Knowing The Importance Of Leads

December 19, 2005
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PITTSBURGH - Good leads. Bad leads. Generating leads. Sources for leads. Required number of leads for service techs, mechanical crews, and salespeople...

In the eyes of Alicia Bradshaw, a contractor just cannot dismiss the importance - or power - of leads.

The marketing manager for Lennox Industries demonstrated their value to more than 50 Lennox contractors at the Masters of the Game Conference.

"They can definitely put you over the top," said Bradshaw.

Generating Service, Replacement Leads

For instance, finding leads by using a tune-up or service offer gives a company the opportunity to educate customers that would normally wait until their systems become irreparable to replace them, she said. In her estimation, tune-up and/or service offers are more successful when presented in a letter format. However, postcards and newspaper advertisements can be successful in some areas, she noted.

If one plans to do the tune-up offer letter, Bradshaw suggested that each be sent to prospects that are either single-family residences or owner-occupied homes.

"Homes targeted with tune-up offers should be 2 to 3 years newer than the homes targeted with re-placement offers," she said. "Tune-up offers should be sent to 5- to 7-year old and older homes. This allows a company to build a base of maintenance agreement customers that will become targets for replacement sales in future years."

In her estimation, replacement offers are also more effective in letter format. Each offer, she thought, should include cash back or some type of incentive. Each replacement letter should also go to single-family homes and owner-occupied homes, as well as to homes aged 7 to 12 years and older.

There are also indoor air quality (IAQ) offers, which can be made on postcards or in the newspaper. The more graphic the message, the more persuasive the message, she said.

A technician’s presence in a customer’s home “is an opportunity to create leads,” said Alicia Bradshaw, marketing manager for Lennox Industries. In her estimation, techs should take the time to educate the consumer on the options available to them, and how additional products might benefit them. “This information should never come across as a sales push, but as free, friendly advice from an expert,” she said.

The Importance Of Techs

A technician's presence in a customer's home "is an opportunity to create leads," commented Bradshaw. Leads can be generated for maintenance agreements, next-season tune-ups, system replacements, or IAQ products. In Bradshaw's world, technicians should be able to talk with customers about their HVAC systems. They should take the time to educate the consumer on the options available to them, and how additional products might benefit them.

"This information should never come across as a sales push, but as free, friendly advice from an expert," she said.

According to her research, leads generated by service techs have a higher closing ratio, are from more loyal customers, and are easier up-sells. One approach to developing a marketing budget is to assess the number of leads the business needs to keep service techs and comfort advisors (or, salespeople) busy every hour that they are on the clock, she said.

"The average cost per lead should be between $100 and $200," she said, adding that those numbers can be modified based on medium costs.

To calculate the number of tune-up leads needed each week, Bradshaw suggested a contractor multiply the average number of service tickets each tech can handle per day by the number of techs. Then, one should multiply that by the number of days per week. For example, if a contractor has one service tech who works five days a week and performs an average of four tune-ups per day, that tech needs 20 leads per week to remain busy.

Meanwhile, replacement sales leads follow a different formula. To calculate the number of sales leads needed each week, a contractor needs to multiply the average number of sales calls each comfort advisor (or, salesperson) can make each day by the number of advisors. Then, multiply that number by the number of days per week they work. For example, if a contractor who has only one salesperson who works five days a week and averages three sales calls, that salesperson will need 15 leads per week to remain busy.

"Maintenance agreements are not a major factor when planning sales lead needs, but it is important to keep in mind the number of sales leads your technicians generate from their service calls," said Bradshaw, adding that one should include leads from Yellow Pages, newspaper ads, and referrals when planning how many are needed from a particular marketing channel.

Marketing Channels

After determining how many leads are needed each week for techs and salespeople, it is important to understand response rates of various advertising and marketing channels, she said. This will help a contractor determine how much he/she must invest in each channel "to yield the desired results." The available channels include direct mail, advertising, trucks, home shows, editorials in newspapers, radio shows, public speaking, and telemarketing.

According to Bradshaw, direct mail is the most effective and efficient way to contact one's potential customer base "because it can be targeted to homeowners, specific ZIP codes, homes of a particular age, or any other qualifier that sets someone apart as a prospect for your company's services." Among its advantages include the fact that offers can easily be changed to suit seasonal shifts, response rates can be measured and verified, and this process can be outsourced.

Bradshaw recommended that contractors run marketing campaigns 52 weeks each year. As a tip, she also said the average price for a letter in black ink should be at or below $0.37 each (postage included), depending upon the quantity of the order.

In regard to newspapers, Bradshaw considered this medium more efficient than electronic or outdoor media "due to the length of time a newspaper stays in the home." She stated that newspaper ads have a per-lead cost comparable to or lower than direct mail. If using newspaper advertising, Bradshaw reminded that newspapers are not specifically targeted to homeowners, and many subscribers can be outside the contractor's area.

She did note that when a business develops a good contractual relationship with a newspaper, "great things can happen." She noted that many local newspapers offer "remnant space." Here is where a contractor can negotiate prices in advance for an ad, as last-minute ad space can pop up in a newspaper.

Bradshaw also noted that newspapers are always looking for story ideas.

"Work with your local newspaper editors to contribute newsworthy information about HVAC systems," she said. "The energy efficiency rating system is a good example of an article idea that can run each year."

More Ways To Get Noticed

During the course of her talk, Bradshaw zeroed in on Yellow Pages advertising. Some contractors in the audience questioned its value, especially with the use of the Internet in today's society. Bradshaw admitted this medium can be expensive, and if an error is made in an ad, it cannot be corrected for a year or longer.

She did point to the Internet to be an additional "front door" for a contractor's business. In her estimation, there is no reason why a contractor should not have his/her own Web site, which should contain, at minimum, services, hours, and contact information. While she liked the 24/7/365 availability of the Internet, she warned that a Web site, by itself, is not enough to generate the number of leads a company needs. "Web sites should be used to supplement other forms of marketing and advertising."

In regard to radio advertising, she noted that broadcasting has become "narrow-casting" over the last decade, meaning there are many stations that cater to specific groups of listeners. Meanwhile, she said television is a prestigious place to advertise, but "it takes a lot of money to buy enough of the desirable time slots to get your message across to your targeted consumers." She noted that five spots on the local evening news can cost in excess of $1,000, "and you need to repeat the message over a period of weeks to make this type of advertising effective."

In the end, like investing in a 401k plan, diversifying one's advertising budget is the best way to go, she said.

"Pick at least three [channels] and stick with them," she suggested.

Publication date: 12/19/2005

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