Marketing During a Recession | Episode 8

In Episode 8 of the Trades Secret Podcast hosts Devon Hayes and Amanda Joyce discuss tips and strategies for marketing in the face of a recession. Don’t miss these actionable insights designed to help you plan ahead and avoid surprises when you begin feeling the pinch from a slow down in construction spending.

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Transcription:

Amanda Joyce:

Hi, guys. I’m Amanda Joyce.

Devon Hayes:

And I’m Devon Hayes.

Amanda Joyce:

Today’s trade secret is contractor marketing in a pending recession and here’s why you should care. Today, we are going to be revealing specific tactics that you can implement in your 2023 marketing plan that can help you fill your pipeline in the face of, dare we say it, a recession.

Devon Hayes:

Welcome to Trade Secrets where we demystify digital marketing to help contractors get the most bang for their marketing bucks.

Amanda Joyce:

This is for you if you’re a contractor looking for actionable marketing insights.

Devon Hayes:

Learn from home services industry experts to elevate your business through simplified marketing strategies.

Amanda Joyce:

Let’s dive into today’s trade secret.

Devon Hayes:

We definitely don’t pretend to be economists but we do follow along. I’ve had some great mentors in my career and so a report I always follow, if you want to check it out, it is from Bill McConnell. He’s the CEO at the Vertex Companies and he always does a state of the construction industry and while… It’s really in depth and great so I encourage you to check it out. But with that, so let’s just talk about can some greater points here, Are we in a recession, are we not? What does that mean to contractors? We found this podcast topic really important to discuss because what we noticed, our clients, our bread and butter, is home service contractors and our business runs right along with yours.

Amanda Joyce:

With yours. Absolutely. Yeah.

Devon Hayes:

Yep. Amanda’s like a guru with numbers and it’s true. When your business slows, our business slows. As we’ve talked about before, I come from a big family of contractors and I’ve worked in the construction industry almost my entire career. And so, we got to pay attention to these things and we’re looking out for you. Of course, when we did our planning, we’re like, “Well, this is a great topic,” and there’s many great contractor marketing podcast out there, but I don’t think there’s anybody that’s really touched on this yet. So we put our heads together and this is the advice we’d give to our dad, right? My dad owns a contracting company, this is what I would tell my dad to do. So you can take it as the nearest and dearest most experienced advice we would give to you. So with that, we wanted to just jump in and talk about, “Are we in a recession?” Some of you-

Amanda Joyce:

Exactly.

Devon Hayes:

I guarantee have a much more in-depth understanding of this but looking at 2022-

Amanda Joyce:

Others of us keep hearing people talk about it all the time on the news and in the media and all over the place and we’re hearing conflicting things. Devon, in her brilliance, she was researching for a blog for our website and really went down this rabbit hole and pulled out some really interesting nuggets that I’m so excited for her to share with us today.

If you want to hear more, definitely go over to our blog and read the full length post. We’ll tee it up again at the end here but just want to point out that this is a lot to take in but Devon’s going to give us some serious knowledge bombs and if you want to read more, you can always find that on our website. So with that, Devon, please continue with what you were saying. You’ve-

Devon Hayes:

Yes.

Amanda Joyce:

You’ve really done the work and you know what you’re talking about.

Devon Hayes:

Yeah. I do. I’m trying not to get too in the weeds here because at the end of the day, the goal of this podcast is to help contractors and you will be helped. You will have some great nuggets to take away as far as what we would recommend you do for your marketing, how to spend your marketing dollars during the next 12 to 18 months. So the first thing, one of the key economic indicators of a pending recession is two consecutive quarters of negative GDP. We had that in 2022 but then the following two quarters were up. So the economists were like, “Eh, there goes that indicator.”

And then, we had, I think, it was two consecutive quarters where the yield curve inverted and then that recovered and I guess the last shoe to drop that we’re all watching, and I say we all but I mean the economists who actually declare it an actual recession is the unemployment rate. Currently, it’s at 3.5%. That is the lowest it’s been in, I forget how many years, but it still hasn’t started to rise. When the unemployment rate starts to rise, that’s when we all get nervous and we wait for the official red flag on a recession. So it actually dropped from 3.7% down to 3.5% The last quarter.

So unemployment is low but construction spending, it’s not factored into when an economist will declare recession but when construction spending expands, the economy is in an expansion. And then, when it is retracted, then we’re in a, I guess, retraction phase, I guess you call it. I don’t know. I’m sure there’s a technical term out there. I’m a marketer, people. Anyway, but I mean, construction spending is still at an all time high. It actually increased over the fourth quarter and in 2022 and the new number has come out February 1st so we’re watching so that’s why we’re calling it a pending recession. Maybe it’s just an economic downturn.

But in any case, what you want to do is plan for that because the construction industry, it’s a backlog industry, right? It’s just the nature of the business. Larger companies might have a 12 to 18 month backlog but some of the smaller contractors out there, a lot of the smaller companies we work with, they have a 3 to 6 month backlog which is a lot different. So with all that, bearing all that in mind, Amanda and I enter infinite wisdom and experience and research and what we’ve seen firsthand, we’ve come up with where we would spend our money and where we would tell our family contracting businesses to spend their marketing dollars, right? And I-

Amanda Joyce:

Exactly. I want to say too that I think we both really realized how important it was to cover this topic after what we experienced after the COVID crazy times. What we saw with a lot of our clients were initially for this first 6 to 8 months, we weren’t feeling it in our business. Our clients weren’t necessarily feeling it, stuff was moving status quo. We were updating websites and letting people know how businesses were pivoting to continue to serve their clients but they weren’t really necessarily feeling the pinch yet.

And then, 8 months to 12 months later, we were suddenly hearing from some clients that were like, “Oh, I got to pull back my marketing dollars. Things are a lot tighter than we were anticipating. Things have dried up.” And so now, as we’re looking at this impending recession that we’re hearing a lot of people talk about, we feel like talk about a time to think back on some of the advice that we did give clients at the time but maybe even some more detail that we didn’t share at the time that now, in hindsight, we wish we would’ve pushed a little bit harder. And so, we want to make sure that we’re being really proactive as we talk about this. Maybe a full on recession won’t happen but let’s talk about what you can do right now so that we can plan ahead and your marketing is going to continue to serve you even if the economy isn’t.

So what we learned in 2020 was really just the importance of really laying out a marketing strategy ahead of time and understanding that even if you’re not feeling the pinch of an impending change in the economy, that you’ve really got to plan ahead and really get that. Just make sure that your efforts today are really designed around serving you in a moment where maybe things aren’t rocky and rolling quite as well as they are.

I mean, we all need to learn that across the world, even in our private lives, when sometimes there’s an economic downturn coming but we don’t feel it right now so our spending hasn’t changed, the way we’re living our lives hasn’t changed. If we learned anything in 2020, it’s that it’s time to refocus now so that hopefully we don’t feel the pinch in our businesses when possibly spending calms down and maybe we’re seeing a few less of those leads come in on a monthly basis but we’re hopefully prepared to continue to grow our businesses or at least keep things steady so that we’re not losing the traction that we’ve made in recent years.

Devon Hayes:

Yes. Absolutely, and you made such a good point. We learned about this in our personal lives and trying to plan out for what’s to come so it affects personal and business. But okay, so let’s jump into, here’s what you’re going to do, all right? Here’s what you’re going to do with a pending recession, so your 2023 marketing. Invest in organic and what we mean by organic is not ads, nothing paid. For those of you that have a giant marketing budget, this might not apply so it can, probably in a more expansive way, but we’re talking about those contractors that are at $500,000 to maybe what $3 million, maybe up to $5 million. So organic marketing, this is search engine optimization or SEO. This is content marketing, writing the blogs that should always accompany your SEO strategy and fully optimizing your Google business profile.

Your Google business profile, you could probably manage on your own. SEO, we recommend working with an agency who knows what they’re doing. If you’re paying only $250 a month and calling that SEO, that’s not SEO, don’t do that.

Amanda Joyce:

No. Don’t do that.

Devon Hayes:

So, Amanda… Yeah. Save yourself. So for the next 6 to 12 months, focus your marketing dollars on that organic marketing. Focus it on posting to your Google business profile, making sure you’re applying to reviews, optimizing the heck out of that thing. We did another podcast on it but they updated that platform, the Google business profile platform, and you can be guaranteed that update was for a greater, larger, long-term strategy with Google. They’re measuring engagement and not just from customers reaching out to you but the way you reach back out to customers. Do you respond to messages? Do you reply to reviews right away? How often are you posting on your profile? So that’s organic, that can’t be taken away from you. Search Engine Optimization, I’m sure you guys have been beaten over the head with this term but it’s optimizing not only blog content but also what’s on your webpage already. What copy do you have about the services you provide right now?

Amanda Joyce:

Yes. So Conversion Rate Optimization, CRO, it’s the process of optimizing your website, your existing content to make sure you’re really increasing the likelihood that people are actually going to complete your conversion, whether it’s calling you completing that lead form. It’s really just looking at your website from a full, holistic approach and really looking at the user experience and making sure that you have the right pieces in place to move people through the funnel and get them to ultimately convert. So there’s a lot that can go into this.

Devon Hayes:

Yeah. It’s getting them-

Amanda Joyce:

But talk about a way to-

Devon Hayes:

To take the action you want them to take.

Amanda Joyce:

Exactly, and talk about a way to maximize what you’ve already got. You don’t need to spend a ton of money on it but just spending time on your website and thinking about how people are interacting with it. Where is your call to action? Do they have to scroll way down to find it? Where’s your lead form? How easy is it to click on a button and just get in contact? Some of those easy, tiny tweaks that to you might seem like, “What big of a difference can it make?” It’s crazy. Sometimes changing the color of a button can drastically improve the amount of conversions you’re getting on your website. So just spending time there can be a game changer as you’re planning for what’s to come.

Devon Hayes:

Yeah. Actually, a really cool stat I read somewhere was just that changing… If you use the verbiage, “Click here,” versus, “Submit,” on a button that has a 3% higher conversion rate than simply putting submit so little tweaks like that make a huge difference. The biggest thing with CRO and why we’re pushing it to be part of your marketing plan and marketing budget in 2023 is because it’s working with the assets that you already have. You don’t need to invest in buying a new website and redoing everything. You’re changing and updating and moving things around on your existing asset. There are definitely CRO tools out there that you can use and spend some money on. What’s interesting is for every $94 spent on lead acquisition, only $1 is spent on CRO which just means that companies aren’t thinking about this.

In our blog article about 2023 marketing, we’re like, “Why is this not a buzzword?” This should be a bigger buzzword in marketing because it’s for you. So making CRO work for you. Making your existing assets, rather, work for you and that’s very budget friendly, right? And so, you can work with your developers, your agency to do something like that, or hopefully, you’ve got an easy to edit website and you can do some testing on this yourself if you need to… What are they called? Tighten the belt a little bit and cut back on your marketing budget completely.

So invest in SEO, invest in content marketing. These next months, we would say at least 12 months, SEO takes 9 to 12 months to actually start seeing the leads coming in. We’ve had that sooner. We’ve had them start rolling in at 3 months but on average, in the home services industry, we would tell you to wait 9 to 12 months before you really anticipate getting that return on investment with SEO.

Now, once those 9 to 12 months hit and we see what the economy’s going to do and you do have to tighten those purse strings, then that’s where paid media comes in. Paid media is the thing that makes the phone ring instantly. Amanda, that’s so far outside of my expertise but I mean there’s all kinds of new things and great ways to use paid media and search engine marketing in 2023. So how would you recommend, the contractors listening to this, they’re taking our advice because we’re brilliant and they’re like, “Cool. Now, I’m at the point where, shoot, I got to pull back on this organic business you were talking about and now I need the phone to ring. I need business in the door. I need to create a pipeline and a backlog. Help.”

Amanda Joyce:

Yep. Absolutely.

Devon Hayes:

This is where you come in. Yeah.

Amanda Joyce:

Yes. So first and foremost, it’s Google local service ads across the board. I know we’re all still not sure how Google’s going to continue to shuffle the search results now that we’ve got continuous scroll but at the end of the day, you are not going to find a cheaper cost per call in any other ad buy. I mean, I would even venture to say in social or any place where you’re just getting really inexpensive clicks, you’re not going to get a cheaper phone call than you are in Google local service ads.

However, sometimes what we’re finding at certain markets is that the inventory isn’t necessarily there. So I would say first and foremost, even if right now, if you’re investing in SEO and you just want to spend a little bit of money in paid ads as well to keep that phone ringing, I would invest in Google local service ads and then let’s say eight months down the road, all that content you’ve written is really starting to serve you guys and you’re starting to get a lot more traffic on some of those pieces of content you spent so much time and effort on in the early part of the year, then I would say really ratchet up your budget on local service ads. Make sure whatever region you’re wanting to really drive leads in, maximize it, set your budget pretty high, and see how many calls you can get out of it.

Once you feel like, “Okay. I’ve figured out my diminishing point of return, this is when the phone stops ringing and I’ve still got some more budget on the table.” First and foremost, I would head straight over to Google ads and focus on paid search. These clicks do come in at a much higher cost with Google local service ads, we’re seeing people get a phone call for $70 inside of Google ads for really competitive terms. You might pay $70 for the click so it’s a new mindset but it’s also getting you in front of people that are actively looking for one of your really specific services.

So there’s tons of value in it, you just have to really watch it really closely. You can’t just turn it on and forget about it but there’s definitely a lot of opportunity there if you’re really trying to get the phone to ring and you can be really specific with it. With Google local service ads, you tell them what services you offer and they serve you up for the keywords that are relevant and there’s a lot of AI in it. With Google ads, you get to say, “I want to show up for this particular keyword,” so you can be really specific with it. You can be really geo-targeted. So let’s say, you’ve got one neighborhood where you are working a lot, your trucks are all over the place, you really want to get in front of those homeowners. You want to let them know you’re there, that you’re ready to provide.

If you’re a roofer, it’s roof replacements. Maybe you only go after roof replacement terms because you don’t want to spend money on repairs that you might have paid more for the lead than you do for the service call. So you have to really think about the lifetime value of the customer and just make sure if you are going to do paid ads, if you’re going to do paid search, you just have to make sure that you’re really thinking of the whole picture. With Google local service ads, most of us could afford to pay $70 for a phone call, whether it was a repair job or I mean, it’d be great if it was a much bigger job. But when you’re talking about spending $70 a click, even with a 10% click through rate, that’s a $700 lead. So if it’s full commercial roof replacement, that’s no big thing, but if it’s a small plumbing job, it’s probably not going to be worth the investment to do that.

So I know I’m getting a little bit wordy here but there’s just so much to cover when it comes to this. So I would say local service ads first, just blow them out of the water, then move into paid search. Also, another really important thing about paid search to do as well is to bid on your own brand name. That can be really inexpensive and it’s a really great way to just protect that real estate above your own organic search results, above your own Google business profile. Some people, it drives them crazy to pay for that click but it’s really easy if you’re not owning that for your competitor to come in and bid on that.

Literally, just the other day I needed to call a plumber that I’ve used for years that I am I very loyal to. I searched for him and I do this every day and I found myself almost clicking on the ad that was from a competitor because they were not owning their own brand real estate. Before I clicked through, I caught myself but if one of your customers that’s maybe not paying that close of attention or doesn’t know what they’re doing, they could easily click on that competitor and they’ve siphoned off that lead from you. So it’s extremely important to own your brand in paid search. If you’re going to bid on any service terms, make sure they’re high margin and you’ve got the room in your budget to pay a little bit more for that conversion and just really maximize those Google local service ads as much as you possibly can because you’re not going to beat that from a budgeting standpoint in terms of actual phone calls. I know that was a lot.

Devon Hayes:

Yes.

Amanda Joyce:

One… Yeah.

Devon Hayes:

So that was a lot. I have a question. So you’re talking about search engine marketing, what about social media paid ads? What about that? What would you say to a contractor who’s like, “I just saw this new stat and it says that social,” I actually did just see this, “that Facebook conversions on paid social media ads are at 9.5%. Should I put my dollars into social media ads?”

Amanda Joyce:

So you can hear some differing opinions on this. At the end of the day, you want an active audience who are really seeking your services out. It’s not uncommon. The thing is that stat is based upon user behavior across social media. It’s not specific to-

Devon Hayes:

Ah ha. So not just home services and contractors.

Amanda Joyce:

Yes.

Devon Hayes:

So it sounds real nice but it’s not specific. So that includes when they want to sell me a snuggie at Christmas and I convert, that’s where that metric comes from?

Amanda Joyce:

Yeah. Exactly. All the shoes that I didn’t know I needed that just come up in my feed, all that stuff, it covers everything. So yes, especially a lot of the B2C things out there, that’s just a quick transaction. It’s great for that. It’s amazing for it and I’m not going to tell you to never spend a dime in social. But if you’re really looking for someone who’s actively seeking a high dollar project, they’re probably not going to just casually find you while they’re scrolling through pictures of their friends from high school and people’s cat videos.

If they’re really an active consumer who’s really wanting to educate themselves and make a smart buying decision, they’re going to go to Google. In some cases, they might see that ad and then go google you and go look your company up. Every once in a while they might be like, “Oh my gosh. I need a new roof. I am so glad this popped up in my feed,” but you can’t expect that to happen very often. All of everything has to align perfectly for that to happen. At the end of the day, if you’re trying to capture a consumer that’s ready to make a buying decision, you’re much better off meeting them where they are, meet them where they are going to go look to educate themselves and make a smart decision and we all know that’s Google.

Devon Hayes:

Yeah. Especially in home services, nobody wants to be a dumb buyer. Nobody wants to get taken advantage of and there’s horror stories about contractors and marketing companies alike. But if you’re looking for a landscaper, a roofer, a plumber, an electrician, you are going to want someone that shows up, somebody who stands by their work, somebody who has reviews on the web. So a Facebook recommendation doesn’t carry as much weight or hold as much water as a review on Google.

Amanda Joyce:

Exactly.

Devon Hayes:

And so, even if you maybe see them and it’s a brand play on social, we all leave to go actually investigate and do our homework because again, consumers don’t want to be dumb and we want to feel like we’re making a smart choice and that always leads us back to a search engine where, “What does the BBB say? What do people say on Google? What do people say on Yelp?”

Amanda Joyce:

Exactly.

Devon Hayes:

Yeah.

Amanda Joyce:

Even as a contractor, you want an educated buyer who’s actually done their homework. You don’t want someone that’s just going to see an ad in their feed that you look like you’re the cheapest option in the area and they’re going to just click on you and go with you because they’re looking for the cheapest, not the best. Anyone that’s here listening and wanting to build a true brand and a business is looking for that kind of… They want the consumer who’s actually done the legwork and understands the value of what they do and is willing to pay the cost to get it done right.

And so, again, it’s not that you’re never going to find that person in social but you’re not going to find it as often as you might want to believe but all day long, I still like some of those other ads in my social feed because I’m going to buy them all day long but it’s sure as heck not going to be someone that’s going to come out and do something that’s going to cost me thousands of dollars to my property. I’m going to find that in Google.

Devon Hayes:

Yeah. Absolutely. And then, when you think about the commercial side of the trades too, right? We don’t just work with residential contractors, we work with commercial contractors. So we see the difference in commercial buyers. If you’re looking for a commercial roof or commercial electrician, those people sure as shit are not looking for you on Facebook so-

Amanda Joyce:

No.

Devon Hayes:

The value of those buyers and attracting those kinds of buyers is a lot different than on the residential side.

Amanda Joyce:

Exactly. On that note as well, some people might say, “Well, then why… Let’s talk LinkedIn.” LinkedIn is another ad opportunity for people that are more focused on the commercial space but it’s the most expensive social media platform by far in terms of just cost for advertising. Their targeting is better and you’re paying for it but again, you’re still spending a whole lot of money for a passive buyer that might just scroll by and find your continent interesting and click on it but they’re not going to the web and looking in that moment for a huge commercial roofer, for example. So I’m not saying not to focus there but if it’s my dad’s company and I’m telling them where to spend his money, I’m going to tell them first and foremost to go where people are actively looking for your services and just watch it like a hawk, keep a really tight hold on it, and you can lean on your CRO, just do everything you can to create this perfect environment to make them feel comfortable and educated and ready to buy and the pipeline will follow.

Devon Hayes:

Very good. All right. So we’re going to try and sum this up for you guys. So in summation, you’re planning, you got your marketing plan in place, you only got a few marketing dollars, this is what you’re going to do. Number one, for the next 12 months, you’re going to invest in SEO and content marketing. Make sure that it’s a reputable firm, make sure you own the content, and if you’re paying less than a thousand bucks a month, I mean, be wary of what you’re getting.

Amanda Joyce:

Be wary-

Devon Hayes:

That’s number one. Number-

Amanda Joyce:

Make sure about that content ownership thing because in some cases, you might be paying them $1000 a month and they’re not being really forthcoming about it, but you probably don’t own that content if you’re paying them less than $1000 a month so beware.

Devon Hayes:

Okay. So yeah, number one, SEO and content marketing. Go with a reputable firm, make sure you own the content, and that it is original content. Number two, optimize the ever-loving heck out of your Google business profile. You can do that by yourself all day long as a business owner. You’re at a job site, post, update. Anyways, their engagement on your business profile, getting reviews, all those things, optimize your Google business profile. That’s number two.

Number three, we’re going to say, I guess if you can do paid in conjunction with SEO, even better. If you can’t, say you’re at the end of the 12 months, now you’ve got to reallocate those marketing dollars, you can’t do both, go to paid media. I guess concurrently-

Amanda Joyce:

At that point-

Devon Hayes:

SEO and paid. You can be doing CRO on your website and hopefully, you’ve got a team member internally that can work on that or I know our agency, our SEO packages come with CRO, that’s something we actually just naturally do and track and make sure we’re optimizing your conversion rate. So I got lost in my list there but that was 1, 2, 3, and CRO is like a 1A or a 2A and then 3 is paid.

Amanda Joyce:

And then, 3 is paid. Starting out, maximizing those calls from Google local service ads, first and foremost. You’re not going to get it any cheaper and then move into really strategic paid search ads focusing on your brand and then on your highest priority services that you can afford to spend a little bit of money to drive the leads that those will bring in and-

Devon Hayes:

Absolutely.

Amanda Joyce:

There you have it.

Devon Hayes:

Absolutely. There you have it. So this is what we’d tell our dads to do with their contracting business if they were staring down the barrel of a recession and had a conservative marketing budget. We hope that what we’ve revealed today has been helpful for you. As always, reach out with any questions, comments, we’d love to hear from you.

Amanda Joyce:

That was today’s trade secret. Thanks for listening.

Devon Hayes:

Did you find this helpful? We’re just getting started.

Amanda Joyce:

Subscribe and don’t miss our next reveal.

Devon Hayes:

Until next time.