Our Year End Results With All The Online Lead Sources

Vinny

Amen brother

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If you say you cant, your a loser. If you say you wont, your a quiter. Which one do you want to be?

handyhands

Just got into the office, but I figured I'd do my best to answer you.

We're not a huge company by any means. We have one window salesman, one salesman that covers our siding and roofing leads, and one salesman that handles our sunroom leads.

Some months sure, we spend $1200 on SOLEY internet leads. Have we spent more, or spent less? Yes to both. It's hard to determine how many leads we're going to receive from these companies per month.

We don't have a telemarketing department. I am the only person who handles our marketing, with that including (but not limited to) calling and emailing these internet leads in hopes of introducing our company and our services in hopes of scheduling the estimate. I handle all of our direct mailings/ target mailings. I work every home show my company does, again doing my best to represent my company in a proffessional manner.
(In fact, we just did our 1st home show this past weekend, and I have to say it was "so far" a success, and much exceeded my own expectations. I handed out tons of literature, brochures, business cards and although in a time when people are leary of giving phone numbers and personal information, was able to walk out of there with 40 names and numbers, and out of those 40 names and numbers, 18 of them were estimates I set at the show itself.)

The numbers from my last post in regards to the year end internet numbers are spot on. I'm not on here to B.S., because I value my time much more than that and don't care to waste anyones time with falsified information. I was merely stating what was working for us, and maybe in some sort of way trying to justify sticking it out with some of these internet lead companies because in fact we were able to get a decent ROI from the internet leads. Just in fact got 3 more internet leads over the weekend, and just got off the phone and scheduled a sunroom estimate with a woman who sounds legitimately interested. If, and that's a BIG if, we close the deal?--Could be at least a $20,000-$30,000 deal. Total spent on the combined 3 leads I was sent was maybe $150.00.

Long story short, I posted what I did to simply share some information/ insight. Im not here to debate rocket science, or to say mine's bigger than yours.

What I am here to do is to obtain some useful information from the vast amount of knowledge I know some in here possess, and to see if I may be able to apply that in my own manner to help my business succeed.

All the best-

Mike Finley

Like I said, if you really want to see what is going on with those leads, take it to the next level and track the real ROI. Track the closing ratios, the gross sale and the gross profit of all of those leads and then you have a real picture of what is going on.

Start right now with your show leads. Add up all the show costs, the rentals the booths, the giveways your salary, set up take down, printing costs. That's your cost. Then track the estimates vs leads, track the sales, track the profit per lead.

You might find shows to be very expensive in their ROI. They might cost you $300 a raw lead vs $100 a raw lead of your other methods or vice versa, they might turn out to be the least expensive. But then you might find out they return a 20% larger profit margin. Cost more per lead but return bigger profit per job... means shows are a good way to go. Or you could find out they cost about the same or less then a normal lead, but the profits are lower, you don't know until you run the numbers.

If you've never taken it to that level before I will eat my hat if you don't discover something very eye opening

Went round and round with a Val Pak sales person at the end of last week. She was practically begging to give away advertising in them. I would't advertise in them if they paid us. She couldn't believe it. She subscribes to the moronic notion that a lead is a lead is a lead. Uh huh.

All leads are not created equal. In this world there are no limits to how you can spend your time and money getting leads. It's never a question of I can't find anything to spend our marketing dollars on. It's always a question of which ones should we spend our money on.

My marketing costs for last year 2.8%. I don't think anybody could deny that's a pretty lean marketing cost. We got there by doing the above.

handyhands

I perfectly understand your point, Mike--

But is that to say...

Because perhaps it's costing me less to pay for an internet lead, I shouldn't do home shows?

I can't guarantee how many internet leads I'm going to receive=Ever.

I can't guarantee what kind of results I'm going to obtain from a home show, however I know I won't get ANY results from not doing them.

Does that make sense?

Sorry, but I'm not going to be picky on where I get my business from.

Mike Finley

You should. But most of us don't understand it.

Your business has a capacity. For 2009 you have a projected capacity give or take a %. It doesn't matter what it is, but it isn't 1 job for the year and it's not 100,000 jobs for the year. There is a number that is your capacity. You can move it up or down a percentage over the course of the year, but you have a number.

That number dictates your gross sales and your gross sales will dictate your profit based upon the individual jobs you take on.

You can effect your profitability only in a few ways - cutting expenses, increasing gross sales, increasing profit margin.

Most people understand easily cutting expenses. Most people easily understand increasing gross sales.

Most people don't understand the relationship of gross sales / capacity / profit margin, which dictates how much you can increase gross sales.

Increasing profit margin is the easiest, yet least applied method of increasing profits.

Your leads dictate profit margin.

According to your own figures your company did close to 1,000,000 in gross sales, you said something about your marketing costs of lead generating companies was 4.8% before you thought it was 10% (that's kind of scary to be off by 100% if you're in charge of this) but anyways. That's a good start to at least know that percentage.

My marketing cost were 2.8%. How would your company like to have an additional 2% in profit? That's $20,000 free dollars? (and that's just by working out the lead numbers and getting better at marketing expendetures. That doesn't even touch the cause effect of increasing your companies profit margin which if it only changed 5% would be $50,000) That's not a bad chunk of change for spending a few hours analyzing lead sources and redirecting marketing dollars. Not bad.

I won't beat a dead horse anymore, I give you credit for at least knowing the numbers you posted here. That puts you ahead of most companies already.

Jason-Delta

Hello. I am new to the site and was checking it out and this thread is one of the subjects that fascinates me. I am in the small business catagory (<$500,000 gross sales) and the expense of marketing is always an issue. We were doing well with our referral chains until mid 2008 (recession?). Now we have started exploring more aggressive advertising methods. We tried Reliable Remodeler with no real return. Service Magic has been somewhat succesful with an average job cost of around 8.5%. Based on other people's experience is that what we should expect as the average (5-12%) cost of doing business with internet lead generators? Maybe I was spoiled before when I was spending considerably less due to a high referral rate.

MazalBuild

Roughly how many people do you have in your business operation?

HomerJ

This is a key component of the equation that I'd like to understand.

It sounds like you classify the expense to purchase the leads as an advertising expense.

But, what is your overall selling cost for your business?

Is there a way for you to breakdown your selling cost for internet leads vs. other lead sources?

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zookies

We use kudzu and angies list. They not only get us leads, but they send us web site traffic, and with the feedback they allow us to concentrate on making the customer happy. However, they run us much more than 10k a year for leads.

windycitypeter

HI

I'm an electrician in chicago. I am on angies list but dont buy any of thier advertising. Do you use thier advertising? How do you think it works? And what is the other service you use?

Curious to know more.

peter

MyLar1040

In reading this post it seems that the main component in making money from online lead sources seems to be diligence. Making sure you call the homeowners right away and staying on top of getting back to them etc. as well as staying on top of the lead companies for credits when you are due them. Which brings me to another point, how do you get credits for "bad leads" people that do no answer, won't call back, don't show for appts etc. The lead co I use won't credit for that because it's in their terms not to. Any suggestions on how I can raise my ROI by getting more credits that I feel I am entitiled to? I try to explain this to the lead co but they just don't seem to see it my way. I have gotten credit for other leads that were bad from them like renters, do it yourselfers etc. I just can't seem to be able to convince them that if I don't get a chance to meet or even speak to the homeowner it is not a lead.

WestCoastVinyl

I like that do your diligence's when it comes to any type of leads that is generated. Direct mail, online, newspaper, home improvement shows, etc...
No magic bullet here, U gotta work those leads. I know it sounds like i'm just repeating, but bottom line is and you can ask any successful contractors out there. They work those leads to get results!