The Three Levels of Contractor Marketing: How to Grow Your Business

As a home improvement contractor, marketing can feel overwhelming, especially as your business grows. Understanding the different stages of contractor businesses and how marketing evolves at each stage can help you develop a strategy that works for your growth goals. We’ll explore the three levels of contractor businesses and the marketing strategies that can help you move from one stage to the next.

What Are the Three Levels of Contractor Businesses?

As we help contractors grow, we often categorize them into three levels based on their size, resources, and operations. Each level presents unique marketing challenges and opportunities.

Level 1: The One-Person Show

At Level 1, you’re essentially a one-person show. You’re managing estimates, performing the work, handling the labor, and staying up late managing the paperwork. Marketing at this stage is often reactive and pieced together through word of mouth, referrals, and sporadic efforts like pay-per-lead platforms.

• Word of Mouth Referrals: At this stage, many contractors rely heavily on word-of-mouth referrals. You’ve built a small but loyal customer base, and they’re spreading the word to family, friends, and neighbors.
• Pay-per-Lead Platforms: You might use services like Angie or Thumbtack to generate leads, but these platforms come with limitations as you can only handle so many leads at a time.

However, the problem at this stage is that there’s no cohesive strategy, and your marketing efforts are scattered. You’re often relying on friends or family to manage your social media or website, which isn’t scalable for future growth.

Level 2: Breaking Out with a Team

Level 2 is where you begin to break away from the one-person show and build a small team to support your business. You might have office staff, a production manager, or even an outside salesperson. Marketing at this stage becomes more structured, but there’s still a wide range of approaches.

• Multiple Lead Sources: As your business grows, so do your marketing efforts. You start adding multiple lead sources, such as SEO, PPC campaigns, or radio ads.
• Internal Marketing Coordination: Many Level 2 contractors bring in an internal marketing coordinator to manage their marketing efforts. This person is responsible for coordinating with various external vendors and ensuring that your campaigns are aligned with your business goals.

But here’s the key: In Level 2, you begin to shift away from relying on pieced-together tactics and start developing a comprehensive marketing strategy. This stage is crucial for creating a foundation that will allow your business to scale effectively.

How to Move from Level 1 to Level 2

Transitioning from Level 1 to Level 2 requires a mindset shift. At Level 1, you’re focused on immediate marketing results, and every dollar you spend needs to result in a lead. But to grow, you need to start thinking bigger and invest in strategies that will support long-term business growth.

Build a Scalable Strategy

A major shift that occurs in Level 2 is the move from random acts of marketing to a scalable strategy. You need to think beyond just word-of-mouth referrals and lead aggregators like Angie. This is where digital marketing becomes a more critical part of your marketing mix. You’ll want to invest in:

• Website Development: Ensure your website is a powerful tool for lead generation and accurately represents your brand.
• Lead Nurturing: Start building systems like email marketing or CRM management that allow you to stay in contact with leads who may not be ready to buy today but could be future customers.

Expand Your Marketing Channels

At Level 2, you’ll want to expand your marketing mix. This might mean incorporating SEO, PPC, and social media marketing into your strategy. You’ll also want to consider traditional marketing channels, such as radio or TV ads, as part of your broader campaign. These channels provide visibility and help build awareness within your community.

Level 3: Scaling with Comprehensive Marketing

At Level 3, your business is fully scaled. You may have multiple locations, a dedicated sales team, and a full-blown marketing department. Marketing at this stage is much more strategic, and you need to focus on both brand awareness and lead generation.

Understanding the Marketing Funnel

One of the key differences between Level 2 and Level 3 contractors is how they view leads. At Level 3, you recognize that not all leads are ready to buy today, but they may be in the future. That’s why you need to focus on nurturing leads at all stages of the marketing funnel.

• Top-of-Funnel Leads: These leads are just starting their research. They’re not ready to make a purchase but could become customers down the road. Level 3 contractors use strategies like brand awareness campaigns to capture and nurture these leads.
• Mid-Funnel Leads: These leads are further along in the buying journey. At this stage, they may be comparing you to competitors. Strong content marketing and nurturing tactics, such as email or text message follow-ups, help keep them engaged.
• Bottom-of-Funnel Leads: These are the leads who are ready to buy today. At this stage, your PPC campaigns and sales teams play a crucial role in converting them into customers.

Investing in Brand Awareness

At Level 3, brand awareness becomes an essential part of your marketing strategy. You may be running TV ads, sponsoring local events, or participating in community outreach. The goal is to build trust with your audience long before they are ready to buy. Level 3 contractors understand that their business needs to be top of mind when potential customers are ready to make a purchasing decision.

How to Level Up Your Contractor Business

To successfully move through the levels of contractor marketing, you need a strategy tailored to your current business size and growth goals. At FatCat Strategies, we help home improvement contractors develop and execute customized digital marketing plans to scale their businesses.