AdWords CPA

 
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Old 04-04-2017, 01:08 PM   #1
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AdWords CPA


For everyone using AdWords for home improvement advertising, what kind of results are you getting? We're a remodeling company, would like to share and compare some metrics and overall performance with others in the same industry. We do kitchen & bathroom remodeling, and countertops (granite & stone).

Just curious what others spend on AdWords, and their CPA (cost per acquisition or cost per lead with AdWords)
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Old 04-04-2017, 03:19 PM   #2
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Re: AdWords CPA


Welcome to CT.

I can't answer as a contractor but I can tell you that any answers by themselves are irrelevant. Market size and competition directly affect cost per click. Good landing pages for targeted terms (and screening out negative keywords) directly affect response rates. Well written paid ads help screen unwanted visitors that burn your money.

Another variable, among many, is if they deem your market lucrative, and Sacramento probably qualifies, you'll be competing against the likes of Home Advisor, Angie's, etc. who have deep pockets and well planned ad strategies. That certainly skews the results compared to other markets.

Not to sound discouraging, I'm just injecting reality and other things to consider when comparing notes. If you have a great strategy and someone else with an ill conceived strategy comes along asserting how much AdWords sucks, you're going to report entirely different results.

Since you're new, get prepared for that last part in discussions of this nature on CT. Many contractors swear a certain method is terrible when it could be their implementation of it. My take is everything works and everything fails. It depends on how you use it and how applicable it is to your situation and business model.

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Old 04-04-2017, 07:06 PM   #3
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Re: AdWords CPA


Great to hear you're tracking CPA - huge mistake I see many contractors making is having no idea of their numbers other than CPC on Adwords.

I run campaigns for a number of home improvement businesses here in Australia.

We typically see CPA range between $30 - $100, but as cbscreative said it can vary dramatically between different markets and locations. That's tracking both phone calls and form submissions (and only the phone calls that actually become a lead).

With well-designed landing pages and good ad copy you should be expecting conversion rates between 8% - 20% for higher value services (like kitchen remodeling).

The biggest exception to that rule is lower value services with more urgency - plumbing and electrical for instance. These often have very high cost per click and are extremely competitive.

Considering many plumbing & electrical jobs are below $1000 (even $500) per customer - you need to be getting conversion rates of above 20% to get ROI. Whether that's possible really depends on the local market - I've seen campaigns with a 50% conversion rate for electricians, but I've also seen well-run campaigns that still struggle to break even.

If you want, I'll make a copy of the calculator I use to forecast ROI for home improvement services in any particular market so you can have a play.
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Old 04-05-2017, 01:31 PM   #4
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Re: AdWords CPA


Since Leon is a new member, welcome to CT.

One thing I would add to his comments that neither of us have pointed out yet is an area that often gets overlooked when evaluating the cost per lead. That is the lifetime value of a customer/client. It's possible to break even on CPA, or even lose money, yet win. That's why you sometimes see cost per click exceed the apparent value of the product or service. Those bidding higher are looking at the long term return.
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Old 04-12-2017, 01:24 PM   #5
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Re: AdWords CPA


Here's a GREAT Benchmarking study from Wordstream on this topic. It shows many industries... but ours is listed as well. Perhaps this will help you...

http://www.wordstream.com/blog/ws/20...try-benchmarks
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Old 04-12-2017, 01:45 PM   #6
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Re: AdWords CPA


Quote:
Originally Posted by PYDamion View Post
Here's a GREAT Benchmarking study from Wordstream on this topic. It shows many industries... but ours is listed as well. Perhaps this will help you...

http://www.wordstream.com/blog/ws/20...try-benchmarks
Thanks for sharing that study PY!
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Old 04-12-2017, 02:46 PM   #7
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Re: AdWords CPA


Would greatly appreciate if you could share the forecast ROI calculator. I am getting a conversion rate of 1.73%. This is strictly for a search campaign called "Countertops". Avg. countertop job is around 8k, and it is a quick sale, unlike full kitchen remodeling. The ad groups are isolated and quality scores seem good.

I still feel like something is wrong, and conversion rate isn't impressive.

Quote:
Originally Posted by Leon.Bennetts View Post
Great to hear you're tracking CPA - huge mistake I see many contractors making is having no idea of their numbers other than CPC on Adwords.

I run campaigns for a number of home improvement businesses here in Australia.

We typically see CPA range between $30 - $100, but as cbscreative said it can vary dramatically between different markets and locations. That's tracking both phone calls and form submissions (and only the phone calls that actually become a lead).

With well-designed landing pages and good ad copy you should be expecting conversion rates between 8% - 20% for higher value services (like kitchen remodeling).

The biggest exception to that rule is lower value services with more urgency - plumbing and electrical for instance. These often have very high cost per click and are extremely competitive.

Considering many plumbing & electrical jobs are below $1000 (even $500) per customer - you need to be getting conversion rates of above 20% to get ROI. Whether that's possible really depends on the local market - I've seen campaigns with a 50% conversion rate for electricians, but I've also seen well-run campaigns that still struggle to break even.

If you want, I'll make a copy of the calculator I use to forecast ROI for home improvement services in any particular market so you can have a play.
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Old 04-12-2017, 09:16 PM   #8
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Re: AdWords CPA


Sure thing - here's the link to the calculator

I put together a video on how to use the calculator, and I also review your current website and note down a number of points that are almost certainly killing your conversions - click here to watch.

Hope this helps - feel free to reach out if you want further help.

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