The home improvement business is also home to one of the greatest ironies in all of business.
It happens all the time
Example Number One: A business owner visits a potential client’s home to discuss remodeling their family room. He hasn’t been there more than five minutes, when the home owner asks how much it is going to cost. There is something wrong with that picture. The homeowner might already have one or more other estimates. He is assuming that all home improvement businesses are equal, so he is looking for nothing more than a ballpark price. The business owner is dead in the water, unless he can explain what his company proposes to do and creates value that makes sense to the homeowner.
Example Number Two: The same business owner is contacting lead generation services, looking for the best deal. The first question he asks is how much it will cost. He is assuming that all lead generation services are the same. That is ironic, but it is also reality.
Why would a business owner want his potential customers to consider the value of his services, but not extend the same courtesy to lead generation services?
It happens everywhere
This lack of rationale is not limited to the home improvement business. It happens across all business sectors where lead generation is important to growth. Because purchasing leads is a sales expense, it is only natural for a business owner to keep expenses low. The problem, however, is failure to understand the cost of leads as opposed to the value of leads.
Not all leads are created equal
The majority of lead generation services are compilers of available information (e.g., names, addresses, and phone numbers). Your business agrees on parameters for the leads and pays a fee for the number of “leads” returned.
A list of information is not the same as a list of leads.
- Not all information on generated lists is valid. Many lists contain information that is no longer accurate. Typically, addresses and phone numbers. Using abstract numbers, if a list of 10,000 “leads” costs $1,000, simple (but erroneous) math calculates the cost at $10 per lead. If 30% of the contact information is invalid, the cost per lead increases to $14.30 and your business incurs $300 in irrecoverable costs. The ROI on the remaining leads is also reduced before they are even converted.
- Not all homeowners within a defined geographic are quality leads. Although they have home ownership in common, that may be the only thing they have in common. The question is why would anyone pay for a list unless the list has been vetted as containing only qualified leads? Data suggests that only 27% of marketing leads of this type ever convert into sales. Using the same numbers, the cost per lead would increase to $37.00 (3.7 times the quoted price) and the irrecoverable cost would increase to $7,300.
Only qualified leads have value
The issue is not how much the leads cost. It is how much value they have. Qualified leads always have three characteristics:
- Valid data
- Current interest
- High conversion potential
Qualified leads are the only leads that home improvement businesses should purchase. Why would any business purchase any product or service they cannot use? Yet that is exactly what happens when businesses buy lists that include invalid information.
Help us stamp out the irony of the home improvement business. Learn why Keyword Connects is better and how we deliver qualified leads that convert to customers up to 80% of the time.
