Where Leads for Contractors Come From in 2012

Where Leads for Contractors Come From in 2012

What a difference a few years make. As some of you know we survey lots of residential construction businesses to understand where leads come from (as well as other B2C business owners and managers)

Marketing Plan

This year Contractor leads come from…

1.)    Referrals from former customers

2.)    Internet marketing. This includes PPC  SEO and Social web sites ( Neighborhood sites being much better than face book and the big brands)

3.)    Individual direct mail Programs

4.)    Business relationship referrals. Lead groups, other businesses you know

5.)    Print.  There are actually a few print magazines that contractors are getting a positive ROI from!

6.)    Co-Op Internet and programs. Service magic, Team Dave Logan, and a few others still can provide a positive Return on Investment

7.)    Trade Shows

With the above information, here is what a residential contractor can be doing in the Sales and Marketing area to generate leads and new business. It should be noted that each area takes a well thought out plan and execution to include unique offers, a buying process, structured sales integration and a call to action.

contractors

 

  • A formal referral program.
  • A PPC, SEO and Social program. (In that order), You need PPC for SEO until it kicks in.
  • Neighborhood, highly targeted post card or letter campaigns quarterly
  • Be active in the Business community around you through networks.
  • Advertise only in PROVEN print media.
  • Use Co-Op Internet programs sparingly and carefully

The significant difference in lead generation from just a few years ago is this. Successful contractors and business generating leads in the B 2 C area today need to incorporate at least 4 of the above mentioned lead generating tactics.  Not true a few years ago, when referrals and great Internet (or one of the other tactics) might be enough grow your sales and revenue.

There are exceptions, and they are worth noting.  We work with several companies that still develop significant leads and sales from referrals and Internet only. And that can be accomplished with the right budget. If you can spend a bunch, and find the right message and media to communicate that message, then your lead generation becomes more one dimensional and less complicated.  In most cases we see a B 2 C company will not have the budget to test the message and several “reach” systems.  The truth is a company will generally throw a lot of money at figuring out what works and what doesn’t work.

ppc-keyword-research-strategies
ppc-keyword-research-strategies (Photo credit: Search Influence)

That’s where our company comes in. We have those answers, and that allows our marketing to hit the ground running.  You still need a marketing budget. It amazes me how many small companies don’t have one. Marketing… is just buying customers.  Note the word buying. A minimum budget for monthly marketing and lead generation needs to be $700.00 for a small residential B 2 C business.  It really should be 4-8% of your Gross sales.  So if you want to do $1,000,000.  In sales over the next 12 months, you need to budget and SPEND $40,000 to $80,000 in marketing dollars.

Don’t have that budget?  Find it, or be satisfied with the 400K your referrals bring you every year. Worried your new customers won’t pay a little more for you to develop an advertising budget?  They will.  Although you hear that price is the number one reason people don’t buy, we know that’s not true. The number one reason a customer doesn’t buy from you is you were out sold by a competitor with a better sales and marketing system, and sometimes that means they have a better operating process that allows then to out sale you.

If you are sure that your type customer won’t pay a little more then you have two choices. One, change who you market too. We all know there are people who buy price. If that’s who you constantly attract, then you need to change your message, and sales process to weed them out.  You are far better off selling 1 customer a week at margins that support a marketing budget, than two a  week, that do not.  The price buyers can also force you into doing some or all of the labor yourself to make any money. In that case, you don’ have a business, you have a very low paying job you built for yourself.

You can also find the marketing dollars by reducing your expenses.  Better and faster job completion is the number one way to reduce expenses. If you don’t understand how finishing and collecting 100K in projects in a month isn’t less expensive than finishing and collecting 60K  then you need call me, or get to a business coach. THE NUMBER ONE FACTOR in your company’s margins / profitability is speed of completion of your projects.

English: Table 4: Example of a profit and loss...
English: Table 4: Example of a profit and loss calculation. Belongs to The Organic Business Guide. (Photo credit: Wikipedia)

Here is a quick example of what that means. You complete 60K in a month.  Your margin is 25% or 15K. Your fixed expenses are 7K. . You have 8K left.

You complete 100K in a month. Your margin is 25% or 25K. Your fix expenses are the same…7K you now have 18K left.

The objection I hear to this is yes, but you have to have the jobs. YES. That’s why you need the marketing dollars! Buying leads and customers, and finishing the jobs quickly is the answer to all of your financial concerns.

Feel free to call me at 303-500-3053 ext 1 if you want to hear more, or discuss any of this.

 

 

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5 thoughts on “Where Leads for Contractors Come From in 2012”

  1. We have found this to be so true. Our business ha expanded as we opened new marketing avenues and stuck with them. Basement Finishing is very competitive in Denver, and a company needs to stay ahead of the game when it comes to lead generation!

  2. The vast majority of our work comes from referrals. We do use Print now and then, with some good results. Interesting blog.

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