HCI we were discussing this in another topic and I am glad yous tarted this one. I did not mean to come off abrasive, but alas it's one of my flaws, I always come off abrasive.
I agree with you word of mouth is the best form of advertising because the sale is pretty much in the bag. Your former customer has already sold the referral on your quality/value whatever. I have found word of mouth is not enough to carry a medium sized company however. First off you have to find a few jobs somewhere just to get started. Let's say you have one crew... Just to keep that one crew busy you need 100% referral rate. That means every past customer needs to referr you to at least one person, and you need to sell 100% of your estimates to stay busy. That's not likley to happen.
While referral estimates are always top priority in our company we need to pad the schedule with new recruits, so to speak. These new recruits come in through various means. I know many people that have had great success with mailers, the key with sending out mailers is consistency and timing. As with all marketing you have to know your audience. There's no use broadcasting your message to people that can't buy your service.
I think job site signs are a must for every job. Another great cheap marketing tool is signs on your truck, don't forget the all important backs of your truck. The back gets more exposure than the sides.
There are online lead services which allow you to pick and choose through your leads and buy only the ones you like. These services make up the bulk of our estimates. The key is to being the early bird. I am serious when I say if a lead came in 3 hours ago I won;t pay it a second thought. It's pretty much already in the bag, for someone else.
For us yellow pages didn;t pay off. They just messed up our bottom line. I think it is important to have a small add in all the areas you service because some people, especially elderly, will use the yellow pages as a tool to refrence your legitimateability (is that even a word?). Also sometimes people forget your number but remember your name. Heck sometimes they forget your name but remember your logo or slogan... They may end up looking in the yellow pages for you. If your not there, at least a very small tiny add, they won't be able to call you
It's very important in today's world to have a web site (If you need one ask Nathan to help ya out). I have our website listed on all our business cards, brochures, letter head etc... We get alot of leads through our website, and you can market your site effectively on the cheap. Not only that, but a website lends to your image of legitimacy. It allows customers to learn about who you are before wasting your time to ask the frequent questions they all ask, that are nothing more than a waste of time.
What else? There are so many ways to advertise, the key is to focus on various areas that fit your target market. Also focus on a few types of advertising. Don't spend little ammounts all over. Focus your menoy on what and where works.
Check these links for prior conversations:
http://www.contractortalk.com/showthread.php?t=428
http://www.contractortalk.com/showthread.php?t=426
http://www.contractortalk.com/showthread.php?t=206
Many companies use the 10% budgeting as a rule of thumb. They spend 10% of their revenue on advertising. I think 10% is the bare minimum tp be spent.