Turns out the cost per lead varies widely depending on the effectiveness of the marketing company you hire to run your campaigns.
Utilizing Google Ads PPC campaigns is the fastest, most versatile method of achieving a high volume of leads for service contractors. However, buyer beware; not all PPC marketing firms produce equal results. In fact, differences in performance are alarming and could mean the difference between enjoying a robust return on investment and blowing your advertising budget with little to show for it.
There is an enormous gap between average and superior Ads performance. According to a recent article by Wordstream, a trusted authority in measuring PPC conversion results, a full 25% of PPC users report conversion rates under 1%.
Unlike SEO, or organic lead generation, which takes many months to ramp up and achieve first-page placement on Google searches (and let’s be honest, if you aren’t being found on the first page, you most likely will not be found), using Google Ads PPC to generate exclusive leads yields much faster results.
Google PPC is an auction-style platform for showcasing businesses on the first page of searches. Rather than showing in the maps (GMB) section, or the highly regarded organic results section, Google PPC ads are displayed at the very top and the very bottom of the search page.
Ads are about scarcity. There is only room for 3-6 PPC ads on a page, about half posted at the very top and half at the bottom, under organic results. In order to achieve first-page placement on Google, you’ve got to be one of the top bidders. A high conversion rate is achieved when a large percentage of people who click on an Ad call for a quote (a lead). The more leads you receive for your monthly budget, the better your return on investment.
With Google Ads, contractors are bidding per click, meaning, they are telling Google what they are willing to pay each time a potential buyer clicks on their Ad. The goal is to pay the lowest Cost Per Click, or CPC that you can but high enough to make it into a top 3 position, at least for a decent percentage of the time. Google doesn’t place 3 companies there and then walk away. The top 3 are rotated throughout the day. What gets companies up there? First and foremost is being a top bidder.
Achieving visibility on a search is just one piece to the puzzle though. Equally as important are your click-through rates (CTR) and your conversion rates. Click-through rates are the percentage of times someone clicks on the link in your Ad to visit the landing page compared to the number of times your Ad is shown (aka impressions). If the Ad is compelling and relevant to what the person is looking for, the click-through rate will be higher. If your CTR is low, you will likely also have a low conversion rate.
And finally, let’s talk about conversion rates. A conversion for some industries may be the collection of information (email or phone number) from a potential buyer that can be added to a telemarketing or email nurturing list. In service contractor industries, a conversion is a lead. Better, with 99 Calls, it is an exclusive lead that is delivered either through a live phone call or email. The better your conversion rate, the more leads you will receive for your monthly budget or advertising investment.
Average Conversion Rate and Why it Matters
The average conversion rate for service contractors using Google Search PPC advertising is 2.35%. This means that out of every 100 customers who click on your Ads, only two to three will actually call you for a quote.
The worst-performing (bottom 25%) campaigns receive a 1% or lower conversion rate. One in four campaigns falls into this bottom category. In fact, nearly half of all people who use Google Ads have a conversion rate lower than 2.5%. Included in these numbers are the do-it-yourselfers who don’t think it’s worth paying the service fee to have a marketing team manage their accounts.
Imagine that your monthly Ads budget is $1000. If the average click for your industry costs $5.00, at a 2.35% conversion rate, you’d get 4-5 leads with your budget if you hire an average marketing company.
The best performing marketing businesses, those in the top 10% of all companies, are averaging an 11.45% conversion rate. If you were using one of them to manage your Ads campaign and had the same $1000 budget and click cost at $5.00 each, you’d achieve 23 leads. That’s over 5x the lead volume for your marketing dollars! That’s why conversion rate matters.
How to Maximize Your Conversion Rate
There is a bright side to Google Ads marketing. People and businesses in the know are able to achieve excellent results with PPC advertising. The best performing marketing businesses, those in the top 10% of all companies, achieve an 11.45% conversion rate. This is far better than the average performer with 5x the lead volume for the same budget.
A small study looked at 124 customers using Google Ads campaigns managed through 99 Calls with a monthly budget of more than $300. The Google Ads specialists at 99 Calls were able to use their in-house PPC advertising system to achieve an average conversion rate across all service contractor (restoration contractors, carpet cleaners, painters, landscapers, appliance repair technicians, electricians, plumbers, HVAC, etc.) industries of 20.43%. Using the same scenario above, these contractors would have achieved 40 leads per $1000 budget, 10x the average PPC customer.
With the increases in online competition, SEO alone often isn’t enough anymore for a growing service business. Many service contractors have turned to PPC advertising to increase their customer base and their revenue. However, with the huge discrepancy between top-performing PPC management firms and low performers, it’s no wonder that many companies have become frustrated with PPC. They have lost trust in Google Ads. They complain that they have burned through their budgets too quickly without results. When every dollar counts, it is crucial that contractors find a top 10% company to handle their Ads campaign. Using a trusted, experienced Google Partner to manage an Ads campaign can literally make the difference between getting one lead for every 100 clicks on your Ads or 20 or more!
Established in 2010, 99 Calls entered the lead generation business one decade ago. During its first few years in business, online competition was considerably lower. When new customers signed up for services, after the onboarding process was completed, contractors began receiving leads within days after going live. As online competition has increased year after year, and most businesses now have a website and other forms of a web presence, such as social media and business listings, this is no longer the case.
In fact, as recently as five years ago, 99 Calls customers received twice the lead volume within the first four months of services as they do when they sign on today. It now often takes weeks to months for a new site to rank on the first page of Google for enough keywords to begin to consistently generate leads.
Recognizing that online competition was increasing tremendously and that customers were becoming frustrated with the wait time inherent to organic lead generation, in 2018, 99 Calls added a Pay Per Click division through Google Adwords, now called Google Ads, to their service offerings. The leadership team realized the potential advantages that Ads offers to service contractors. Properly built and managed PPC campaigns can provide an almost unlimited (stopped only by budget constraints) supply of exclusive leads very quickly.
Although generally a bit more expensive than organic leads, Google Ads campaigns offer many advantages over organic lead generation alone, including quick results (within just a few days), quick adjustments to service areas, advertising budgets, and the ability to turn the system on and off. 99 Calls assembled and trained a talented team of certified Google Ads specialists and completed the requirements to achieve the status of “Google Partner”. This team of experts has developed a system with a targeted focus that works within contractors’ budgets to generate as many leads as possible.
During team meetings, as representatives presented accounts that were performing above expectations, more and more members noticed that the star performers were frequently those who were running a Google Ads PPC campaign in conjunction with regular organic lead generation. The phenomenon occurred frequently enough that more team members began to wonder whether running Ads and organic campaigns simultaneously generates a higher organic lead volume, even early on in the relationship with a client.
Background and Review of Literature
Although Google’s official statement is that there is no benefit to a site’s SEO rankings if the use of PPC campaigns is added, several members of the 99 Calls Ads team reported that they were seeing an apparent increase in organic lead generation results for customers using both PPC and SEO lead generation as compared to customers who used SEO (organic) leads alone. This inspired further investigation.
Other lead generation companies have reported noticing an increase in keyword rankings when the two vehicles are used together as well. Most have found no reason to dispute Google’s official stance, but have chalked the increase in the number of keywords ranking to the mere fact that online traffic to a web page will increase rankings, especially if the content is compelling and visitors stay on the pages, share the content, and click links within the pages. All of these interactions between users and pages will lead to increases in online rankings.
Because 99 Calls is a performance-driven lead generation business, we decided to take a different approach to learning the impact of combining PPC with organic local lead generation during the first few months of starting a new account. We are in the unique position of being able to measure both organic and PPC lead generation results through the use of tracking numbers and call and email reporting. Success on the 99 Calls lead program is measured not by keyword rankings, but by the number of leads achieved. Keyword rankings are important, but as we say, “The bottom line is leads.”
Hypothesis: The speculation mentioned above led us to wonder if we could demonstrate that combining our approach of local lead generation via organic efforts with targeted PPC campaigns would result in a measurable increase in organic lead generation.
The study consisted of new customers who signed on for lead generation with 99 Calls between September 5, 2019, and December 23, 2019, and kept the services for which they initially signed on running continuously for a minimum of four months. Another measurement was taken during the second four months of service. Only customers who signed on for Organic lead generation alone or in a discounted bundle combining organic lead generation with Google Ads campaigns were included. Customers who had been with 99 Calls in the past and returned were not included. Customers who used Google Ads alone and current organic customers who added a Google Ads campaign to an existing lead generation account were also excluded.
There were 54 new customers who signed on for organic lead generation alone and 13 who signed on for a bundle package that included both organic lead generation and PPC campaigns and received continuous services for at least four months.
Additional considerations, aside from well-optimized websites that contribute to organic lead generation performance, such as whether the customers furnished the lead team with photos and customer testimonials to add to the lead sites and whether the customers allowed 99 Calls to manage their online directory listings were noted. Of the 67 total businesses studied, only 5 did not allow the team to manage their Google My Business listings and 11 did not send any photos or online reviews to add to the lead sites. It is noteworthy, however, that of the people who did not fully participate in the program, only one received 5 organic leads during the first four months of services, and the others received three or less. This is consistent with other informal studies completed by 99 Calls which demonstrated that providing unique content on sites significantly enhances lead generation results.
Of those 54 customers, 45 continued on through the first eight months of service. Performance during those first four months of service was documented. Unfortunately, the second four months of data collection occurred during the months when COVID-19 was spreading widely throughout the United States, and many companies reduced their advertising budgets or placed their sites on hold.
The average lead volume achieved during the first four months or organic-only lead generation services was four leads. Typically, customers receive 0-1 leads during the first two months of service. As organic rankings increase, lead volume grows. Our experience is that lead volume steadily climbs month after month, with the average contractor benefitting from over 12 leads per month, and many receiving more than 20 per month after their eighth month of service. When the five out of the total 54 organic-only customers who did not allow us to manage the Google My Business listing were removed from the results, the average lead volume increased to an average of five during the first four months of service.
Although these numbers may sound discouraging, we have found that the first four months of an organic lead generation program are often the slowest. In fact, the average customer receives over four times the lead volume over the second six months as they receive during the first six months.
During the second four months of organic-only lead generation, 99 Calls customers received an average of 14 leads. Again, the results were less than expected during the timeframe of March 2020 through June 2020 due to the pandemic, but a trend was established. Customers in their first four months of lead generation service with 99 Calls received three additional leads when combining Google Ads with organic lead generation.
Because customers who use Google Ads PPC campaigns have set up budgets that differ quite significantly, the number of Google Ads leads produced from PPC campaigns were not factored into this study. We solely looked at changes in organic lead production on the sites using the organic-only and organic/PPC bundle programs. Only one customer of the 13 on the organic and PPC bundle program did not allow us to manage his Google listing. With this person counted, the average organic lead volume achieved during the first four months of service was 7.5 and increased to eight when they were removed from consideration.
During months four through eight, customers who utilized the combination of organic lead generation and PPC service achieved an average of 17 organic leads in addition to the Google Ads PPC leads they received. This demonstrates an average increase of 3 additional leads on average. Bearing in mind that all service industries were included in this sampling when the companies that specialize in water and fire damage restoration service were excluded, the average lead increase more than doubled.
Although it is reported that SEO rankings do not rise by adding a Google Ads PPC campaign, customers who signed on to receive organic lead generation in combination with a Google Ads campaign enjoyed a 60% higher lead volume from organic leads during their first four months of service than those who used organic lead generation alone.
It appears that the advantage that Google Ads had on organic lead volume was not as strong during the second four months of lead generation but still resulted in an 18% higher lead volume. Customers who combined Ads with organic lead generation received an average of 17 leads. This is most likely due to the fact that the organic lead volume was increasing on its own, as is frequently seen.
Why did this phenomenon occur? We believe the boost in organic lead generation is the result of increased first-page presence in search engine results. Rather than showing in the organic section of a search or possibly the maps section as well if the search is in the customers’ towns of residence, running a PPC campaign adds another placement on the first page of a Google search. This double and (possibly triple) exposure provides potential buyers double the opportunity to select them and call for a quote. It is thought that having a large Ads budget will result in the largest increases in organic lead volume because the Ads will be shown more frequently throughout the day.
Industries That Generate The Highest Organic Lead Volume With 99 Calls
This study included contractors from many industries, including roofing, water damage restoration, painting commercial cleaning, handyman, moving, remodeling, landscaping, and plumbing businesses. Several industries demonstrated a much higher-than-average lead volume on the organic service.
Roofing, Remodeling (including replacement window contractors), carpet cleaning companies and appliance repair contractors often achieve lead volumes of over 20 per month with the first four months of service, while businesses with higher competition and lower searches, such as water damage restoration fire damage restoration typically receive 0-3 leads per month consistently throughout their first four months of service. However, restoration jobs usually bring in more than $10,000 in revenue per incident, and close rates for contractors is often higher, as long as they answer their phone and are immediately available.
Google Ads Campaigns Produce High Lead Volumes Quickly
Google Ads PPC campaigns built and managed through 99 Calls drives a high ROI for contractors. Although the leads are generally 15%-20% more costly than through organic lead generation, the cost per click decreases over time. Google Ads has the ability to produce a high volume of leads in a short period of time. For example, the 13 customers that were examined in this study received 372 leads within the first four months of service, as compared to 65 total organic leads achieved for those same businesses during the same time frame.
This study has inspired us to consider other factors in enhancing lead generation results for contractors, including optimizing Ads PPC budgets and working to further increase participation in the organic lead generation program. In addition, the 99 Calls Google Ads team has been working to decrease the cost of lead generation from PPC to the point that these leads are just slightly more costly than organic leads for many industries, namely carpet cleaning, commercial and residential cleaning, electrician work, appliance repairs, damage restoration, and painting.
Contractors who serve home and commercial industries understand that to get jobs, you need leads. There is a lot of information out there about lead generation. Some is true, and some is misleading, or downright false. Worse, several lead generation firms use misinformation as scare tactics to lure customers into their programs. Even if not intentional, there are quite a few myths floating around about lead generation. This article highlights the most common myths about buying leads and gives pointers on how to identify a reputable, effective lead generating program.
Lead Generation Myth #1: I Don’t Need to Buy Leads- I Can Get My Own
You may be a skilled painter, carpet cleaner, plumber or electrician. You may get quite a few referrals from happy customers who have shared your information with a friend or neighbor. Other people may have called after seeing your lettered truck around town.
While it’s true that the most reliable leads with the highest close rates come from referrals, and while you probably do get calls from people who saw your truck, these methods alone are probably nowhere near enough to grow and sustain your business.
Lead Generation Myth #2: I Can’t Afford to Buy Leads
If you think leads are too expensive, you are not alone. We frequently hear from customers that they don’t have the money to buy leads. And it can certainly feel that way when you do not have a lot of revenue coming in and times are tight. However, investing in lead generation is a proven way to grow your business, and following this calculation will ensure a positive return on your investment:
Here is a simple way to figure out what how much you can afford to spend per lead. In general, the goal is to keep your cost of lead generation below 15%, and Ideally 10% of your revenue from each job. If your average job brings in $800, you should spend more than $120 on your marketing. To complete the calculation, you’ll also need to know your close rate. Most contractors close 1 or 2 of every four jobs they bid, or a 37.5% close rate.
So, here is the formula to figure out the maximum you should spend per lead:
Revenue (price of the job) X 15% (max % to for leads) X Close Rate (Average is 37.5%) = Max Lead Price
Using the Example Numbers Above: $800 X .15 X .375 = $45
So, if you generally close 1 or 2 jobs out of every 4 and the average job brings in $800, you can afford to spend a maximum of $45.00 for each lead. Imagine if you could get 20 good leads in a month. You would expect to close about 8 of them. For spending a maximum of $900 (20 leads X $45 each), you could expect to bring in $6,400. If you can get your leads for less, your profits will increase, of course!
Lead Generation Myth #3: I Shouldn’t Pay If I Don’t Win the Job
Unfortunately, just like all other forms of marketing and advertising, there is no guarantee that a lead, no matter how “hot”, will turn into a job. In fact, even the best sales reps close about one of every two to three leads.
This is just the cost of doing business. There are certainly methods you can use to increase your close rate, which will increase your return on investment of purchased leads. The biggest factor is knowing ahead of time what you will pay for your leads and to be certain that you will not be billed for unqualified leads. Finding a company that listens to the calls and only bills you for qualified leads is key.
Lead Generation Myth #4: I’m Going to Be Sent Old, or Recycled Leads
Quite a few contractors tell us that they are concerned about being sold “stale” leads. Many share stories of getting a lead and calling the number almost immediately, only to find that the person does not respond, or that they “no longer need the service”. How can this be if they were just sent the lead?
There are companies out there that use different channels to generate leads. Our experience is that producing live, exclusive leads is possible, is cost effective and is the right way to do business. There are a couple main ways to generate live leads, both through SEO efforts and PPC (pay per click with Google Ads). Although SEO lead generation takes time to generate consistently, PPC is a great way to get leads coming in quicker.
Lead Generation Myth #5: I’ll Get Shared Leads with Other Contractors
Here you will need to be careful because many lead generation companies sell their leads to multiple contractors. This situation can be disastrous if you are having to compete with businesses who do not play by the same rules. Businesses that cut corners by not being fully licensed and ensured and don’t pay employees reasonable wages quote low estimates for jobs that quality contractors can’t compete with.
There are still some of us who offer live and exclusive leads to contractors. Yes, customers may still have to call three contractors to present to a company owner or to review on their own, but when you answer your phone in a professional manner and make yourself available for a quick and fairly priced bid, your chances of winning the job are excellent.
Lead Generation Myth #6: I’ll Get Thrown Off of Google
Competitors frequently call our customers, trying to win them over by using this scare tactic. They tell the contractors they cannot have more than one website, and if they do, Google will penalize them or pull their site down. Really? Do you know how many Dunkin Donuts websites are out there? What about Lowes?
Companies that serve multiple locations frequently set up local advertising campaigns, including sites, listings such as Google My Business, Yelp and even Facebook Pages. All of these are techniques to drive local traffic to their business. You certainly can use more than one website for a business. However, you can’t have multiple listings at the same address for the same business. This is the best way to get into trouble with Google. You can work with a lead generation company who offers a second site for leads. Just be sure they know what they are doing, and do not give up ownership of your listings and citations – many companies are known for holding them hostage when you part ways.
Lead Generation Myth #7: Buying Leads Will Hurt My Branding
Although we market our customers by promoting them by name, most lead generation companies will market your services but not your name. Either route is ok if your main goal of the partnership is lead generation. If your phone is ringing, does it matter if the customers know exactly who you are?
You can work on establishing a relationship with them when you go out for the bid, shake their hand, and give out your branded business card. The purpose of buying leads is to get that inquiry for an estimate. The brand building happens when you perform excellent work and the customer calls you directly the next time around, leaves a great review on your Facebook page or refers a neighbor
How to Buy High Quality Leads for the Right Price
Hopefully, we have been able to demystify the myths behind buying lead generation services and have demonstrated the value in purchasing quality leads. There are a few companies out there that get it right and work to give you the biggest bang for your marketing bucks.
Here are the top things to look for in a lead generation company:
Make sure they don’t charge a fixed monthly rate. Yes, you’ll always know what you will be billed each month, but many companies are happy to charge you $399 or more whether you receive 1 lead or 30. Fine a company that will bill you a fair price per lead.
Find a Company that only bills for qualified leads. Getting billed for services you do not provide or from areas you don’t serve will rack up your expenses and offer no value. Be sure to set the parameters ahead of time and find out what their policy is for disputing leads.
Beware of companies that sell shared leads. These are frequently cheaper, but the quality is lower, and you will have to come down quite a bit on your pricing to win the job. Be careful that you do not bid so low that you lose your profits, or worse, come out in the hole!
Avoid any company that requires a long-term contract. Make them prove themselves to you month after month.
Don’t allow companies to own your listings. Hundreds of customers have wound up with listings in a tangled-up mess, with outdated information that they no longer have access to. Reputable companies will keep you as the owner or will turn over the ownership to you should you part ways.
Be patient! If you are working with a company that utilizes SEO-style lead generation, which tends to be the least expensive method, know that it takes months for the system to ramp up. In the meantime, consider working with them on a highly effective and pinpointed PPC campaign. These leads are a bit more expensive but can still produce leads within your max lead price point.
Have More Questions About Buying Leads?
If you still have questions about buying leads, the lead generation specialists at 99Calls.com are ready to help. You can call 800-717-4669 to speak with a representative or click here to schedule a call at a convenient time for you.
There is a great deal of uncertainty about who and what is considered an essential employee or business during this time of lockdown throughout much of the United States. Of most importance is the safety of workers and the public from the spread of the coronavirus, or COVID-19. However, government officials also recognize that there are certain services that need to continue in order to keep people safe and maintain buildings in working order and support a struggling economy.
There is good news for contractors in a variety of industries who provide services to both residents and businesses. Tradespeople are considered to be essential employees in many states. According to The Cybersecurity and Infrastructure Security Agency (CISA), “Workers such as plumbers, electricians, exterminators, builders, contractors, HVAC technicians, landscapers, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, businesses, and buildings such as hospitals, senior living facilities, any temporary construction required to support COVID-19 response” are considered essential businesses.
Types of Essential Work Permitted
As lead generation providers who specialize in serving contractors, we at 99 Calls have identified several categories of essential services under the guidance of the CISA. Industries relevant to these essential services include Janitorial and commercial cleaning businesses, damage restoration companies, plumbers, appliance repair personnel, emergency tree services, landscaping businesses and others who provide residential and commercial services that keep people and businesses sanitary safe, during the COVID-19 outbreak. Of the 16 categories (see image below), three specifically relate to contractors within industries we serve. They include commercial facilities, residential facilities and services, and hygiene services.
Commercial Facilities Category
Workers who support the supply chain of building materials from production through application/installation, including cabinetry, fixtures, doors, cement, hardware, plumbing, electrical, heating/cooling, refrigeration, appliances, paint/coatings, and employees who provide services that enable repair materials and equipment for essential functions.
Workers distributing, servicing, repairing, installing residential and commercial HVAC systems, boilers, furnaces, and other heating, cooling, refrigeration, and ventilation equipment.
Residential/Shelter Facilities and Services Category
Workers responsible for handling property management, maintenance, and related service calls who can coordinate the response to emergency “at-home” situations requiring immediate attention, as well as facilitate the reception of deliveries, mail, and other necessary services.
Workers performing housing construction-related activities to ensure additional units can be made available to combat the nation’s existing housing supply shortage.
Workers supporting the construction of housing, including those supporting government functions related to the building and development process, such as inspections, permitting and plan review services that can be modified to protect the public health, but fundamentally should continue and serve the construction of housing.
Hygiene Products and Services Category
Workers providing personal and household goods repair and maintenance.
Workers providing disinfection services, for all essential facilities
Workers necessary for the installation, maintenance, distribution, and manufacturing of water and space heating equipment and its components.
Support required for continuity of services, including commercial disinfectant services, janitorial/cleaning personnel, and support personnel functions that need freedom of movement to access facilities in support of front-line employees.
Which States Are Allowing Contractors To Operate?
As the current situation continues to evolve, it is important to also check with your state’s government offices. It is also important to note that in addition to being considered an essential business or worker, it is necessary to follow the CDC’s guidelines to avoid the spread of COVID-19, including wearing appropriate protective equipment and social distancing.
This information is advisory and should not be considered a standard across all states. Each state has determined what businesses are considered essential and contractors should adhere to their states’ rules and regulations for specifics. At the time of this article being written, the following states are considering tradespeople as essential:
Contractors Can Stay Safe During the Pandemic
If you are considered an essential employee, you may be wondering how to keep yourself, staff, and customers and your family safe and healthy. The virus is primarily spread from person to person and there are steps you can take to protect yourself and those around you. Employers must stay abreast of the latest CDC guidance, and should frequently remind workers to follow all necessary precautions.
Keep at least 6 feet of space between you and other people. This includes all customers and coworkers. The newest guidance is to wear protective face masks when in public places.
Avoid groups of people of 10 or larger. Allow employees to work from home when possible.
Continue to wash your hands often and thoroughly. You should wash your hands for at least 20 seconds, especially after being out in public, blowing your nose, coughing, or sneezing.
If handwashing with soap and water is not readily available, use a hand sanitizer of at least 60% alcohol.
Avoid touching your face with unwashed hands.
As a contractor, it is important to limit staff members on-site and practice social distancing when on a job site.
When it comes to getting payment from your customers, try no-contact methods like PayPal, Venmo, or other online payment methods.
How to Keep Your Business Operating During COVID-19
Of course, the health and safety of your family, your employees, your customers and yourself comes first. Second, and still important is preserving the viability of your business. If you are in a state that considers your services to be essential, how can you access leads and get your phone ringing? First, update your website and Google listing to alert potential customers that you are still open for certain types of business.
Next, if you aren’t doing so already, consider running a Google Ads campaign. Google Ads is a great way to generate leads quickly. Google Ads PPC is a silent auction-style where you bid on certain keywords to get on the first page of Google. This service allows contractors to target specific services in the towns they serve. Many business owners are concerned, and rightly so that Ads campaigns can be too costly. If you are not familiar with how to manage a budget and get the biggest return on your investment, consider partnering with a lead generation firm that can help you reach your lead and revenue goals.
There are quite a few services that people are searching for amid this viral crisis. Some of the most frequently searched services we are seeing include disinfection and decontamination of homes and facilities, plumbing services and appliance repair. These are all important to keep homes and businesses functioning. Even during these times, emergencies and disasters still occur, such as water damage from appliance leaks and home damage from fallen trees.
The main industries that are still receiving a robust supply of leads include:
How much is a roofing lead worth? That depends on many factors. The main considerations in determining lead value to a roofing contractor are the quality of the lead, how many other contractors are competing for the same job, and the likelihood that the contractor will close the job.
If the average roofing job in the US brings in a profit of $1000, would it sound reasonable to pay $100 for a lead? For some contractors, this question yields a resounding “yes” and for others, that price point is not sustainable. Let’s analyze lead pricing and lead valuation based on the factors presented.
What defines a “quality” lead? First, is the call a live transfer, or a stale inquiry? Did the lead come from an email request or a live phone call? After years of collecting data on lead types, we have found that email leads tend to come from “shoppers”, while phone calls come from “buyers”. Although leads that are sent through email are valid and are often closed, phone calls are far superior to text messages or email inquiries. Motivated buyers are more likely to pick up the phone and speak with a contractor.
And when customers call for a quote, the contractor is more likely to set an appointment when given the ability to speak directly with the buyer. He’ll already begin the process of establishing rapport, developing a relationship and winning new business. When working with a lead generation company, you’ll want to ask how much freedom you will have in determining what would be considered a qualified lead.
99 Calls allows contractors to define “qualified lead” by defining specific towns in which to be promoted and specific services that will be provided, such as reroofing, roof installations and roof repairs. If a consumer is calling for a service not offered by the contractor, or from an area not covered in the specified territory, it is NOT considered a qualified lead and is not billable.
If you’re being sent leads from 70 miles away, you’ll have to consider the time it takes to get out there to provide a bid and will need to factor your time into your total cost for acquiring the job. If it takes hours to provide one estimate for a roofing job, that’s time that could have been better spent giving multiple bids closer to your office.
Shared vs. Exclusive Leads
Another very important factor in determining a fair price for roofing leads is the number of contractors the lead is being distributed to. Is the lead being shared with multiple roofing contractors, or is it exclusive to one contractor?
Shared leads tend to be considerably less expensive than live, exclusive leads, but the chances of closing the job are greatly diminished. The last thing a roofer wants is to enter into a bidding war over a job. If a lead is sent to 4-6 contractors, a bidding war will almost certainly ensue, which will drive revenue and resulting profitability of the job down. Consumers frequently go with the lowest price when given multiple bids. Being forced to give “low ball” bids can quickly diminish earnings.
In addition, the close rate on shared leads is much lower, of course, than on leads that are exclusive, as the competition for the same job is higher.
Some roofers prefer low-priced shared leads. If you’ve got lean operating costs and high lead volume so that you can work under a lower profit margin, and are a superior closer, you may benefit from buying discounted shared leads.
However, most contractors would prefer to operate with higher profit margins and avoid bidding wars. Although exclusive leads cost 25-50% more than shared leads, the close rate could as much as double, especially if you answer your phone when it rings, speak with the customer and present yourself professionally. In this case, exclusive leads will bring a much higher return on your investment dollars and will be more valuable to your business. For more information on shared vs exclusive leads, see this LinkedIn article.
Roofing Sales Close Rate
The close rate of the contractor also plays a tremendous role in the value of a lead. Most contractors understand that being a trained sales professional isn’t necessary to increase close rates.
Being honest, clean cut, friendly and professional goes a long way. Arriving on time and bringing a portfolio to meets with prospective customers, having testimonials from prior satisfied customers and a solid local reputation will really set a contractor apart from the competition. One of the best things a contractor can do to increase close rate is simply answer the phone, especially when purchasing live, exclusive leads.
Why Close Rate and Lead Type Matter
The two biggest factors in determining your budget for buying leads are the close rate for jobs and whether the leads are exclusive or shared with other roofers. If you’ve hired a sales person to close jobs, you’ll also have a commission payment to add to your expenses.
A roofer’s ability to close jobs makes the difference between winning enough bids to run and even grow a business or not being able to scrape by. Shared vs. exclusive leads will affect acquisition cost, or the cost of acquiring each roofing job. In the examples below, let’s say the average job yields $1000, before factoring lead cost.
Effect of Close Rates with Exclusive Leads
Example 1: Close Rate:
Contractor “A” is a real professional. He closes 1 of every 3 leads. If he’s paying $100 per lead, his job acquisition cost is $300, since he wins one job for every three bids that he provides, on average. Subtracting the $300 to buy three leads from his average earnings of $1000 per roofing job, he is netting $700 per job. That means he’s paying 30% of his earnings to land his jobs.
Contractor “B” is less professional. He doesn’t follow up after dropping off a quote, doesn’t frequently answer his phone, and doesn’t present himself as “polished”. If he closes 1 of every 6 leads, he’s paying $600 for each new job. That’s 60% of his earnings being spent to land the same $1000 job.
Both contractors still must factor in their fixed, or indirect, expenses into the equation. These are the expenses they pay regardless of the number of jobs they close, such as rent, utilities, work vehicles and insurance. Once these are subtracted from the gross profits of each job, the actual profit margin is figured. As you can see from the example above, contractor “B”’s profit margin will be significantly lower than contractor “A”’s.
Acquisition Cost with Shared vs Exclusive Leads
Example 2: Shared Leads vs Exclusive Leads:
There are many companies that sell leads to multiple contractors, such as HomeAdvisor and Networx. Some contractors find them to offer a great value. Other roofers will avoid distributed leads at all costs.
If Contractor “A” is buying SHARED leads, even if he is a fantastic closer, his close rate will decrease. He’ll be competing with multiple contractors, which often leads to bidding wars. He may need to lower his prices to be competitive. Having to lower prices to compete comes right off the top! Shared leads will decrease the close rate of even the best salesman and will decrease profitability of each job.
Less professional Contractor “B” will far even worse in a shared lead situation. If he’s only closing one and six jobs with EXCLUSIVE leads, having to lower prices to compete with multiple bidders could put him out of the game entirely.
If a contractor isn’t careful and lowers pricing too much in hopes of winning the job without attention to his acquisition price, profits could be minimal or worse. By the time labor and expenses and leads are paid for, (let alone those indirect expenses) he may have actually LOST money on the job!
Before a roofing contractor decides an appropriate price to pay for leads, he should decide if he is after exclusive leads or shared leads. Contractors can expect to pay $35-$180 for live, exclusive roofing leads, and $18-$85 for shared leads.
Great closers and contractors who are quick to answer calls will fare well in any situation and may benefit from buying discounted shared leads. All contractors, and especially those who are quick to answer and return calls can benefit from exclusive leads but must be willing to pay more initially for them, knowing that the ROI will be more robust.
For more information on lead generation for roofers and on purchasing exclusive roofing leads priced under $40.00, call to speak with a roofing lead specialist from 99Calls.com at 800-717-4669.