Podcast Summary: Owned and Operated - Episode #151: From Leads to Revenue: Maximizing Your Marketing ROI with Sam Preston
Released on November 12, 2024
Introduction
In Episode #151 of the Owned and Operated podcast, hosts John Wilson and Jack Carr delve deep into the intricacies of maximizing marketing ROI for plumbing, electrical, and HVAC businesses. This episode features Sam Preston from Service Scalers and includes insightful discussions on lead generation, SEO strategies, tracking key performance indicators (KPIs), and scaling home service businesses effectively. The conversation, which originated from a livestream event in October, also addresses live questions from listeners and members of their Facebook group, offering best-in-class marketing advice tailored for the home service industry.
Dynamic Lead Tracking and ROI Focus
John Wilson kicks off the discussion by emphasizing the importance of dynamic lead tracking and understanding where leads originate:
"Being able to be dynamic and know where your leads are coming from is so important. You need a good website. You don't need the sexiest website ever. Know your numbers, stay accountable."
— John Wilson [00:00]
John projects Service Scalers to reach $2 million in revenue for the year, highlighting the significance of accountability and accurate lead tracking in achieving such ambitious growth targets.
Sam Preston shares his positive experiences partnering with Service Scalers, noting significant improvements in their Google Ads, PPC, and SEO efforts:
"For going on two years, I've partnered with Service Scalers to do our Google Ads, PPC and SEO and the results have been huge."
— Sam Preston [00:26]
Sam credits Service Scalers for elevating their website rankings and outpacing competitors who rely on legacy marketing companies.
SEO: Long-Term Investment vs. Immediate Needs
Mitch raises a critical question about the necessity and time investment of SEO:
"Is SEO really needed when it seems to take so long to spin up and be such a long game?"
— Mitch [01:16]
John responds by outlining that SEO is most beneficial when a business is poised for growth but not yet at capacity:
"SEO makes the most sense when you get to a place in your business where you start wanting to invest in future you."
— John Wilson [01:24]
He further explains that approximately 80% of their SEO clients achieve their target lead volume, making SEO a robust strategy for sustainable growth.
Mitch shares his experience competing with a long-established company in SEO:
"There's a company in our market that was really early to the SEO game 10 years ago, and they're still kicking my butt on SEO."
— Mitch [02:36]
John counters by stressing the importance of aggressive and consistent SEO efforts:
"If you're only doing two articles a month, literally everybody's doing that. You can't win. ... We want to, at a minimum, 10 articles."
— John Wilson [03:46]
He advocates for producing a higher volume of quality content to outpace competitors and maintain top rankings on search engines.
Tracking Key Performance Indicators (KPIs)
Mitch inquires about the top KPIs businesses should monitor daily:
"What are the top KPIs I need to track daily for my marketing?"
— Mitch [05:06]
John emphasizes that all marketing efforts should ultimately tie back to ROI and revenue, suggesting that businesses focus on:
- Number of Leads Generated
- Appointments Scheduled
- Revenue Derived from Leads
"How many leads do we generate? How many appointments do we generate? How much revenue did we generate from that? Those are the most important."
— John Wilson [05:13]
Mitch concurs and adds the importance of tracking book rates by lead source:
"What's your book rate? ... ideally, book rate by channel, that's what we really like to look at."
— Mitch [06:29]
He shares an example where adjusting service fees for LSA leads significantly improved their book rate, demonstrating the practical application of KPI tracking.
Effective Lead Source Tracking
John underscores the necessity of accurately tracking lead sources, especially with changes in Google Analytics:
"Know the source of those leads is super important as well... sometimes it’s just making sure you have your tracking set up correctly."
— John Wilson [07:46]
Mitch provides actionable advice on differentiating phone numbers for various lead sources to streamline tracking:
"The phone number you have on your trucks should be different than the one on your website... that way, anytime a lead comes in via call, you know exactly where that lead came from."
— Mitch [09:04]
This strategy enables businesses to precisely identify and optimize the most effective lead channels.
Cost Per Lead (CPL) and Customer Acquisition Cost (CAC)
Mitch poses a question regarding industry benchmarks for CPL and CAC:
"What is best in class? Cost per lead and CAC, which is cost per acquired customer for new install leads across channels."
— Mitch [15:35]
John responds by highlighting the variability across different markets and emphasizes working within one's cost structure:
"It's really important that is it costed in your job, like what's the most you can pay. So instead of like how do we pay the least amount for a lead, how can we pay the most and how can that be costed into our structure?"
— John Wilson [17:46]
Mitch elaborates on calculating CPL based on average ticket sizes and conversion rates, advocating for a backward calculation to determine acceptable lead costs:
"If I have a water heater replacement... closing rate on water heaters is 60%, so I could pay like $130 for the lead, and I feel good about that."
— Mitch [19:06]
This approach ensures that lead acquisition costs are sustainable and aligned with revenue goals.
Handling Seasonal Fluctuations and Shoulder Seasons
The hosts address the challenge of maintaining lead flow during off-peak months, known as shoulder seasons.
Mitch discusses the inevitability of seasonal variations and the need for strategic planning:
"Shoulder season exists, and there is literally nothing that any marketing agency will ever do for you that's going to solve the fact that April and September are months in the year."
— Mitch [27:00]
He suggests maintaining consistent marketing efforts and exploring alternative strategies such as membership plans or tune-ups to sustain revenue during low-demand periods.
John adds that SEO can serve as a buffer during shoulder seasons by investing in long-term keyword growth:
"SEO is one of those things that will help you in that shoulder season."
— John Wilson [29:37]
He also mentions recent changes in Google's API indexing, which affect how quickly new content is recognized and ranked, urging businesses to adapt their SEO strategies accordingly.
Growth Strategies for Home Service Businesses
The conversation shifts towards strategies that enable businesses to scale rapidly.
Mitch introduces the concept of "cumulative advantage," where continuous small improvements lead to significant growth over time:
"There's like this cumulative advantage where, if every single day I come in and improve something by like 1%, 1% is a lot of money."
— Mitch [35:21]
He attributes Service Scalers' rapid growth to consistent lead generation, operational improvements, and strategic investments in marketing and infrastructure.
John concurs, sharing his experience in scaling Service Scalers from $10K in January to a projected $2 million in the year:
"Know your numbers, stay accountable, make sure that you, your team knows that too. You owe it to yourself and your team to get bigger."
— John Wilson [39:09]
He highlights the importance of regular team meetings, setting quarterly goals, and maintaining accountability across all departments to sustain growth momentum.
Mitch emphasizes the necessity of building a robust operational framework to handle increasing leads and maintaining high conversion rates:
"The machine that you build has to be able to effectively spit out sales once you get those leads. And that's the real thing that you're building."
— Mitch [35:21]
Best Practices and Final Insights
Towards the end of the episode, the hosts address additional questions related to the viability of marketing services for small businesses and the future of Local Services Ads (LSA).
Mitch asks if businesses are too small to afford marketing companies like Service Scalers:
"Is there such a thing as a business being too small to afford a marketing company like Service Scalers?"
— Mitch [21:20]
Sam Preston responds by sharing a case study where implementing Hatch software significantly improved workflow and customer engagement:
"We had just switched over from another vendor and Hatch's user interface was so easy. It automated the workflow of five or six employees a day."
— Sam Preston [21:34]
This example illustrates that even smaller businesses can benefit from strategic marketing investments when paired with the right operational tools.
Mitch inquires about the future of LSA amidst potential regulatory changes:
"Is LSA dying? ... Will that affect things like GMB and LSA?"
— Mitch [24:24]
John reassures that LSA is not dying and remains a crucial component of Google’s marketing ecosystem, despite evolving features and slight fluctuations in lead volumes during shoulder seasons:
"LSA is definitely not dying. If anything, Google is pushing further into that."
— John Wilson [25:07]
He advises businesses to stay updated with Google's changes and adapt their tracking and marketing strategies accordingly.
Conclusion
Episode #151 of Owned and Operated offers a comprehensive exploration of maximizing marketing ROI for home service businesses. Through expert insights from John Wilson, Jack Carr, and Sam Preston, listeners gain valuable knowledge on effective lead generation, the strategic implementation of SEO, meticulous KPI tracking, and sustainable growth practices. The episode underscores the importance of understanding one’s market, investing wisely in marketing channels, and maintaining operational excellence to achieve and sustain substantial business growth.
For more information, visit www.ownedandoperated.com.