It’s Not Just About Getting Leads. It’s About Getting Paid
If you're spending money on ads (Google, Facebook, LSA, whatever) you should expect those dollars to turn into revenue. That’s the whole point.
But too many contractors either:
- Don’t know what their return on ad spend (ROAS) actually is, or
- Accept mediocre results because they don’t know what “good” looks like
Let’s fix that. This article breaks down what a strong ROAS looks like for home service businesses, how to calculate it, and how to improve it if your numbers don’t measure up.
1. What Is ROAS (Return on Ad Spend)?
ROAS is simple: it’s the amount of revenue generated for every dollar you spend on advertising.
Formula:
ROAS = Revenue from Ad Campaign ÷ Cost of Ad Campaign
Example:
You spend $2,000 on ads. Those ads generate $10,000 in booked jobs.
Your ROAS is 5x (or 500%).
It’s one of the clearest ways to measure whether your advertising is profitable.
2. What’s a “Good” ROAS in Home Services?
There’s no perfect number, but here’s a general benchmark for service businesses:
- 3x ROAS = Breakeven to basic profit
This means you’re generating 3x what you spend—enough to cover costs and keep cash flowing, especially for repeat services. - 4–6x ROAS = Solid
This range suggests your campaigns are healthy and efficient, with room to scale or reinvest. - 7x+ ROAS = Excellent
These campaigns are dialed in—great targeting, strong landing pages, high close rate.
That said, the “right” ROAS depends on your margins. If you run a low-overhead HVAC business with $600 average tickets, a 4x ROAS might be fantastic. But if you’re doing handyman work with $150 tickets, you’ll need a higher return to stay profitable.
3. Gross Revenue vs. Net Profit. Know What You’re Measuring
ROAS is usually based on revenue, not profit. That’s okay—but don’t confuse the two.
- $10,000 in revenue might sound great…
- But if your cost of goods sold is $6,000, and your ad spend was $2,000…
- Your net profit from that campaign is closer to $2,000—or a 1x profit return
That’s why ROAS is a good directional metric, but it should be viewed in context.
Always ask: Is the revenue I’m generating enough to cover my ad spend, service costs, and still leave room for profit?
4. Don’t Forget the Lifetime Value (LTV) of a Customer
One reason contractors underinvest in ads? They forget that a good customer doesn’t just hire you once.
Let’s say:
- You spend $120 to acquire a new HVAC maintenance customer
- That customer brings in $250 this year…
- …but also books a $5,000 system install next spring
Now your true ROAS isn’t just 2x—it’s over 40x.
This is especially important in recurring service businesses: plumbing, HVAC, pest control, cleaning, etc. Think long-term.
5. How to Improve Your ROAS
If your ad campaigns aren’t delivering strong returns, don’t just throw more money at them. Tweak your system. ROAS is driven by four parts:
- Targeting – Are your ads showing to the right people in the right locations?
- Ad copy – Does it match what people are actually searching for?
- Landing pages – Are you sending clicks to cluttered homepages or clear service pages?
- Follow-up – Are you answering the phones and closing the leads?
Small changes in these areas can significantly raise your return.
Ads Should Make You Money. Not Make You Nervous
If you’re not sure whether your ads are working, you’re not alone. But guessing is expensive.
A strong ROAS gives you confidence. It tells you when to scale, when to pause, and where to invest. When it’s weak, it’s a signal, not a sentence. Dig in, adjust, and improve.
If you know your numbers (and know what to look for) your ads become an engine, not a gamble.
