top of page

How to Stop Wasting Money on Marketing Your Paving Company


As an asphalt paving company, you know the importance of marketing your business to potential customers. However, deciding on the right marketing budget can be a daunting task. You want to make sure you're investing enough money to get the results you need, but you also need to be careful not to overspend. In this post, we'll discuss some tips to help you determine the right marketing budget for your asphalt paving company.


Know Your Numbers


Return on Investment (ROI) is a measure of the profitability of an investment relative to its cost. In marketing, ROI measures the effectiveness of a campaign by determining how much revenue is generated compared to the amount spent on the campaign.


As an example:


First, your company needs to determine how much profit a new project brings in.


Lets say that a paving company profits $2,000 per new client and wants to determine how much they can afford spend on marketing to acquire each new client.


First, the company needs to determine the cost per acquisition (CPA)


Let's say that the company runs a marketing campaign that costs $2,500 a month and generates 10 new customers.


CPA = $2,500 / 10 = $250


In other words, it cost the company $250 to acquire each new customer through there marketing efforts.


10 new clients a month equals 20,000 of profit for the company


That's $20,000 in profit for $2,500 in marketing expense.


This is a 8/1 Return on your marketing investment


That would Cost 30,000 per year and Profit $240,000 per year


If your profit margins are 25% and you profit $240,000 per year, you can calculate your gross revenue by using the following formula:


Gross Revenue = Net Profit / Profit Margin


Therefore, your gross revenue would be $960,000.


To calculate the percentage of your gross revenue that you are spending on marketing, you can use the following formula:


Percentage of Gross Revenue Spent on Marketing = (Marketing Spend / Gross Revenue) x 100%


Substituting the values given in the question, we get:


Percentage of Gross Revenue Spent on Marketing = ($30,000 / $960,000) x 100%


Percentage of Gross Revenue Spent on Marketing = 3.2%


Therefore, you are spending 3.2% of your gross revenue on marketing.


Setting a marketing budget for your paving company is different for every company because they each have individual goals.


As a general rule of thumb, businesses should allocate between 5% and 10% of their revenue to marketing. For startups or small businesses looking to grow, they may need to spend closer to 10% of their revenue on marketing to establish their brand and generate leads.


In summary, to understand the ROI of your marketing money and determine how much you should spend to acquire each customer, you need to calculate the ROI and CPA of your campaigns and consider the lifetime value of a customer. By doing so, you can make informed decisions about how much to invest in marketing and ensure that your investments are generating a positive return.


Contact us at Paving Success Network for help determining what your budget should be to match your paving goals. We will do it all for you! Its free and we would love to help you build a strategy for your company. Text or Call 210-899-0349

123 views0 comments
bottom of page