".
If it's a tyre-kicker just checking for the price, "Good bye" is probably the right response. Competing on price at the low end of the market is NOT a recipe for success. It's a race to the bottom. For marketers AND Fire & Security installers.
However, if you're on a site survey at a school, your response will be different. That person may have unrealistic expectations.
Some explanation may be required. Just because you can buy CCTV cameras for £50 online doesn't mean they will be suitable for a school. Nor for Ofsted safeguarding rules either...
Likewise, just because word of mouth is free OR DIY website options exist, it doesn't make them the right choice for promoting your Fire & security company.
Cost is always relative. Expensive in comparison to what?
Sure, it's more money than you have been spending on getting enquiries through word of mouth. But you know that word of mouth is not enough to expand. So what do you do?
Do you have some other option in mind?
Or will you just carry on relying on word of mouth?
If you change nothing, nothing will change. You will continue to get the same level of enquiries. And your Fire & Security business will not be growing.
And what effect will that have on you? And your family life?
Without the extra income there will be consequences:
- No extra staff to lighten your load
- No early retirement
- Forget that extra holiday with the family
And it goes on...
Will price really keep you from getting what you really want?
If you think about it, it's actually not expensive at all. It's back to the Gumball Machine. If for every pound you put in you get two back is that a good deal?
Of course, you'd be there all day.
According to the figures above, to grow your business you need to be investing a significant amount. For gaining market share and/or revenue growth it should be 10%-15% of revenue. Or 5% to stand still.
The results of investing in Fire & Security marketing
Back to Ian Blake and "Those are scary numbers!" He knew he wanted more vans on his forecourt. He knew he wanted to build a bullet-proof future for his family and his employees. He knew he needed to go beyond word of mouth to get more Fire & Security customers.
Lollipop showed him a proposal with a plan to make that happen. And data from previous customers to show what sort of results he could expect and how long it would take.
Ian took a deep breath and invested. You can read all about what happened next by clicking on the image below.
With huge thanks to Ian of Blake Fire & Security Systems