To run a business is to take risks. Marketing is also about taking risks. That’s how you gain a competitive edge when competitors stand still. Sometimes risk is about rolling the dice, but more often it’s about calculating opportunity and investment – and making smart choices you can stand behind.

In the marketing realm, taking risks runs the gamut, ranging from:

Targeting new markets – Contractors generally serve a geographical area. You’re not likely heading 300 miles up the road to service a homeowner’s equipment. As you expand into different zip codes with your direct mail campaigns, you broaden opportunity, yet you’ve also got to make sure you’ve got the operational structure to serve the leads you bring in.

Launching new services – In some cases, added services are a packaging of what you already do. A maintenance agreement, for example, formalizes your tune-up services in a relationship that keeps you returning to the home. Similarly, inspection services for electrical safety, indoor air and water waste are marketing opportunities. The risks clearly get larger, however, when HVAC contractors add plumbing divisions and the like.

Pricing your services – As a general rule, it’s better to price for value instead of fighting to be the low-price leader. Low prices can get leads that you lose money as you serve, and price-shoppers are not known for their loyalty.

Risking your reputation – Poor customer service, for example, can damage your image, costing you in customer retention, referrals and word of mouth. Even service vehicles in traffic represent your brand.

Creating your messaging – Marketing is partly art and partly science, and your creative efforts will be seen through a multitude of perspectives. This could be especially important to remember in social media posts that share humor. Stay tasteful even if light-hearted. Remember you are always reflecting your image.

Reacting to changing demand – Don’t be the typewriter repairmen of the contractor trades. If you’re not offering upgrades that include smart features, for example, you’ll be left behind.

Budgeting your media – This is perhaps the most common and visible form of risk because it’s a matter of tying dollars to sensible steps throughout your year. Creating a marketing plan is a risk-taking venture that weighs investment and opportunity in the creation of a strategy. That level of risk, however, is not “one size fits all.” It’s a personal decision. Or a personality decision, rather.

Three budgeting styles are based on whether you have a conservative, moderate or aggressive marketing investment preference. The conservative investment mindset should spend 3.5-5% of projected sales. (It’s possible that conservative spenders don’t want to spend “anything.” Yet it’s hard to get compounded returns when the investment level is zero.) Those with moderate preference shoot for 5-7% of projected sales, whereas, for the aggressive marketer, 7-10% of projected sales would be the right ballpark.

The plan itself should be guided with these questions:

  • Who are you trying to reach? (Your target market)
  • What message do they need to understand? (Your messaging strategy)
  • How do you want to reach them? (Your media selections)
  • How often do you plan to reach them? (Your promotion frequency)
  • How much to invest to reach the goal? (Your monetary amounts)