In this episode of Owned and Operated, John Wilson is joined once again by Ethan Wright from Service Scalers to answer a big question: what would you do with a million-dollar marketing budget?
Together, they unpack how $1M breaks down between demand capture (LSAs, PPC, SEO, lead partners) and demand generation (TV, radio, social, branding) — and why the first priority is always the lead. John and Ethan talk about beating proven channels until they’re maxed, why operators get in trouble by spreading budgets too thin, and how the fastest-growing companies scale one or two channels to $100k+ a month.
You’ll also hear their frameworks for deciding budget allocation, the hidden crossover between capture and brand, and the real numbers John looks at daily to keep the board full. Whether you’re running $2M or $20M, this conversation shows how the principles of lead generation never change — only the scale does.
💼 Extra Special Thanks to Service Scalers!
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🎙️ Host
John Wilson → https://x.com/wilsoncompanies
🎙️ Guest
Ethan Wright → https://www.linkedin.com/in/ethanwrighttx/
OAO 241 Transcript
John Wilson: [00:00:00] The people that I know that are growing the fastest over the past two or three years are running one to two channels up to like a hundred grand a month.
Ethan Wright: The people who are scaling beat the horse till it's dead. If you have a few things that work really well, how can I double and triple down on them?
Mainly through things that are actually actively getting you leads today.
John Wilson: The very first thing always is the lead. Nothing else can happen in the entire rest of the business without the lead. It's like a car without gas. Yeah.
Ethan Wright: The number one job I still have is lead generation.
John Wilson: Welcome back to Owned and Operated. I'm your host, John Wilson. I run a $30 million home service company in Ohio. Today on the show I have Ethan Wright from Service Scalers. Service. Scalers is a digital marketing agency focused on home service growth. Today we're talking about how we would spend a million dollars on advertising.
If you've been listening to the show for a while, you know that we've been big fans of service scalers. One of the things that they just dropped that we are really excited about is a pay lead program. So what they [00:01:00] help you do is they help you directly gain access to leads and scale up your lead partner program.
Go to service scalers.com and say, we sent you, someone gave you a million dollars. It's a lot of money. It's a lot of money. Million dollars, $83,333 and 33 cents a month. You've thought about this. Everyone's thought about this.
Ethan Wright: Yeah. Uh, first thing would go buy a blimp. Yeah. For my company. Yeah, yeah, yeah.
That we were talking about. I
John Wilson: mean, pure brand. Yeah. You know, just all that
Ethan Wright: would totally work, right? Yes, a hundred percent. Yeah. Just fly it over over Dallas all day. Yeah. No, it's interesting and I'm excited to hear your thoughts on it. Yeah. Because, um, I think some companies would say, you gave me a million dollars for marketing.
Yeah. I spend. $10,000 a month on marketing that like, is a very big difference. Yeah. For you, I think maybe you've probably thought about it a little more and have, um, some interesting takes, but my, my initial reaction to it Yeah. For most companies [00:02:00] is what has been working for you. Mm-hmm. And do more of it, right?
Yeah. Um, I think maybe people's initial reaction would be, I need to go and buy, uh, like get a big branded. Billboard or you know Yeah. Do all these things that we aren't doing yet. Yes. Um, my opinion, and I'd be interested to hear what you would say, but if you have a few things that work really well mm-hmm.
How can I double and triple down on them? Um, mainly through things that are actually actively getting you leads today. Um, but I'd be interested, you know, in your position mm-hmm. With where your business is. Like if you've thought about this or if you literally got that check, what would you do?
John Wilson: Yeah. Yeah.
I think, well, the quick profile on like who would spend a million dollars, uh, so usual rule of thumb is like 10% at the top. Yeah. Now some people break it, so maybe like if, if it's a well capitalized person, maybe they're coming at like 12%. Yeah. And so it's a $8 million [00:03:00] business. Yep. Or. More realistically, six to 8%.
That's what most larger companies including us spend, we spend six to 8% we have for years. Um, so that's like what, $14 million? Yeah. 12, 14. Yeah. So, so that's the, that's the size of a business we're talking about here. Uh, 8 million to $14 million would, would be spending 80 grand a month on marketing. Um, and I totally agree with you.
Like, I think, you know, we're entering the planning season, the, a sort of budget, depending on someone's budget practice, but like the budgeting season for next year. Yeah. And we're thinking about, oh man, you know, how do we grow how, you know, we're entrepreneurs, how do we keep moving and doing the next thing?
And, um. I think spread is the first thing that people tend to do where, uh, and we've done this too, like I'm super guilty of it. We're like, all right, yeah. I'm planning next year's marketing budget. I've got this 50 page or 50 line item. Excel sheet. Yeah. And we're gonna do radio and we're gonna do SEO and we're gonna,
Ethan Wright: we've never done field marketing
John Wilson: hiring.[00:04:00]
Yeah, yeah, yeah. So what. Would help is for a framework is regardless of the size of budget, like a million bucks is a lot. We're talking about eight to 14. That's like 4% of the industry. Yeah. So most of the industry doesn't even qualify for this conversation, but like this can go down anywhere you go. It can also go up anywhere you go.
Yeah. But what percentage of your budget are you spending on demand creation, which is TV, radio? Billboards. The blimp. The blimp, you know, the blimp that we're gonna buy because we just got a million bucks. I wonder how much of bli, like it has to be tens of millions of dollars. Oh, for sure. Like, there's like 10 of them.
I don't even know if you could, I don't even know if I can buy it. That one could even fly it. Yeah. Yeah. I, I don't even know. So yeah, demand cr uh, demand creation or generation is, is like the branding efforts, uh, that you're putting out there, you know, TV boxes, sponsoring a little league team, putting stuff in your church bulletin.
Yeah. Uh, and then what is demand capture? So LSAs. PPC lead partners, [00:05:00] um, how are we capturing people that are in the market to buy your goods or services? Actively searching.
Ethan Wright: Actively searching. Raise their hand. I need your service. I'm coming. I'm
John Wilson: seeking a, I'm seeking someone to do this. Yeah. So demand capture.
So, uh, people have different rules for like, how they think about this, and some companies really do well with like a 50 50 split. Mm-hmm. Uh, some companies do really well with a 90 10 split. In either direction. Yeah. Uh, so I think you just have like, like you said, what was working before this. Mm-hmm. So first principles, is my board full today?
Ethan Wright: Yep.
John Wilson: Is my board full tomorrow? Is my board full the next day? Like, are we taking care of today and the current and urgent, you know, thing. Yeah. If our board, if our board's not full like today, tomorrow, then like. We gotta be focusing on leads. Yep. We gotta be focusing on the lead, uh, capture, uh, side of the funnel.
And maybe that means 80 or 90% of your budget goes there. If you are just like totally good to [00:06:00] go and you're trying to figure out how to add, you know, more leads in a year from now, demand generation starts to make a lot more sense.
Ethan Wright: Yeah. It's interesting talking to you yesterday. You know, you said even at the stage of our business, the size of our business mm-hmm.
Uh, you, you're like, the number one job I still have
John Wilson: mm-hmm.
Ethan Wright: Is lead generation.
John Wilson: Yeah.
Ethan Wright: Um, now obviously you're not actively doing it, but like if that part of my business is not dialed in, is not focused on, yeah. You know, you said marketing is a contact sport and so like you have to be in it.
John Wilson: Yeah.
Ethan Wright: If that part isn't fixed, nothing else matters.
Great sales process. Mm-hmm. Best tech, you know, Hey, we've got great wraps on all the trucks. Well the trucks. Going out to jobs. Yeah. It doesn't really matter. Um, and so, yeah, when you're thinking of a business in that eight to, you know, $14 million range, but even if you know you're a smaller business and someone said, Hey, I'm writing you a check for a million dollars over the next year.
Mm-hmm. I think specifically maybe smaller businesses that think towards that, [00:07:00] then go, oh, then I can start. Then I don't have to think about my lead partner. Yeah. Or like PPC and LSA as much 'cause I've like made it. Yeah. And you're hitting sitting here and you go. No, that's still the number one thing I'm thinking about.
Yeah.
John Wilson: And, and for perspective, we spend two and a half million dollars. Yeah. Yeah. So we're, and we're still Yeah. Lead like leads zip. Yeah. You know, it's, uh, the, you, we talk about knowing your numbers. Like what's your average ticket, what's your closing rate, what's your booking rate? And literally none of that matters if you don't have the leads.
Like, it doesn't matter what your closing rate is on sales. If there's no potential appointments to convert into sales. Yeah. Yeah. So the, the very first thing always is the lead. Nothing else can happen. Yeah. In the entire rest of the business without, without the lead. It's like a car without gas. Yeah.
Ethan Wright: And then even if your bored is full.
Yeah. Well then it's a question of like, okay, I, I still want to grow. Yeah. That's an opportunity to hire. But then again, yeah. [00:08:00] Now I need to fill. A different board, a larger board with more leads. So it, it's interesting because I do have this conversation, have this conversation as people scale. Mm-hmm. And, um, I do think the perspective when you're early on is, Hey, when I get there, it'll look a lot different.
Yeah. But then as people grow, they realize like, it's, it's not, it's the same machine, it's the same, it's taking the same gas. Yeah. Now you
John Wilson: Well, it's the same allocation. Yes. And like, we'll break out exactly, but like, our allocation is a 75 25. Between, uh, like lead capture, lead capture, lead generation. Yeah.
Now it used to be as high as, uh, like 85, 15. Yeah. And just this year we, we eased it up 10%. A little bit more demand creation. But, uh, yeah, I mean for like, I'm notorious for saying like, run that thing till it's dry. Like we ran LSAs till 80, 90, a hundred grand a month. Yeah. And that was 85% of our budget.
Like, we just ran it, we got leads and that was it. We didn't think much about diversifying. Yeah.
Ethan Wright: And, and what's [00:09:00] interesting too is on the demand capture side of things mm-hmm. Um, there is some natural, um. It naturally somewhat plays into the like brand awareness side as well. Yeah. Because you get in someone's home, you have their contact, so you can remark, sell a membership.
Sell a membership. Yeah. Uh, you've got this, there's the sticker on the unit. Yeah. Um, again, they're in your database. They, they leave you a Google review that then boosts your, your presence and, you know, um. Your GBP is still, you know, still demand capture. Yeah. But, uh, your brand is like still growing through that and so, um, it naturally does somewhat play into that.
Mm-hmm. Um, and so, like you said, there's a lot of different percentages or ratios that people have and work well for different people, but the vast majority of time there's still this much heavier allocation towards, um. How am I gonna fill the board and continue to fill it as I hire, as I look to scale?
Yeah. Um, and so, yeah, like you [00:10:00] mentioned, local service ads, pay per click, um, are obviously like two of the obvious paid ones. Mm-hmm. Investing in your SEO, both for your Google Business profile and for like on page your website. Mm-hmm. Um, that's obviously great because the more that your scales can tip towards organic
John Wilson: mm-hmm.
Ethan Wright: The better, um, because then you're paying eventually less for leads or. You get to continue paying the same for leads and you just see your total lead bucket grow. Yeah.
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Ethan Wright: and I think you were saying that. You know, on, on average, you're hoping right now, like when you're talking about a day-to-day leads, it's what, 50 50 from paid and organic at, at this point?
Yeah. Yeah.
John Wilson: Well, it depends on the team, so, okay. Uh, like plumbing is 35% of our leads are bought. Okay. Uh, HVAC is like 5% electric's, 50 or 60%. Gotcha. Uh, drains is. 40, 50. Yeah. So it depends on the team. Like HVAC is almost all organic. We basically don't advertise for HVAC at all. Uh, it's kind of, it seems pointless.
You know? This is like gonna sound ridiculous, but it seems pointless to advertise for hvac. Um, like that's the point of 'cause you're showing up and Well, that's the point of memberships. But like, if, like, if I a, [00:12:00] if I'm advertising for hvac, I'm either gonna blow a hundred percent of the budget in the day 'cause it's 95 degrees or no one's looking for the service at all.
'cause it's 50. Yeah. So like. It. Yeah. It's kind of odd. Yeah.
Ethan Wright: Yeah. And I mean, and it definitely helps when you have, um, oror organic presence there too. Mm-hmm. Because when people are searching for it, like they are finding you, um, it can be a little different if you feel, you know, buried or whatever. Beneath, yeah.
Beneath competitors. Yeah.
John Wilson: We market for, uh, sales leads
Ethan Wright: Yes.
John Wilson: For the cas, but for service. Like we don't see any value in marketing at. Yeah.
Ethan Wright: And so, yeah, you've got. What you're like direct advertising, um, but then also like, you know, the aggregator partners you have mm-hmm. Or the, the lead partners you have.
Yeah. Um, a lot of people, I think this is also common. Mm-hmm. Um, a lot of people when they start mm-hmm. They rely so heavily on the, on these lead partners, the Angie Thumbtack, you know, modernize, whatever it might be. Yeah. And. You know, it's speed, the lead, it's like, be the best and, and get there and like win the business and it's more competitive.
And so they go, gosh, I can't wait for the day. Mm-hmm. [00:13:00] That I never use them again. Yeah. And usually you people do hit a point where, okay, finally I can do my own PPC or LSA. They're way less of consideration. But then it's funny, I mean,
John Wilson: Tommy Melo talks about how he's using Angie's. I know. It's like leads are, leads are leads.
Exactly. Like this
Ethan Wright: is it. This is the game. And it and it, and it becomes like as you start to max out the channels that you like early on dreamed of, I can't wait till I get my own leads from these channels. You're like, well, crap, I need more leads. Yeah, yeah. And where can you find them?
John Wilson: Yeah.
Ethan Wright: Those lead partners.
Yeah. And again, it's like managing the expectations there of like. How often do we win 'em? How often do they close? Yeah. Things like that. But, um, it's, it's just always funny because, you know. Yeah.
John Wilson: Well I remember seeing that. I remember saying that. Yes. Like, oh, we don't need this anymore. Yeah. And like, here I am twice the size as when I said that you used it.
Yeah. And I'm like, I'm using the hell outta these things. Yeah,
Ethan Wright: yeah. Yeah. And that, you know, we at the workshop that, that we were just doing. Yeah. People were surprised to hear that. Yeah. And a lot of people who are like, I feel like I just escaped. Yeah. Yeah. You know, personal hell that I felt like I was in.
Yes. Yeah. Yeah. Now it's, it's, [00:14:00] it's way different when your business is not solely providing on them. Yeah. And when it's like, okay, now I'm supplementing their part of the strategy mm-hmm. You know, maybe I turn, turn 'em on an office mm-hmm. As needed. Um, but that like lead capture is still such a big allocation of most people's budgets.
Yeah. Now again, you hear about some businesses that scale to a decent size. Yeah. And it's. They just own a, they own a suburb, they own a, they own a neighborhood. And it's all through branding. They, they, mm-hmm. You know, they sponsor all the little league teams. They've got, uh, you know, at the high school football stadium, they've got their sign up at the local church, like they're in the bulletin or the whatever.
It's just way harder to actually expand out. Yes. With that type of, um, allocation, typically. Yeah. Now there's always people who break the mold or whatever. Mm-hmm. But for most people listening, um. Whether you're currently like at that million dollar budget or you're aspiring to one day, I can't wait till I have a million dollars a year to spend.
Mm-hmm. Um,
John Wilson: I was really excited for 2 million and I was super disappointed when we got here. [00:15:00] And you're like, because I was like, I, I remember thinking, I was like, oh my God, we're gonna be doing sports teams. Yeah. We're gonna be doing, and it's like, no, we're buying leads. We're just buying more. Yeah. We're buying a lot more leads.
Yeah.
Ethan Wright: But it makes, it makes sense. It's, it's, um. Dance with a girl that brought you here, like mm-hmm. There comes a time where you add things that you didn't before, but still like the majority of growth was, has been driven through this channel. Yeah. And until it is proven that it does not,
John Wilson: yeah.
Ethan Wright: Why would I all of a sudden make some massive change?
Yeah. So I think it's just a good perspective. Yeah. Setting conversation for people that are aspiring to hit that budget one day of, um, Hey, the place I'm in right now is actually not. It's not bad, it's not inherently bad that I'm spending so much on mm-hmm. Lead generation constantly. Uh, because as you scale, that's a way to continue to scale.
Yeah. You can start to look at it differently. You can add different things, but again, it's al it was, it's so eyeopening to hear you at the spot you're going, or at the spot you're at. Mm-hmm. [00:16:00] And you're like, yeah, as the president, as the owner of this company, like. Number one thing I usually am focusing on is making sure that we get leads.
Mm-hmm. Everything else takes care of itself at this point. Like it built the processes of whatever else.
John Wilson: Yeah. If the board's full, the system works and that's, if the board's not full, the system doesn't work. Yep. Exactly. You should, let's, let's break down that million. Okay. So on a million bucks, let's say like 70 is demand capture.
Yeah. 30 is, uh, demand generation. Yeah. So we've got 700,000 to play with. To me, that's like pretty straightforward. Yeah. We're gonna be doing. I'd say fundamentals. So LSA, maybe some PPC in there. Yeah. Depending on your market things. Uh, reviews. SEO Yeah. Like to me, that's how I would imagine that demand, yeah.
Uh, capture.
Ethan Wright: Yeah. Yeah. And then maybe again, depending on markets
John Wilson: mm-hmm.
Ethan Wright: Supplementing with the different lead partners and, and, and whatnot in there too. But I see. I honest, like, maybe I,
John Wilson: maybe
Ethan Wright: Yeah.
John Wilson: Uh, you know, we. [00:17:00] The people that I know that are growing the fastest over the past two or three years are running one to two channels up to like a hundred grand a month.
Ethan Wright: Really? That makes Yeah.
John Wilson: Oh yeah. Yeah. Like, hey, if PPC works, like I have a friend in Chicago, PPC, like LSA, stopped working for them the way it worked for us. Yep. Great. No problem. They ran PPC up to $90,000 a month. Yeah. They've since backed down a little bit. Yeah. And they've added a little bit of other stuff in there.
Yeah. But I think it's still 60.
Ethan Wright: Well, and, and that's actually. You know, the interesting conversation of like the allocation within the allocation mm-hmm. Is on the paid side of what that spend, that 70% goes to paid. Mm-hmm. Um, what you're saying is, is what we see where, um, there's, there's still somewhat of a mix, but like the majority of that someone's obliged at budget.
Yeah, yeah. It goes with the big
John Wilson: winner.
Ethan Wright: Exactly. Yeah. Because it wins. Yeah. Like there are some markets where. Um, you know, you hear it's like PPC doesn't work here, it never works here. Great. Well there's another channel. Something else works, but markets where it works really well and people get it dialed in.
Yeah. And [00:18:00] um, and, and, and that's where the majority of their budget goes. And so that's obviously industry location dependent. Yeah. But the principle still looks the same. The people who are scaling. Beat the horse till it's dead. Yes. They find the right channel of, of paid ads and go for it. Yeah. Um, and then, yeah, the, the obviously having, um, a healthy budget for, for SEO.
Mm-hmm. Um, you know, again, organically, they're great. They're, they vetted you more, they're more likely to close, they're more likely to use your service. They're less likely to shop around. Yeah. Yeah. At a
John Wilson: million bucks. We gotta be investing in the website. We gotta be investing in gmb, like in a, in a big way.
Big. Yeah. Like, to me that should be like. You know, 40,000 a year. Like it, it should be a lot. We said this a couple episodes ago, but we spend 4,000 to 8,000 a month right now on our GMBs. Like that's a lot of freaking money. Yes. Uh, I don't even know what we spend on SEO every month. Yeah. But we get $300,000 a month of attributed sales through our website.
So like it matters. Yep. And it works. And like over the past 10 years, that number just keeps going and going and going. So Yeah. Worth the investment. Big [00:19:00] demand capture.
Ethan Wright: Yep.
John Wilson: On the demand generation. So that's gonna be like, uh, radio. Tv, billboards, uh, some social,
Ethan Wright: yeah. Facebook ads can kind of fit in there.
Yeah. Yeah.
John Wilson: Like my quick take, uh, TV is the cheapest way to reach the largest amount of people, like still is. Really easy fact to Google. Yeah. Uh, so like at 20 grand a month, 25 grand a month, like, yeah. Tv, you make it dent. What's kind of fun about TV is you can find out what your competitors are paying.
So TV and radio, it's public data. You can find out who the big spenders are and. Almost exactly what they're spending. So 25,000 a month. In some markets you might be the largest spender in that market. Yeah. On tv. And it might not even be close. Yeah. Uh, most of our competitors are spending six to 8,000 a month on tv.
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John Wilson: So even if we came in at 15, like you're double Yeah, we'd be double, yeah. Double the placements. So, uh, yeah, I mean 20, 25 grand would go really far, um, on tv. And then, yeah, I don't really recommend billboards except, unless it's like paired with TV or like a really big broad strategy radio.
I think Tony said this, uh, at the workshop, but like, radio's great for recruitment. We're [00:21:00] probably gonna have to change how we think about radio. Yeah. 'cause I do think that's like totally right. Yeah. Um, and then social. If you can do social really well, it's really unique. It's really creative. Yep. If you're doing something different, pop, pop off.
Yeah. That's what, go for it. That's, and you can spend all 20 grand on that if you're doing something amazing. If you're posting like, Hey, we can clean your furnace today, the winter freeze. It's on its way. Yeah. Nobody gives a shit. I don't, I don't give a shit. Yeah. Yeah. And when I see that on our own socials, I'm like, all right.
Like I don't even, I wouldn't even click on this.
Ethan Wright: And even, and even at that point, um. Usually when people are in you, we talked about this yesterday. It's either, yeah, invest in social, just enough to keep it alive. Yeah, keep it slightly active. Yeah. It's like, okay, that's where it is. Like just kind
John Wilson: of, or develop an in-house content studio.
Exactly. And which, that's what we did. Like, that's two full-time people. We have a long video producer. We have a short video producer. But that's a big investment. Yes.
Ethan Wright: It's a big investment. Yeah, for sure. Um, another one that, uh, I mean [00:22:00] at this, at this size, you've got some sort of marketing manager, marketing team Yeah.
And things like that. But another thing that we see, um, people do really well is if you have a really good strategy around Facebook groups mm-hmm. As well. Yes. Um, that's almost like this hybrid between like Facebook ads and organic gorilla marketing, but like having. Um, you know, most people, most businesses in a Facebook group just kind of go, um, hey, buy, buy now.
Mm-hmm. Like 50% off buy now. But what we see is some people do a really good job of like telling their story. Yeah. Um, uh, yes, like ingraining themself in the, in the community that, uh, that can go a long way. And so, um, that's just another like, awesome way that a lot of people aren't actually attacking, um, the, the branding side as well.
So, um, but as a whole, that million dollar budget, like. It looks a, it looks really similar. So boring. Yeah, so boring to what you were, it's
John Wilson: really similar to when it was 200,000. It's just more, yep. It's just more, yeah. We're gonna buy more leads. We're gonna put more into our demand generation. It's just more Yep.
If people wanna get ahold of [00:23:00] you, how can they find you?
Ethan Wright: Yeah. We are, uh, at service scalers.com. Um, or you can find us on x, uh, LinkedIn at the same, uh, just service scalers. Awesome. Make sure you like and sub.
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