Occasionally, we get a chance to talk to our friends in the industry about topics that are important to home pros. Recently, we sat down with Todd Bairstow, founder of Keyword Connects, to talk about the complexities of online marketing for home improvement companies.
According to a recent survey by Qualified Remodeler, one of the top challenges for 25% of home improvement companies is generating leads for new business. Despite a good economy, why do you think this is the case?
Since we started over ten years ago, we have seen some radical changes in how home improvement companies have been able to market. Until 2006, “old media” was still very viable for home improvement marketers. TV, radio, newspapers and direct mail were still delivering reasonably priced leads with profitable conversion. At the beginning of the financial downturn in 2007, that dynamic changed. Those old media vehicles saw significantly lower conversion and didn’t deliver leads at a profitable number. At the same time, homeowners went online in massive numbers, and that’s where leads became profitable again. That shift in media has been so difficult for mature home improvement businesses to handle. Add ever-greater competition and more fickle consumers, and together that makes lead generation a real puzzle for most companies.
Why do you think there is a love/hate relationship between home pros and lead generation companies?
The lead generation companies are to blame. For many years, there have been a couple of large home improvement lead generators who have sold high volumes of leads that are low quality. Plus they sell them to direct competitors at the same time. And there have been hundreds of fly-by-night lead sellers who have jumped into the home improvement space, sold a lot of questionable leads, then left never to return. It really dirtied the waters. Yet home improvement companies have become addicted to the “cheap leads” because they keep coming and coming.
Should home pros tackle online marketing themselves rather than go to a lead generation company?
The best solution is to do your own online marketing with regards to your own web site plus an e-mail program, then add online lead generation to the lead mix. Like all other marketing channels for home improvement, a balanced mix is the best, least volatile approach. I’ve heard of clients who only use our leads, and while I’m happy that it’s working, I also shudder a little bit in that it leaves that business too reliant on one source. Just the way any business has to learn how to do television, radio, home shows, etc., they can also learn the basics of Web marketing, particularly when it comes to their own web site.
What are some questions they should ask before partnering with a lead provider or lead generation service?
The first and most obvious question is: “Who are you selling these leads to?” Is it exclusive? Three competitors? 5 competitors? Competing against two other competitors is much different than competing against 8 other competitors. I once heard of a kitchen remodeling lead from Los Angeles being sold a dozen times. That makes it pretty tough to get into the house.
Next, “How was this lead generated?” What web site did it come from? What categories did the homeowner apply to the lead? It is a repair lead, or a remodeling lead?
What percentage of leads come via the telephone? Telephone leads tend to have very strong intent…but many lead providers don’t offer phone calls. It’s a very strong source.
Most home improvement companies get leads from referrals and repeat business. Why do you think they should diversify their sources for their leads?
Referrals and repeat business are the foundation for any home improvement company. But to scale and grow, those companies need to constantly add new leads and homeowners into the mix. There’s a glass ceiling to the strategy to just selling to those you know. In order to grow, adding more names to the funnel is crucial. After they are happy customers…then you can grow even further through referrals and added products. Adding more sources grows the entire pool.
How important is it for home pros to track the sources of their lead generation efforts?
This is key. I speak with a lot of folks who “go with their gut” in terms of what’s working. With today’s technology, most home improvement companies don’t need to do that any longer. You can easily follow the number of leads that come in through each media source very specifically. It sounds like a lot of work, but with a strong CRM system, it’s much easier than folks imagine – even non-technology people. Again, you can grow… to a degree without tracking lead generation channels. But every home improvement company that has grown to 8 figures has tracked their lead generation sources very, very closely to make sure that they are spending marketing dollars wisely.
What are some best practices when it comes to getting the best return from a lead provider?
The first thing I would say is to share numbers with your lead provider and be sure that they know you are accurately tracking what’s happening with their leads. We are always working with our clients to be sure that our leads are setting into appointments at a high rate, then driving enough sales demos and closes to be profitable. If you can’t share performance with the lead provider, they’re not going to be able to optimize their leads for you. Good partners will work with you to refine the process so you’re paying for leads that are most likely to set and sell, while reducing leads that don’t perform.
About Keyword Connects
We’re a performance marketing company serving home improvement companies. In short, we connect our clients to homeowners searching online for products and services they sell. LOTS of them.
Connections to homeowners that typically set into in-home sales appointments at 60-80%. That’s the best rate in the business.
We have a unique approach to online advertising for home improvement companies. And one that really works. For over 400 clients across the country.
We’re particularly proud that all 25 of our first 25 clients when we launched 11 years ago are still with us today. How’s THAT for client retention?