Marketing Survey - Cost Per Lead/Source/Win Rates

Grumpy

I was very skeptical about 4 years ago when we were using traditional lead sources. Yellow pages and newspapers. I've told you this story before, but here goes again. One day I was sitting in the office staring at my boss and he staring at me. "I said to myself I gotta get me some leads or this guy is gonna fire me." There was nothing to do the phone was NOT ringing for days.

I took it upon myself to experiment with some lead sources at that time to get some leads. I signed up with respond.com and one other that I soon fired. The result of that experiment is that within a couple months we had signed up with about 5 lead services and were so busy we raised our prices about 15%.

Also I worked for a company that spends about 100k, at that time (probably mroe now) in yellow page advertising. I spoke with each and every one of the customers because I was the scheduler who scheduled all the jobs in production. I also spoke with many many of the incoming inquaries because I helped answering the phones and I know that we got customers of all types form the yellow pages.

The whole point to that story: I am not speaking from a one sided experience of ONLY using online lead services. I am speaking from a well rounded background in leads from various sources traditional and alternative.

I use the alternative online lead sources because that's where I experience the best ROI. When we were using yellow page and newspapers our cost per sale was somewhere at $250. I haven't done the math for myself this year, but last year it had dropped to something like $110 per sale... and selling at higher prices than previously.

While I do agre various lead sources produce a specific type of customer... I am disagreeing with your statement that the internet shoppers are primarily price shoppers. While that may have been your persona experience, and I can respect you for basing your opinions on your experience, that has not been my experience.

Mike Finley

Good info grumpy, but don't create more out of what I said than I did. I am not under the impression that Internet shoppers are all price shoppers, I will just quote myself

an "unusaul percentage" could be 5%, 10% or 15% not all of them or the majority of them. Just a percentage that seems higher than what you see in some other forms of marketing, and not just yellow pages. I'm still going to repeat myself that you are typical of contractors heavily using online leads, you said yourself that your only other marketing experiences are 4 years old and consisted almost entirely of yellow pages advertising.

Regardless, don't take my observations as a slant against your methods of generating business, you obviously have a good grasp on making the most of your investment using online leads. Comments in regard to other contractors or online leads in general are not comments directed towards you personally or reflect on your success or failure at what you are doing, so you don't have to defend your methods. It is only an observation based on the reality that not all leads are created equally, where they are generated from has a bearing on they type of customer you end up dealing with.

Your discussion in regard to ROI and such is not related to what I was saying since I would say those rates can be effected greater by the specific marketing itself - a good yellow pages ad vs a bad one, where as the ROI on an internet lead is totally different, you aren't paying for views of the ad, only the resultant inquires and what you do with them afterwards. When you say your cost per sale was closer to $250 using newspapers there is a possiblity that a better ad could cut that rate in half. Your closing rates wouldn't change but the cost of getting the lead would. Its not apples to apples. With online leads you have no control over the click thru so to speak that service magic generates and only your closing ratio.

Which brings me all the way back to what I was saying that online leads are appealing because they are easy to generate, you simply pay for them, but you have little control over your ROI other than the leads service generating quality leads and your closing ratio. Traditional marketing you have much greater control over ROI because doubling the effectiveness of an advertisement will cut your per customer cost in half, while your closing ratio stays the same. Since the majority of contractors aren't great marketing people online leads services have appeal since what is considered the hard work is taken care of for you.

If you are one of the few who actually consider the differences in lead quality and have taken the time to look at it I commend you because you are one of the few, and some of your success can surely be attributed to the fact that you are willing to go beyond the normal contractor. Keep up the good work.

Grumpy

Hey putting lead services aside, who else uses online yellow pages?

www.superpages.com www.smartpages.com There are a few more too. I'm planning to drop a pretty penny on these next year starting February.

Teetorbilt

Sorry Grumpy, never been there or plan to go there.