In our most recent webinar on lead generation and management, we covered a wide array topics pertaining to how you could get and convert leads at a more efficient rate. We were inundated with questions which we addressed in our last blog posting.
Q: In your recent webinar on lead development, you explained “gaming”. Can any type of lead utilize this method?
A: (Mark) Gamification is valuable in marketing as a way to keep leads engaged with you and your products. It represents activities that keep leads interested in you. Clearly, all marketing cannot be a game, but wherever you can use tools to keep leads engaged, you will see the rewards of greater lead interaction.
Q: Why can’t we fully automate the confirmation messaging and automatically send it out to all leads?
A: (Mark) Confirmation messaging can be automated, but fully automating the delivery of confirmation messages (as you would with email) has created unhappy leads unable to get calls answered by the call center. There is a successful process, which will reap high return calls and ultimately greater demo rates and sales.
Q: Can we send text messaging to random numbers for prospecting?
A: (Mark) Many types of leads can connect to you through text. Your only limitation is with text messaging to purchased lists of unconsented random leads. There are strict rules and steep fines for violations. Consult experts in the field for best practices.
Q: Is there a higher action (response) rate in mobile than non-mobile?
A: (Mark) Yes, in comparing the response rate of a text message to a response rate of an email, there is no comparison. Of course, this question is broad and the application and execution of the call-to-action is the ultimate key to maximizing a text response rate.
Q: Mr. Highbaugh, your plan sounds great; however, does it require that we become “techies”?
A: (Mark) You should never be asked to learn the technology behind an application. We learned long ago to provide intuitive and simple web-based interfaces tested and designed for the beginner-level user. All mobile/text programs should be designed with the end users ease-of-use in mind, it should be a central focus for those providing such services.
Q: Do you see companies having success with purchased lead providers (Home Advisor, Modernize, Elite 360, Angie’s List, etc.) and if so, what are they doing to convert these types of leads to paying clients?
A: (Tim) We’ve seen some companies do great with purchased leads while others say it’s a waste of time. The place to start with being successful with purchased leads is in your head… your attitude. If you and your staff think these leads are “tire kickers” or where your competitors also received the lead… you’re dead in the water. These leads are ‘different’ than hot, inbound leads and require a different skill-set to convert them.
In talking to many of the players (Home Advisor, Elite 360, Angie’s List, Modernize) they tell a story of many contractors being unequipped at converting these inquiries to set appointments. After all, it is the contractor’s “response-ability” to turn these purchased leads into sales.
As it relates to Response… you need to respond to these leads quickly and you can’t give up after the first try. As it relates to Ability… does your company have the ability to respond to these leads skillfully (are your people scripted properly?).
Remember, organizations like HomeAdvisor, or Elite360, are spending millions of dollars a year to attract homeowners in search of a contractor and it is in your best interest to develop the skills to convert these leads, first to an appointment, and then to a sale.
Q: It seems our internet leads are ‘different’ from the leads of yesteryear. How can we convert more web leads to appointments and then sales?
A: (Tim) In many ways, leads today ARE different. The internet has brought many more people into the buying process much earlier in their decision-making process. Years ago, buyers and sellers would often only come together at the tail end of the buying process when the buyer was quite motivated to make the purchase. Today, the internet drags buyers into the process early and the seller has to engage with them then lead them down the path to purchase. All of which involves skills that weren’t necessary years ago.
Often, your success is heavily dependent on your web strategies (your website, nurturing campaigns, etc.). It is advisable to get some professional help from vendors familiar with our industry in this important area of you marketing process.
Q: I hear direct mail is making a comeback. Also, is print advertising worth trying?
A: (Tim) First, let me say that direct mail never really went away so I’m not sure the word ‘comeback’ is relevant here. That said, the digital age along with higher postage rates has certainly contributed to a dip in the number of pieces of mail in our mailboxes, and may be a GOOD thing – Less Clutter! Here we’ve seen… Shotgun campaigns don’t provide a good ROI (limited market, not like selling pizza) – Targeted campaigns such as radius marketing still succeed especially if you incorporate web components (Promote offline and drive online).
Direct mail also works great in communicating with unsold leads and past customers. Something as simple as a letter or postcard to your unsold leads announcing a price increase can shake loose a lot of business. The great thing about direct mail is that it so easily ‘testable’ meaning you can try various things in small quantities and monitor the success.
Q: What reports and “Numbers” should each home improvement company be SURE to monitor on an ongoing basis?
A: (Tim) Although there are many metrics important to your business let’s focus on the Six “Gotta Have” Numbers Your Business Absolutely Needs to Know and How to Get Them? Many businesses believe the only goal is their NET PROFIT. That may be obvious, but it’s safe to say that if these six numbers are in order, your net profit is both identifiable and attainable.
These six critical numbers are Key Performance Indicators (KPI’s) that will help you benchmark your business’ performance and assure desired profitability.
KPIs help to get insight in your business performance — KPIs are also known as performance metrics, business indicators, and performance ratios. To put in another way… KPI’s are measures that help you understand how you are doing against your objectives.
KPI #1 – Your Inquiry -> Set Appointment Conversion Percentage (set appointments ÷ lead inquires)
According to industry statistics, it may cost a specialty remodeler $200 to $300 to generate an ‘inquiry’ or a ‘lead’. Does your business treat EVERY inquiry that comes into your business like gold? The goal here is to convert as many of these raw ‘inquiries’ into solid, set appointments as possible. How is your business doing in this area? Often the sloppy, unscripted handling of these precious leads allows many to fall through the cracks. A big mistake is often over-qualifying the inquiries. Have you listened to how your phone inquiries are handled on a daily basis? Track this important statistic to be sure that your staff is doing its job in making this very important “first sale” (the appointment). After all, without properly setting a solid appointment everything ends right here!
KPI #2 – Your Set Appointment -> Demo/Presentation Percentage (actual full demos ÷ set appointments)
Ok…so you spend big dollars to generate an inquiry. Your staff does a great job with it and converts it to a set appointment for a specific time and date. How many of these important appointments are evolving to a full presentation/demo giving your salespeople a chance to close the deal? Are your salespeople ‘cherry picking’ too many of these expensive leads…didn’t like the way the house looked? Or maybe the lead has the wrong last name! Tracking this percentage will help you keep tabs on the value placed on these set appointments. To improve your company’s “demo rate” you may want to consider implementing some “pre-positioning” efforts with your prospect prior to your salesperson’s arrival.
KPI #3 – Your Salespeople’s Closing Ratio (closed sales ÷ leads issued or closed sales ÷ leads demonstrated)
Obviously, excelling in the first two KPI’s will have a direct impact on how often your salespeople can bring home the signed contract…thus closing the sale. Having your salespeople hone their sales skills can dramatically impact your success in this critical area. Be sure to track their closing ratio on both the number of leads issued and the number of leads actually demonstrated. Ongoing sales training for your staff can be critical to keeping this number up.
KPI #4 – Net Sales Per Lead Issued (net sales $ ÷ number of leads issued)
Just knowing your salespeople’s ‘closing ratio’ doesn’t tell the whole story. What if they have a very high closing ratio but their ‘rescission rate’ is 30%? Probably NOT a good thing! To tell the WHOLE story you should track the net revenue generated per lead issued. This number automatically takes into consideration things like sales price, canceled sales, no demos, etc. It’s a great single number evaluation to gauge your salespeople’s performance. Obviously, the higher the number, the better. You can also analyze an additional element to this number by segmenting this statistic by “lead source” or “product type”. Wouldn’t it be great to know which of your salespeople perform better with certain lead sources or which salesperson excels with various product type leads.
KPI #5 – Your Web Conversion Rate (website/landing page conversions ÷ page visitors)
Your web conversion rate is the percent of site visitors who do something your company wants them to do (request an estimate, sign up for the sweepstakes, request a consumer guide, etc.). Are your website(s) and/or landing page(s) doing their job? It’s one thing to get prospects to your online presence but it’s another to actually succeed in your objective. Too often, your objective isn’t clear to the prospect resulting in them landing on your page(s) and then leaving without any value to your company. Your web strategies need “conversion-ability”! Do you have clear ‘calls to action” or is your site a navigational disaster for your prospects? Be sure you are using Google Analytics (or similar) to track this important number. This is one area where you may need some industry-specific help to maximize your results.
KPI #6 – Your Marketing Cost per Sale ($ spent on each lead source ÷ # of sales received from lead source)
Do you truly know what advertising/marketing methods are working best for your company? In today’s era of higher and higher lead costs, knowing this number is HUGE! Knowing how much you have to spend on each and every marketing method you use to generate a sale (not just a lead) will take the guesswork out of planning out your marketing for the future to reach your goals. This information is like gold and holds the key to keeping your marketing costs down.
Make sense? Of course it does. Is it easy to track these important numbers? It can be if you put systems and technology solutions in place to gather, track and analyze this important data. The ‘post-it note system of management’ probably won’t cut it. A well laid out CRM designed for our industry is a must. Typically, “off the shelf” (generic) software solutions fall short of adapting to the specific needs of our industry.
There are a number of industry specific solutions that make it very easy to track and analyze these important numbers with concise “performance dashboards” reflecting your company’s KPI’s.
You can manage your business by the numbers or manage by Maalox. The successful companies of the future will not neglect the importance of “knowing their numbers”. Dedicate yourself to absolutely knowing these six important numbers and continually work on ways to improve them! Strive to improve each and every one of these numbers by only an achievable 5-10% and you’ll be amazed at the ‘bottom line’ improvement in your business.
We will continue to field your questions from the webinar and look forward to our next webinar on leads on August 2nd.
Marketing costs are and will continue to be a source of concern within this industry. Entrepreneurs grow their businesses through creativity, inspiration and faith. The efforts as well as the risks they face in running their business, require a thorough review on an ongoing basis of how they are doing so there business can move forward. They need to understand that revenue increases have to be balanced with profitability increases. As their business grows the need for capital increases. Growing a company purely out of the profitability of a few good years is usually a mistake. It creates problems in making long term plans, responding to capital needs, retention of profitability, long-term exit strategies and similar.