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How much should a staffing firm spend on marketing?

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In preparation for our recent Lunch with Haley webinar on Lead Generation for Staffing Firms, I came across an interesting blog post from Staffing Industry Analysts: Selling in the Age of VMS (you may need to register to view this link).  The blog post was about the rapid growth of Vendor Management Systems and the impact on staffing sales, but buried in the article was this amazing, and somewhat frightening statistic:

“Our benchmarking data indicates staffing firms typically spend just 0.6% of revenue on marketing and advertising, only a third of what they spend even on rent.” 

The blog post continued to provide the following advice:

“And it shows–at least if worker brand recognition means anything.  Our survey data indicates that among a sample of mostly contingent workers, more thought Robert Half to be a fictional brand than a real one, and 56% thought Aerotek to be either a machine tool manufacturer or a software developer; even well-known Manpower was perceived by 17% to be either a construction company or a machine-tool manufacturer.  Occasional staffing buyers are not likely to know much more about staffing firms than occasional contingent workers would.  For anyone selling to the smaller buyer, a little more advertising might be justified.”

Pretty scary stuff, isn’t it? Candidates and smaller employers can’t even identify some of the biggest names in the industry, yet few staffing firms are doing anything to make a name for themselves. Well, it’s not scary at all…it’s actually an amazing opportunity for those firms willing to shift a little of their capital from traditional direct selling to marketing.

So how much should you spend on marketing?

While there is no right answer, and with margins as tight as they currently are, I would not recommend throwing out your current budget in favor of a massive investment in marketing, but a budget of as low as 1% of sales can deliver a significant impact in the following areas:

  • Improving sales call to appointment ratios
  • Improving conversion percentages
  • Reaching higher level staffing decision makers to sell more strategic solutions
  • Increasing (dramatically) the number of inbound sales leads
  • Providing sales people with “ammunition” for more effective calls
  • Reducing recruiting costs
  • Reducing sales costs as a percent of total sales

Your challenge is to have the courage to allocate more than the average staffing firm to marketing, and then determine how to best use the investment to reach the decision makers you want to target. The first part is up to you. And for the second part, here are a few resources to help you plan your marketing:

  1. Marketing Best Practices Guide
  2. Articles on marketing strategy and tactics for your staffing firm 
  3. More articles about how to market your staffing firm

Good luck, and if you need more hekp, please call us at 1.888.696.2900.

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