A Study of Conversion Rates for 20 Service Industries
by Diane Lovine
As a Google Premier Partner that specializes in generating local leads for contractors nationwide, we’ve been keenly observing the changes that have been taking place with PPC marketing. We have monitored changes in the effectiveness of running Google Ads Campaigns to generate leads. Over the past couple of years, we have seen unprecedented fluctuations in levels of success. Some businesses are reporting banner years and others have shuttered for good.
Pricing Increases Have Sidelined Some Businesses
Several factors have contributed to recent pricing surges for PPC advertising on Google. Increased online competition and inflation are the two main culprits.
Over the past two years, the market has become flooded with contractors willing and needing to get themselves found on the first page of Google. The importance of being seen is critical. The result of this influx of new businesses paying for Ads is steeper competition than ever, which is driving prices up. Many contractors are feeling the effects of the increased cost of doing business using Google Ads. Newer businesses that are not yet established find it even more daunting to get the cost-effective leads necessary to acquire their first customers.
However, Google Ads is still one of the most effective growth strategies available. The findings in a March 2022 study found that Google Ads was still a less expensive marketing option than Facebook and Linkedin. When done well, Google Ads still produces a solid ROI for service contractors.
Industry-specific data collected during the first five months of 2022 corroborate these findings and will be presented below.
Measuring Conversion Rate Results
Why do we use conversion rates as a measure of success with Google Ads? Pricing per lead for a given industry varies greatly by region, level of competition, consumer demand, and many other factors.
Knowing what a contractor pays per lead only gives a small piece of the picture. In order to understand if a lead was a good value, you’d also need to know how much he or she paid for that lead. To get that number, you’d need to know the number of clicks that occurred and out of those clicks, the number of phone calls or forms filled out. That’s the conversion rate. Read more on why conversion rate matters.
To sum it up, the two main reasons for knowing your conversion rate matter are that you need this information in order to understand your return on marketing investment. You also need to know the conversion rate that your marketing company is delivering and compare that to others to make sure you’re getting the most out of your Ads management budget. Not all online marketing companies are the same, and the ones that can deliver the highest conversion rates for your campaigns are getting you the best value (high lead volume for low prices).
Google Ads PPC Conversion Rate Analysis
The Team at 99 Calls collected and analyzed data from 20 of its top-performing industries on the Google Ads PPC program. Over 125,000 clicks and 28,000 leads were analyzed by industry.
Professions With the Worst (Lowest) Conversion Rates with PPC
The good news is that even the industries that use 99 Calls for Ads management that got the lowest conversion rates (HVAC and Restoration) were still seeing conversion rates of 10% and 12% respectively. Cost per lead came in at and below industry averages ($182 and $280 respectively). For the water damage restoration industry, contractors often pay $250 to $500 per exclusive damage lead. It is our experience that HVAC, Water Damage Restoration, General Contractor, and Commercial Cleaning industries see the most formidable competition online, and consequently demonstrate lower conversion rates than other industries.
How Did this Compare With Average Conversion Rates for Ads?
The team found it inspiring that those industries that garnered the lowest conversion rates on our program are still racking in leads at price per lead lower than the industry averages and with conversion rates much higher than industry averages. According to an article by popupsmart.com, the national average conversion rate for all PPC campaigns is just 2.35%. Just looking at Google’s Search network and not Display Ads, which tend to have much lower conversion rates, the average conversion rate increases to 4.4% according to Wordstream and Unbounce.
These companies recommend aiming for 10% or higher to get a “good” conversion rate. So if the “worst” results are converting above the average, which are the best converting industries on Google Ads?
Which Industries Get the Best Conversion Rates Using Google Ads?
The 99 Calls team collected click and conversion rate data for its 20 top industries managed using Google Ads campaigns. The chart below shows data for each of the 20 industries.
Leading the pack with conversion rates were Appliance Repair (31%), Moving Services (31%), Carpet Cleaning (27%), and Pressure Washing (27%). Conversion rates this high bring in solid ROI for businesses because higher conversion rates translate into lower costs per lead. The respective price per lead received from each of the four top performers above were $18, $40, $34, and $34 per lead.
Are Google Ads a Good Investment?
Although the competition on Google to be shown at the top of searches has increased dramatically over the past 18 months which has driven up the price per click, we have found that the advertising service contractor business on Google Ads is still an excellent value.
Of course, results vary widely among online marketing companies. Some charge high monthly fees and some cut into your budget by taking money off the top to cover their services. Some charge a flat monthly service fee, often a percentage of the budget. For example, 99 Calls provides Google Ads management services for $150 or 15% of the total monthly budget. Be sure to shop around and find the best value for your business. If a company can’t tell you their average conversion rates or give clear expectations, keep looking!