Branch marketing budget maths for heating companies

The four numbers you need per branch

You need four numbers for each branch before you can set a sensible budget. Most heating companies already have them in their field-service software or accounting system; they just haven't been split by location.

1. Average gross profit per booked job. Revenue minus parts, equipment and direct labour, averaged over the year.
2. Booked jobs from marketing. Jobs where the customer first reached you through a marketing source, not repeat customers or maintenance renewals.
3. Marketing spend. Everything spent to generate those jobs: ads, agency fees, listings, print and that branch's share of shared costs.
4. Month. Heating demand is seasonal, so each number should be monthly.

If you can't get number 2 by branch, stop and fix that first. Our call routing and reporting service exists for exactly this.

The core formula

Cost per booked job = marketing spend ÷ booked jobs from marketing.

Then compare it to the gross profit per job. The ratio tells you how much of each job's profit goes to winning it.

Marketing share of gross profit = cost per booked job ÷ gross profit per job.

That share is the number to manage. A branch at 12% has room to spend more. A branch at 45% is paying almost half its profit to win work and needs a closer look before anyone raises its budget.

Three branches, side by side

Here is an illustrative heating company with three branches, looking at one October.

Read across, and three different stories appear.

• Branch A is efficient. It could likely take more spend in the busy months without its share climbing much. Starving it to subsidise the others would be a mistake.
• Branch B is in a normal range but worth watching. A 26% share leaves less room; check its answer rate and its location page before spending more.
• Branch C looks alarming at 83%, but it is new. Judge it against launch targets, not mature-branch numbers (see below).

At company level, the same month shows $22,500 spent, 86 jobs and about $262 per job, around 26% of the weighted average gross profit. Nothing in that total tells you that A is under-funded and C is still in launch.

Setting next month's budget

Work backwards from the jobs each branch needs.

Budget = target booked jobs from marketing × target cost per booked job.

Take Branch A in November. Gross profit per job is $1,050. The owner is comfortable at 20%, so the target cost per job is $210. The branch wants 60 marketing-sourced jobs in November, so the budget is 60 × $210 = $12,600. If it was at $173 per job in October, the target leaves room for higher click prices in a cold snap.

For Branch B, at $950 gross profit and the same 20%, the target cost is $190, below its October actual of $250. Raising its budget won't fix that. The right move is to find why its cost per job is high first: missed calls, a weak page, overlapping service areas with Branch A, or simply a harder market.

Seasonality

Heating demand is not flat, and budgets shouldn't be either. A practical approach is to set each branch's monthly job target from last year's booked jobs by month, then apply the target cost per job to each month.

The exact months vary across Canada. A branch on the BC coast and a branch on the Prairies don't have the same winter, so each branch's calendar should come from its own history. Our areas pages note the climate pattern for each region.

Shared costs: pick a rule and keep it

Some marketing costs belong to the whole company: the website platform, brand design, the CRM, brand-name search ads, and head-office staff time. These need to be split across branches before cost per booked job means anything.

Three common rules:

1. By booked jobs from marketing. Fair when branches do similar work. Our usual suggestion.
2. By revenue. Better when one branch does much larger jobs.
3. Evenly. Simple, but unfair to a small new branch.

Say shared costs are $6,000 a month and you split by booked jobs. With 52, 24 and 10 jobs (86 total), Branch A carries 60% ($3,628), B 28% ($1,674) and C 12% ($698). Add those to each branch's direct spend before calculating cost per job. Write the rule down, share it with managers before the month starts, and keep it for at least a year.

New branches: separate targets for year one

A new branch has fixed costs from day one and no reviews, no organic visibility and no repeat customers. Its cost per booked job will be high at first. Judge it against a launch curve, not against mature branches.

An example launch curve, to adapt:

• Months 1–3: target is first booked jobs and a working phone and profile. Cost per job is not yet meaningful.
• Months 4–6: cost per job falling month on month.
• Months 7–12: cost per job within reach of 1.5× the company's mature-branch target.
• Year 2: judged like any other branch.

If a new branch is still far off the curve after six months, look at the basics before cutting it: profile and page, answer rate and service-area overlap. Our new branch service covers the launch order.

The monthly branch marketing statement

Put all of this on one page per branch, every month:

1. Spend: direct, plus allocated shared costs
2. Booked jobs from marketing, by source
3. Cost per booked job and marketing share of gross profit
4. Against plan: target jobs and target cost
5. One sentence: what changes next month and why

A statement that every manager can read in two minutes does more than a dashboard nobody opens. For more on job-value maths, HVACProfit.ca goes further into cost per booked job.

Common mistakes

• Setting budgets as a flat percentage of company revenue
• Mixing maintenance renewals into marketing jobs
• Moving shared costs between branches to make a manager look good
• Cutting a new branch's budget in month three
• Raising a struggling branch's budget before checking its answer rate

HeatingConsultants.ca is a marketing and business consulting service, not a heating contractor or an accounting firm. If you want help building the model, see our branch budgets service or the contact page.