Fair market value for a qualified customer
As technology rapidly advances, so do the advertising companies that are desperately attempting to monetize the infinite amount of information that is collected. Everyone can clearly see that television, radio, and print advertising are slowly dying on the vine. The cost of said media is very prohibitive and the ROI is just abysmal in today’s day and age. Digital advertising not only offers you the best value for your dollar but it also allows you to diligently track your ads performance. No other solution has ever existed that is capable of providing such a service, but as amazing as it is, if you don’t constantly keep your eye on the ball you are just throwing money out the window.
Tracking analytic’s and making the necessary decisions to tweak your campaigns can be a full time job, and quite honestly it is something beyond most of our capabilities . Therefore, many roofing business owners elect to simply purchase their leads and let someone else worry about how they are generating them and for acquisition cost. This is a honest solution to a common problem, but once again, it is something that can just be a waste of money and time if not properly monitored. In the Michigan roofing industry, we have seen leads going for as much as $250 a piece. Nationally, they are averaging out somewhere closer to $66 each. Either way, this is a substantial investment that you are making per customer just for the opportunity to get in front of them. To properly manage your leads there a couple things that you can do. The first thing you need to do is set a monthly budget and stick to it regardless of the “opportunities” presented. These companies are pretty sharp and will do everything within their power to convince you to buy more leads from them. Show some discipline and don’t overspend even if business is slow, it is the only way to properly track your performance long term.
The next thing that you need to do is track every stat possible regarding these leads. How many came in last month? How many of those closed? How many could you not get a hold of? How many bids did you lose, and most importantly, why? This basic data will at least let you calculate closing ratios and a basic cost per sale. Best practice is to span this data over 3 months so that you have some good information to compare with for future performance. If you are not happy with the results in that time, dump the lead provider and look for someone new. Countless times we have tried to give it more time, or give them the opportunity to change their program to our benefit. Not once has this worked out, it just delayed the inevitable.
There is no correct answer when asked if you are paying to much for your roofing leads. You just need to ask yourself if you feel good about the return that you are earning and if the closing ratio’s are acceptable. If so, then keep it up because you will not find an easier advertising solution out there. If you feel like the quality is not there or they are just costing you to much in general, scrap the strategy and start fresh. There are a million ways for you to bring in more customers, decide what is going to best serve your company. Search for something that is going to be the most cost efficient, and require the least amount of time invested from you.