Value Of Contractor Leads

VALUE OF CONTRACTOR LEADS

A residential contractor invests in a variety of marketing activities to generate new sales. Among these marketing activities is often the purchase of home improvement contractor leads from a third-party provider. It begs the question, What is the value of contractor leads versus these other marketing alternatives?

For the majority of residential contractors, marketing activities should focus on generating new sales opportunities rather than company branding. These sales opportunities (contractor leads) always start with an initial contact with a perspective homeowner. The value of contractor leads, by whatever means generated, can be measured to help determine their return on investment (ROI).


VALUE OF CONTRACTOR LEADS – TRACK & MEASURE

You need to track and measure your marketing activities to determine their return on investment. You may have a “gut feel” for what works to generate new sales for your contracting business. That’s fine.

But the business environment is constantly changing. Home Improvement Helpers recommends that you take some basic steps to track and measure your sales contacts. This will help you make better decisions about where to invest your marketing dollars to get the best ROI for your business. You will also have the data to back up your “gut feel”.

Sales Contacts – Sources

Start with the most basic aspect. What source does your contracting company’s initial sales contacts come from?. Make a list of sources that you will then track and measure. For example:

  • Telephone Inquiry
  • Website Inquiry
  • Email Inquiry
  • Pay Per Advertisement Inquiry
  • Pay Per Contractor Lead
  • Other

Sales Contacts – Origins

The next step is what is the origin of the sales contact? Some will be intuitively obvious, others not so clear. In many instances you will need to ask the contact, “How did you hear about our contracting company?” Again, make a list of the origins that you will then track and measure. For example:

  • Telephone Inquiry – Yellow Pages | Personal Reference | Business Card | Truck Display
  • Website Inquiry – Search Engine | Business Directory | Pay-Per-Click
  • Email Inquiry – Email Promo | Website | Truck Display | Business Card
  • Pay Per Advertisement Inquiry – Local Newspaper | Local Flyer
  • Pay Per Contractor Lead – Which Lead Supplier
  • Other – Neighborhood Canvassing

Sales Contacts – Volume

Now you need to have your company personnel daily track the volume for each sales contact source and origin so that at the end of the month you have some representative data that can be analyzed. Here is a simple example:

SourceOrigin-1Origin-2Origin-3Total
TelephoneYPPersonal RefBiz Card
Count35210
WebsiteSearchBiz DirectPPC
Count1011021
EmailPromoWebsiteDisplay
Count07512
AdsNPFlyersNA
Count0505
P-P-LeadVendor -1Vendor-2NA
Count255030

VALUE OF CONTRACTOR LEADS – COST & BENEFIT

Now it is time to do some analysis where you assign values to the costs and benefits of of your sales contacts. You should use monthly cost averages since your are tracking sales contacts by month.

Sales Contacts – Internal Costs

Assign an internal cost for processing each type of sales lead source. Answering the telephone, reviewing and responding to Email, assigning a Pay-Per-Lead to your sales staff all require the use of your personnel time and resources. This all adds up to your business costs.

Sales Contacts – External Costs

Determine your monthly costs for sales contact sources. Your Website has an initial cost for design and monthly maintenance charges. Your advertisements (online and offline) have monthly fees. Your marketing materials (business cards, brochures, display materials) have their costs as well.

Sales Contacts – Benefits

Your residential contractor benefits are your sales. For each type of sales contact source, what percentage gets converted into a homeowner sales appointment and, of those, what percentage get converted into a sales project?

You should have a standard revenue value for a sales project. If your contracting company does different types of home improvement services, you will have a different standard for each type.

Sales Contacts – Website Benefits

Here is an example of calculating your website investment and ROI:

  • Your website monthly cost is $150. This includes amortization of initial design, hosting and updates, etc.
  • Your website generates four Email inquiries per day. That is 120 per month.
  • Each Email inquiry requires an average of 15 minutes to process (multiple times). Your total personnel costs, with benefits is $16.00//Hour. The personnel cost to process an Email is $4.00.
  • Of your Email inquiries 10% result in a home improvement appointment. (You will receive Email inquiries from vendors, old customers, relatives, etc.)
  • Of your home improvement appointments, 25% are converted into sales.
  • Your average revenue per sale is $4,000.
  • Marketing costs are $630 (Website + Email Processing)
  • Sales revenue is $12,000 (Apts (12) x Converted Sales (25%) x $4,000/Sale)
  • Marketing cost percentage is 5.25% ($630 / $12,000)

Sales Contacts – Pay-Per-Contractor Lead Benefits

Here is an example of calculating your Pay-Per-Contractor Lead investment and ROI:

  • Your Pay-Per-Contractor Lead (PPCL) has an average cost of $30.
  • You purchase 15 PPCL monthly.
  • Of your PPCL 80% result in a home improvement appointment. (These are exclusive, pre-qualified telephone-verified leads. )
  • Of your home improvement appointments, 30% are converted into sales. (Faster response to homeowner inquiry.)
  • Your average revenue per sale is $4,000.
  • Marketing costs are $450 (PPCL purchases)
  • Sales revenue is $16,000 (Apts (12) x Converted Sales (30%) x $4,000/Sale)
  • Marketing cost percentage is 2.82% ($450 / $16,000)

WHY WE ARE DIFFERENT

Home Improvement Helpers has provided residential contractor project leads to national building and construction suppliers for more than five years. They have used these leads as a means to recruit and incentivize contractors to purchase their products.

For them offering home improvement leads has been a good marketing strategy. Their business is selling construction products, not the production of quality home improvement leads.

These leads are passed to multiple contractors over an extended period of time. Consequently, they waste a contractor’s time and resources because they chase homeowner projects that have been picked over, again and again.

We do not sell construction supplies or burned out home improvement leads to multiple contractors. We simply offer high quality, economical telephone-verified sales opportunities to residential contractors.

These telephone-verified sales opportunities provide residential contractors a greater chance of closing business with a homeowner. They complement a residential contractor’s current marketing activities to generate new business.

We believe that our home improvement leads offer a residential contractor the lowest cost, highest return on investment to generate new business.


READY TO GROW YOUR BUSINESS?

Call us at 919-794-8443 or Get Started today.

We understand that your marketing needs are unique to your business. Talk with one of our representatives to see if exclusive, telephone-verified sales opportunities from Home Improvement Helpers are a good fit for your contracting business.