MarketSharp is a leader in providing CRM systems for the remodeling and home services industry. They’re in the business of acquiring, reporting and aggregating sales and operations data across thousands of home improvement companies.
In particular, they have a front row seat when it comes to understanding which tactics are the most successful at generating leads.
Recently, MarketSharp analyzed a year’s worth of sales and lead generation data for ten randomly selected clients. These clients varied in size, some as large as $30 million in annual revenue.
Here’s the headline: Across all companies analyzed, the top three lead sources accounted for 70% of total sales.
This is how it breaks out and what it means for you…
#1. Online Leads: 32% of all revenue
It’s no surprise that this category, which includes paid search, SEO and social media, accounted for nearly a third of total revenue across the companies that were analyzed.
Google alone is the source of over 3.5 billion searches daily. Further, it commands 91 and 81 percent market share of searches on mobile and desktop respectively.
It’s where homeowners go when they are ready to research and purchase. There’s no question that home improvement companies need to be active and visible online.
#2. In-Person Events: 20% of all revenue
This category, which includes home shows, canvassing and showrooms, came in a strong second.
In-person events are inherently local and face-to-face. Their 20% share reinforces the industry truism that homeowners want to do business with local companies.
It also highlights the importance of staffing events and shows with personable, outgoing, well-trained sales reps. The benefits are huge for those companies that can take full advantage of these “handshake opportunities.”
#3. Referrals: 18% of all revenue
I was happy (but not surprised!) to see this old standby fare so well.
Referred leads have always had the highest close rates. There is no stronger sales tool than the enthusiastic recommendation of a family member or close friend.
And remember, unlike most marketing activities, referrals cost you nothing if the sale doesn’t close. So be sure to optimize this tactic by providing attractive incentives to those homeowners who are willing to spread the word.
It’s worth noting as well that despite the impressive numbers, most home improvement companies don’t invest enough time or effort in maximizing referrals. The leaders in this area have learned to create a “referral state of mind” internally. One in which every employee, at every opportunity, asks the homeowner for a referral. It requires training and repetition, but as the 18% stat above reveals, it can pay off big.
The Proof Is In The Numbers
As we discussed in Measuring and Managing Cost Per Lead, there are many variables at play when analyzing cost per lead and contribution to revenue.
Every company and market is distinct, with its own history, customer base and local quirks. Maybe your “top three” lead sources are different.
But different or not, as this analysis demonstrates, just a few tactics can have a disproportionate contribution to your overall revenue. Make sure you are smartly allocating your two most scarce and precious resources: Money and People.
Take the time to run your own numbers. Are you spending marketing dollars based on “That’s what we’ve always done”? Or, are you investing in the areas that are demonstrably most productive?
Consider training dollars, too. For example, if you want to drive more online leads, you need employees who are up to speed on Google, Facebook, SEO and social media.
As service businesses, we have a tendency to focus on those who do “visible work.” Sales people knocking on doors; installation staff climbing ladders; customer service folks picking up the phone.
All good and vital. But don’t overlook the people on the inside who make the wheels turn.
Staff your business appropriately with professionals who bring marketing, internet and analytic skills. If this is what now drives your business, feed the beast and double down in these newer areas.
Tighten Up Your Reporting
When it comes to identifying the most productive lead sources for your home improvement business, your mileage may vary. But you won’t know that if you don’t track it.
Invest the time, money and effort needed to generate accurate and up-to-date reports. Then, once you are clear on your own top three, make sure you are giving them the attention and resources needed!
P.S. MarketSharp is the industry leader in CRM systems. Learn more about how you can tighten up your reporting, here!