Our Year End Results With All The Online Lead Sources

handyhands

Well,...as much as I'm just as guilty of complaining about the online lead services as the rest of you, and at times find myself disgusted with the vast majority of them, we compiled our year end numbers recently and I thought I'd share the results with you. Below, you'll see each of the services my company utilizes, and the net sales generated from each source.

Quinstreet=$10,407.00
United Home Improvement=$85,723.00
Service Magic=$69,384.00
Reliable Remodeler=$106,511.00
Wcv Leads=$38,898.00
My Free Estimates=$25,574.00

Total Net business generated from online lead service providers=$336,497

Again, there's times that I feel like personally strangling some of the account reps that I talk with from several of these providers, especially when i get a rash of leads that I can A. never get a hold of, no matter the time of day or evening I try calling, and B. no matter how many times I email these people, they never email me back.

A couple of these services are decent for the most part about issuing "credits", but bottom line. You're going to get some crap leads. Either way, at the price these people are getting per lead, you must be dilligent when working them.

rbsremodeling

What did the cost of the leads run


did you spend 5k to get 300k worth of work?? More?? less?? just curious.

__________________

handyhands

I'm still compiling numbers, but I know we aim to be under 10% and definitly were the last year.

At this rate, I have to say we spent well over $5,000.

More like $20k.

Still worthwhile in my book.

Just my 2 cents.

tinner666

You don't show the straight website leads.

__________________
Frank Slate Roof Repairs, Richmond, Va.

handyhands

Home Shows=$357,526.00

Website=$92,929.00

Canvassing (done for one day)=$15,971.00

Previous Customers=$115,014.00

Referrals=$66,863.00

Phone Book=$20,000.00

rbsremodeling

I'd say your right. That is what I have seen as the average 10%. I just think the money could be better spent. But some guys like yourself do well with the lead service I know another remodeler here in MD that kills with them, I just never got it to work for me.

__________________

handyhands

I know I could be alot more precise in regards to how many leads were bought, how many converted to leads,...how many were confirmed/ issued, etc.

All I wanted to do was to show that in fact as much as we all trash these services,..and more than likely I'll trash them again tomorrow,...that in fact as long as they keep providing a decent ROI it actually does provide to be a valuable source of business.

In no means am I trying to make enemies on here,..I in fact think this is by far the best contractor forum on the web, and have got tons of useful information I have personally implemented in my business. I was just curious if other companies are having similiar results.

tinner666

Just website and referrals here. Around $100K. It's all I want though.

__________________
Frank Slate Roof Repairs, Richmond, Va.

rbsremodeling

I think for the larger companies it will work. The average remodeler working in the field, doing paper work, the follow up and volume needed will kill them.

It is gonna be hard for the average Joe to make the numbers work.

Alot of the handyman do really well with them locally for the obvious reasons

__________________

handyhands

I personally think the average Joe could Kill with these lead services, but unfortunately for the average Joe working out of the back of his pick-up, I honestly don't think they have the bank-roll to purchase the amount of leads from these internet providers it takes to accumulate a decent roi.

We find ourselves selling QUALITY. When we go into a house, we tend to sell ourselves 1st, then the rest should come a little easier.

But to be honest, I have personally felt that in a day and age when alot of homeowners are shopping price as opposed to quality, the average Joe should be doing pretty well, and be giving the "bigger dogs" who rely soley on name recognition and overpriced products a good run for their money.

Mike Finley

Number Lie.

Okay having said that, let me explain. There are some assumptions being made and they may be viable or wrong. When you post those numbers the assumption is there is no differences between the profits generated, the costs associated outside of just the lead fee of all of those jobs, there is also the opportunity costs of every job you do.

If you do everything as you state in your profile then you know better than anybody that there are types of jobs you do that generate more profit then others.

So those numbers are interesting but they don't tell the whole story other than you company spent money, did jobs that were billed at those gross sales figures.

For me, I drill way down on those numbers and discover a lot more about my business and the leads that come in.

What I would do is categorize all the different work you do, then figure out the profits generated by each of those categories. That's the first step. Then I would begin attaching the individual leads that generated each of those jobs to the profit and start figuring out some things.

There is a lot more to it then just per lead cost per source, there is the profit of each lead. I mean why generate 85K worth of business United Home Improvements if the work you sell from those leads is generating 20% less profit then the 68K from service magic? Just an example.

Also I hope it's obvious that all customers are not created equal. Depending on what you do a customer gained from SM may not be equal in future profit to your company then a customer gained through some place else.

You might say, well hell Mike what difference does it make? Well, your business has a capacity of work that it can do, there are only so many working hours per year to fill. So it can start to matter what customers are filling those limited hours, the opportunity costs of filling an hour with a less then profitable type customer or a customer with a small upside in referrals or future business, or a toxic customer (the worst).

I could go into this for hours, and I hope if you are a business doing some volume that these are concerns of you too.

My point is though that just because you did 1 million in sales generated by a lead generator no matter what it is, it doesn't mean that much until you drill down and really analyze what the short term and long term results and true costs are of accepting that business generated from that lead service.

This is no different then what you commonly hear from contractors who say, when I downsized from a 20 man operation to a 2 man operation I enjoyed what I was doing much more and I actually made more take home money. That's the same thing to consider when it comes to sales. You can do a lot of volume and spin your wheels in the process. Analyzing all of this ensures you that you aren't.

handyhands

I wasn't posting that information to initiate any sort of pissing contest or to misinform any of the credible people that use this site as a resource tool.

You point out alot of valid information indeed, and you're exactly right in mentioning the fact that some jobs are MUCH more profitable than others. But that is something we as contractors learned a long time ago.

The only arguement I'll make to respond is that are we as busy as we'd like to be? Never. We love what we do, and always wish we could do more of it.

I unfortunately can't rely on the hopes that every job is going to net me $20,000 in profit.

Have I crunched the numbers to realize I paid myfreeestimates.com about TWICE AS MUCH for leads than I paid United home improvement, only to reap $25k in sales from them as opposed to $85k with United Home Improvement? Sure.

Bottom line, Mike-there's alot of variables. You know this, I know this. But the realization is you can't bank on the thought you're going to get a guaranteed number of leads from ANY of these services. We take the ones we want, and work them to the best of our efforts.

I at this rate would not shiiit-can each and every lead service to only invest all that money spent into buying boatloads of keywords and doing the pay per click thing to do nothing but keep my fingers crossed in hopes I'll get a return.

What I can do, and will continue to do is utilize each and every source out there that has proven to me will generate enough return on investment to keep my employees paid,....My lights on, gas in the trucks and of course make an overall decent profit on. I'm always about trying new things, and will continue to do so in efforts to tap all avenues/ sources until I run out of ideas.

handyhands

website leads=$92,929.00

We do blogs, articles, etc. and have excellent ranking with msn, yahoo and google.

Gotta love this site with all the useful information.

Mike Finley

Not trying to start a pissing match, not my intention at all. Just stating what I stated as a comment to the numbers.

I thank you for sharing those numbers. But I also hope because I'm pretty sure your point was is that you are doing some analysis right now, that's where those numbers came from I am guessing and you are saying - Hey, we did X amount of business from these lousy lead services, so crap, no matter how you hate them... we still did X amount of business from these lead services.

All I'm saying is yep, you did, and it's a great 1st step in the process to compile those numbers. However, if it's me-- that's just the 1st step, cause those number seem like one thing, but I know there is more information in them waiting to be devulged. Marketing ROI is the goal to really understand what those numbers really mean to your business. Those numbers are the base numbers in the first step to getting to ROI, they aren't actually your ROI numbers.

If you're in the process of taking those intial numbers to the next step then awesome and I hope you post the results cause that will be some kick ass useful information and be very revealing. If you're stopping at just those numbers, then like I said in my first reply, they are nice, but they don't mean a whole hell of alot other than you company did a volume of sales and sales volume isn't all that revealing, it's only a gross number.

Just so everyone understands - have you ever had a salesman selling you on an advertising method and he says what's your average job? What's your average profit per job? Okay so if you get 6 jobs in a year from my service you break even.

Have you ever been told that? It's a HUGE F&*KING, and I mean HUGE miss direction. Nobody who knows what the hell they are doing measures marketing return based on gross profit per job and how many jobs you need to do to pay for a advertising medium. You should be taking your percentage of marketing budget be it 10% of gross sales, or any number you use and then working backwards off the cost of that marketing product they are trying to sell you and work the ROI backwards and I guarantee you, using his theory you won't be coming up with 6 jobs makes his service worth while, it will be more like 30-40. However that's the bullsh*t way that numbers are used falsely.

If anybody understands the last 2 paragraphs you should understand my 1st reply to this thread.

MEL

I found that my close ratio was lower for those types of leads that’s why I quit using them.

If you factor in the value of your time you’ll find that the ROI goes way down.

Time is a limited resource, if you spend more of it chasing leads that won’t turn into business you’ll make less profit per year.

__________________
MEL

handyhands

Actually, I was wrong when guessing My company was at 10%.

After calculating all monies spent on combined internet lead generating companies, we are actually at 4.68%.

Total invested in online lead providers=$15,172.00
Total Volume Net Sales=$324,324.00


Not bad, all things considered.

Kenny K

good numbers!!

__________________
Replacement Windows and Vinyl Siding by Illinois Remodeling Company

Brock

How many salesmen did it take to work all these leads and what is their pay structure if you will.

Also, thats about 1200 a month. We spend more than that on other avenues and have tried R/R and R/E but with about 1 out of 20 leads being legit. I got to tell you your numbers are very hard to believe and I am very skeptical.

Thanks...


...

Vinny

Its off subject a little, but I just wanted to agree stongly with what Mike said here. That line is said by so many marketing / advertising sales people that it infuriates the crap out of me. Just this past week I had to correct a sales person for what will be a 4th yellow page book in my market.

I think i will make it a policy to toss out any advertising sales person that suggests it will only take 3 or 4 jobs to cover the cost of thier advertising. If they cant take the time to educate themselves about the cost of doing buisness, then they dont deserve my advertising dollars

__________________
Roccies Asphalt Paving
The Right Way Driveway Company
If you say you cant, your a loser. If you say you wont, your a quiter. Which one do you want to be?

Mike Finley

Doesn't that just infuriate you when they try that crap?

Last week I had some radio station out here calling me, wanting me to trade a remodel job for some DJ at the station for radio advertising and he would endorse our company personally.

When I explained to him that he wasn't offering me anything of value he was incredulous at how great an opportunity this was. I finally had to spell it out for him. If I for example only charged him for the materials and broke even, lets say I gave up $5000 of profit and you are going to give me a $5000 credit for radio ads, what the hell is the difference if I just charged him full price and then paid you the $5000 for your ads???????

I told him give me a 10 to 1 dollar amount for your ads. In other words we will do $5000 worth of free work for you DJ and give me $50,000 in radio time. He stuttered a few times before he finally was trying to get off the phone with me.

Where are they educating these people?

Oh, by the way they also wanted to charge us for the production of the ad and they had some 'minimal' other charges on top of the free exchange.

I've met only a couple of decent advertisers in all these years. I signed up with one a few months ago cause he offered me a money back guarantee, he cut the rate of our first 6 months by a tiered proportion starting at 50% off the first month and going up 10% each month until we are at full price. He has checked in with us every month to see how we are doing and is always ready to have out ads tweaked.

His product is working and making us money. We are going to continue to advertise with him because his product works. All the other idiots out there are trying to get you to sign a 12 month contract. WTF? It's advertising, your God Damn product is instantly measureable if it works! If your product works the phone rings! If somebody is getting their phone to ring they are going to continue to use your product.