I heard some shocking stats recently while listening to a marketing podcast and immediately went scrambling to research and confirm if they were true: Most incoming leads a business receives are wasted. More than 70% of them, to be exact. By ACCA’s last estimation, the average cost per lead in the HVAC industry is $250-$300. If that’s true, the thought of watching 70% of these valuable leads evaporate due to neglect is not only shocking, but borderline criminal.
Countless agencies offer solutions hoping to improve your incoming lead conversion rate by a point or two. Expert business consultants spend costly hours training entire sales forces to move their closing ratios from 12% to 15%. But without a doubt, the most common questions you’ll hear from business owners are: “How do I get more customers?” “Where can I find more qualified leads?” and “Can someone fix my lead flow?”
And reality strikes us pretty hard when we look at these statistics. Are we asking for more customers while ignoring the one standing at the door, wanting to buy?
The guys over at IRC Sales Solutions broke this down much more fully on their podcast, but the stats were alarming. Through their research, sales conversion is 9 times more likely if the prospect is responded to in the first five minutes. Average response time? Seven hours and nine minutes. Only 2% of sales were closed on the first phone call, yet over 60% of the leads were never contacted again. And now for the worst stat: 71% of incoming leads were never contacted at all. At all.
Now I’ll throw in a disclaimer here. These statistics were pulled from a wide range of businesses — everything from insurance agencies to clothing boutiques. So, not all of this directly applies to in-home contractors, but I won’t let you off the hook completely. I think I know enough of you well enough to assume you aren’t out there just letting the phone ring off the hook without caring, even during a busy summer. But you, too, might be wasting far more opportunity to cash in than you care to admit by not following up.
First, let’s talk about processes. Many of you have CSRs or at least contracted answering services to handle inbound calls, so you have the first contact covered. Hopefully these employees are well trained to gather contact information first. If not, that’s step one and absolutely vital. Whether through the website, chat bot, or an incoming phone call, if someone is reaching out to you, then they likely don’t have many reservations about giving you ways to contact them further. Take advantage of that, then use it!
Follow up quickly, and slowly. IRC’s research showed that only 3% of leads were ready to buy after first contact, and most were just asking questions to help them along in the buying decision. So, just because a prospect doesn’t book an appointment with you on the spot does not mean they won’t be ready later! Add the customer to an email list, call list, and — most importantly — to a database for further contact. Many of you have had busy summers and have had to turn away business due to staffing issues, but slower times are coming. Just because you had to tell a customer no three weeks ago does not mean they immediately called a competitor and got their issue handled. Keep that number and note, call them up, apologize for not being able to see them earlier, and ask them if they still need help. Worst case scenario, they’ve already had their problem resolved, but you’ll still leave an impression on them — likely showing more care and concern than any other company did.
Follow up after the sale, too. This mistake might be actually more egregious than letting 70% of potential new customers slip through your fingers. Far too many contractors assume once they’ve done business with a homeowner that they automatically become customers of theirs for life with no additional work. No matter how you did your job, that’s simply not true. Just because a transaction has been made and you have added them to your “customer” database does not mean you’ll get their future business. And you do want their future business, right?
Think about your current database. How many names and addresses do you have listed there who’ve used your company only once, maybe even twice, but there are year-plus gaps between? In the worst of cases, we’ve seen contractors run loss leader tune-up specials to get techs busy, but never got any more business out of that home. Sometimes it takes three, even four visits to recoup after crazy aggressive special pricing, and we’re all hoping to get that customer to hang around until they need a change-out. That doesn’t happen magically, and it doesn’t happen with only sales offers either.
How often does your database hear from you throughout the year? If your answer is less than four, I’ll tell you quickly that you’re letting your customers forget all about you, and that needs to change. But if you are interacting with them, ask yourself this: How many of those touches are sales solicitations?
Over-soliciting is a quick way to make further business vanish as well. The relationship after the first transaction must change. If we were supposedly friends and the only time I ever heard from you was because you were asking me for money, we wouldn’t be friends very long. It should be the same way with these established customers. They trusted you once, so continue to build that trust and don’t treat them like just another mailbox for your mass mailers. Friends seek to add value to the relationship, so if they feel your communication with them and their relationship with your company is adding value to their lives and families, they will gladly pay you back with further business.
Think about automating emails, print media, social posts, and other forms of communication with your base that shows your expertise while remaining unintrusive and not “pushy.” There is far more potential in your existing customer base and your unclosed prospect list than you ever dreamed of, but following up — and following up correctly — is the key to unlocking it.
Hudson,Ink has a simple program that automates customer retention emails, social posts, and newsletters to help you stay engaged with your database and get more value out of an ongoing relationship. If you’d like a free customer retention information kit mailed to you, shoot an email to firstname.lastname@example.org.