Almost every prospective client that calls me says something like this "I need more leads."
I think that most people mean "I need more quality leads."
Fundamentally there are really only 3 ways to increase your sales:
1. Increase your leads
2. Increase your closing success
3. Increase your prices
So let's start with a basic principle by setting your lead generation goal. A very smart business coach once told me when I was starting out "If you don't know where you are going, any road will take you there."
Step 1: Put together a chart of what your sales look like right now.
Break the sales down into types of projects or services. Make sure to include the average sale in each category. The idea is to find out the average value of each lead that you closed.
Step 2: Summarize the number of leads you received by source, the total clients you closed by lead source and the total sales by lead source.
Here is the setup of another simple chart you can use:
For example:
Most contractors will close a very high percentage of referrals - most likely in the 70% to 80% range.
Leads from lead sources like Service Magic are likely to be much lower - most likely in the 10% to 20% range.
Yard signs typically yield a higher closing rate because prospects can usually see the work or may have some other connection to the client or area.
Directories by their nature tend to generate more price shopping but you can minimize this issue if you put into place the strategies and tactics discussed in later sections.
Why it is important to track the number of leads by each source and also your closing success? The reason is simple; it takes a lot of time to respond to each lead. When you know your success rate by lead source you can focus your efforts on getting more leads from the best sources. These will be your quality leads.
Step 3: The last thing that you need to do is to match up the amount of resources that you are investing in to each lead source. It is important to consider how much time is involved to generate each type of leads. It may be tempting to put a low dollar amount on the cost to generate referrals but that ignores how much time may be necessary to generate those referrals. Lead or referral groups typically don't cost a lot in dollars but the time investment can be high.
The primary reason you need to estimate your time is because time is a scarce resource and you have a lot of other demands on your time. If each referral takes an average of 5 hours to generate it and you only have 5 hours a week to devote to lead generation then that may or may not be the best use of your time each week.
Step 4:
Then break it down by lead source to determine what mix of increases (or decreases) will get you to your overall goal. The reason I mention decreases is because you may have a lot of leads coming from a particular source but have a low closing rate or a lower average profit for those projects. In this instance you probably want to eliminate some of those leads or figure out if there is a way to up your closing rate and profits on these leads.
The lesson is that you may be keeping busy and bringing in business. Unfortunately, if that business isn't profitable or is at a lower profit level than the rest of your business it isn't where you should be spending your time.
Step 5: Investing your time and your money in the sources that provide the best return on your time and money should be your next decision.
Once you have established your overall goal and the specific goals by type of lead source you can put the strategies and tactics in place to maximize your efforts.
Call for a FREE Marketing Evaluation Call. In about an hour, I'll walk you through the process I use with all our clients to make sure they're spending the right amount of time, effort and money to get all they can out of all they got.
Until next time, I wish you much success,
Mike Jeffries
866-926-5100
