Q & A From Our November 2011 Webinar

Last week’s home improvement webinar on lead generation was a rousing success. There were over 950 companies on the program and we received numerous questions. As is frequently the case, we did not have enough time to answer them all on the webinar so we took the opportunity to respond on our blog (the first series of questions and answers are covered in our latest e-newsletter – to receive a copy e-mail admin@daveyoho.com).

Here is a sampling of the questions we received:

Q: You give the impression that many home improvement companies have tried canvassing, yet few have been successful at making it work “long term” within a practical budget.

A: As we pointed out in the webinar, it is not uncommon for companies with a canvassing program to issue as little as 30% of their canvass leads as appointments. In addition to that, they may only gain entry into 40-50% of these homes for a presentation.  They experience a closing ratio lower than they do for other leads (some of this is attributed to the salesperson’s dislike of that lead). Then top this off with marketing costs that sometimes exceed 20% (some even much higher).  Not a practical way to do business.

Q: Has your company made a study of effective canvassing programs?

A: You bet, and here are some of the basics:

Unless companies subscribe to a plan that includes territory and time selections (by management) for canvassing in middle income neighborhoods, they’re off to a poor start.

It is human nature to try to find the path of least resistance. Better neighborhoods with higher income families frequently represent better education and more well-informed prospects and in turn represent more complications in developing a lead.

But there’s more to it than that.  Actually, there are about 51 components for an effective program. The script language is extremely important.  Intelligent people with money to buy the products you offer have to receive information which they see as beneficial.  Many canvassing groups use a mini-presentation book at the door.  One company we studied has canvassers earning $40-60,000 annually with a fully loaded marketing budget of approximately 9.6%.

Q: What kind of results can be effective with a well-managed canvassing program?

A: The better managed companies have a 50-60% issue rate, a 60-80% sit rate and marketing costs below 15% (fully loaded).

Here is an actual case study of a very efficient program:  Canvassers working (average) 4 to 5 hours daily produce ½ lead per hour set with the homeowners by the canvasser (via cell phone) with their office. This translates into a 60% (minimum) presentation (sit) rate and a minimum of 1 presentation (sit) produced in less than 8 hours of the canvasser’s effort.

One of the keys in this last case study is the “canvass manager” who makes everyone (including himself) adhere to the “model” of the program.

Is it easy? No. Is it successful? Yes. Is it cost prohibitive? This particular company operates with overall marketing costs at 13% and their canvass program (fully loaded) is slightly over 12%.

Q: We are considering hiring a company to do our canvassing.  What are some of the cautions?

A: We received the same question from 12 companies who participated in the home improvement webinar.  If you tried canvassing on your own and couldn’t make it work, or it was too costly, you may succumb to someone who encourages you to let them do the canvassing and provide you with the leads.  There are several smaller companies who provide this service – however – be cautious of “canvassing companies” who want to sell you leads. Several larger companies who provide this service do not appear to have “long term” success stories.

Q: Our salespeople don’t like the canvass leads, so we haven’t been successful with closing many.  Apparently our canvass program “stinks”.

A: Your question probably contains the answer.  You hired salespeople, promised them bona fide leads and they expect to get them. However, if you are allowing your salespeople to determine the source of leads you will never get a canvassing program to work, and since this is but one form of face-to-face lead solicitation (which also includes “shows” and “events” and “SFI programs”) the failure is not in the lead, but in the method of adapting a salesperson on how a face-to-face lead has to be handled to obtain results. Unfortunately this is a management failure.

Management frequently “succumbs” to the complaint of the salespeople that these are “weak leads”.  When the sales department convinces management this is the case, the marketing department is told to get a stronger lead. Ergo: the number of leads decrease and management is unhappy because they don’t have enough leads for the salespeople.  Weak canvassing methods include “looking for”.  Successful canvassing programs treat the canvassing department as part of the sales methodology. At the risk of being repetitious, modern techniques require that the canvasser be hired with a behavioral profile indicating sales “traits” and the ability to follow special scripting devices which often includes a mini presentation book. The appointments were set via cell phone from the canvasser and the prospect to the call center.

Again, at the risk of being repetitious, The successful companies measure not only the number of leads which are produced by hourly effort, they measure the hours it takes to produce a sales presentation from the leads acquired with a marketing budget of 12% to 15%.  In short, the entire process is treated as a science – not – an art form.

Q: We received numerous questions on “diversified lead sources”.

A: Today’s marketing techniques, whether for a small company trying to stay alive or a large company attempting to expand, have to include diversification. Smaller companies may have 10 or 12 sources for lead development; larger companies 30 to 50 sources.  Companies who choose not to diversify their home improvement marketing typically tell us:

• The majority of their leads are referred to them through a satisfied customer.
• We are a recognized name in our territory, so we don’t do much advertising.
• We invested heavily in print ads – yellow pages – web design – or similar and couldn’t make it profitable.

Here is what you have to remember.  In every market and for every product or service sold in that market, there are a certain number of prospects who develop a “need” for most of the products sold.  The trick is how to identify and find these prospects then sell them without resorting to being the “lowest price” in town.

The next “trick” is to find ways to identify and attract prospects who haven’t yet met the explicit need level, but could be convinced to “take a look”.  That requires a good marketing technique which then has to be balanced with a strong sales technique.

This is not being critical of those who get “referred” as a good contract or source, because referral leads are great; most salespeople love them. The reason they don’t get more of them is usually determined by their lack of “asking for them”. If you can develop enough business without advertising or spending promotional dollars, I applaud you. However, keep in mind that past customers should be solicited for referrals with a plan that meets the requirements of your local state laws.

We will answer more questions on our next blog posting so make sure to subscribe so you can receive updates as they happen!