Stop Tracking Cost Per Lead (Track This Instead)

Summary

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Episode Overview

Title: Stop Tracking Cost Per Lead (Track This Instead)
Podcast: Owned and Operated
Hosts: John Wilson & Jack Carr
Date: July 16, 2026

In this episode, John and Jack challenge the home service industry's obsession with "cost per lead" as a central marketing metric. They advocate for a broader and more impactful approach to measuring marketing ROI, channel attribution, and operational success. Drawing on their recent explosive growth in HVAC, plumbing, and electrical, they break down tools, strategies, and KPIs that owners should actually measure to drive profitability and sustainable business growth.

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Key Discussion Points & Insights

1. Celebrating June’s Performance and Growth Metrics

• Massive Revenue Spikes:
  • Both teams experienced record-breaking sales in June, thanks in part to a heat wave.
  • Jack’s team nearly doubled last June’s revenue, with an 850K sales month (03:10).
  • John’s group came close to $4M in revenue: "3.7 is like... that's the amount of revenue we did in 2019 or maybe 2020... now we just did that in a month." (07:58)
• Cultural Wins:
  • Emphasis on the motivating power of team camaraderie, friendly competition, and shared scoreboards for momentum.
  • Jack: "We blew out our best month by I think like 200K." (02:27)
  • John, on company-wide momentum: "It's wild to watch and feel the momentum." (09:56)

2. Why "Cost Per Lead" Isn’t Enough

• The Problem with Focusing Solely on CPL:

  • CPL doesn’t capture lead quality or outcome.
  • High or low CPL alone can be misleading when not paired with downstream metrics like conversion rate and revenue.
  • John: “…cost per lead, like, that’s not the thing to measure. The thing to measure is ROI.” (22:22)

• Context Dependence:

  • Service channel, lead source, and response time matter more than the raw cost.
  • Jack: "You might get out, but you have the booking, but not the actual revenue generation cost per job. So it can get complicated quickly…" (16:45)

3. What to Measure Instead: Building a Full Scorecard

Must-Track Marketing Metrics (17:34)

• Cost Per Lead: one data point, but not the main driver.
• Cancel Rate from Each Channel
• Number of Sales from Each Channel
• Total Revenue from Each Channel

Next-Level Metrics

• Cost per booking
• Actual cost per job
• ROI per marketing channel
• Revenue split: new vs. existing customers
• Blended company-wide marketing ROI

John: "You can figure out ROI from there: how much did I spend on this channel this month? How much did I make? That will get you to your first layer of ROI.” (17:34)

Setting Success Criteria

• Productive marketing: minimum 5x ROI on spend (18:17).
• Regular review and benchmarking of every channel for returns, not just volume or cost.

4. Attribution: The Real Challenge

Attribution is everything, but it’s hard.

• Multi-channel influence is real (“Was it radio that drove my Google PPC click?”) and messy to unpick (18:58).

Practical Attribution Steps (21:46–24:34)

• Create a new customer report daily.
• Track lead source by phone number and CRM integration.
• Use distinct tracking numbers for every campaign/mail/drop.
• Consider secondary marketing CRMs (like Go High Level) for higher-fidelity marketing journey tracking.

Jack: "Making sure you have individualized phone numbers for every single different campaign... or just a way to track it." (22:48)

5. Understanding Blended vs. Channel ROI

• Blended ROI includes all direct and indirect marketing costs (software, agencies, brand, truck wraps, etc.), not just ad spend (25:18).
• Analyze contribution of paid, organic, new, and recurring customers to overall revenue.

John: “You want to be able to measure: what is your blended ROI across the business.” (25:12)

• It’s critical to break down these numbers further, to understand which marketing channels and business units are pulling their weight (27:43).

Jack: "Not all 5x ROIs are equal either." (29:15)

6. The Perils of CAC to LTV in Home Services

• Why standard SaaS mindset doesn’t fit:
  • In SaaS, churn and long-term retention are predictable; not so in home service.
  • Reacquisition of the same customer via paid leads is common.
  • Lifetime value is speculative in this industry and shouldn’t justify overspending upfront.
• Focus on payback at first visit, not assumed long-term value:
  • John: “You do have to reacquire the same customer. I don’t think you should worry a tremendous amount about LTV...” (33:29–34:24)

7. Takeaways for Action: Build a Better Scorecard

• All owners (not agencies) must own scorecard design and enforcement:
  • “As the owner, this is your job… You have to hold them accountable.” (37:46–38:12)
• What to include:
  • Number of calls
  • Number of appointments
  • New vs. existing customer revenue
  • Booking rates
  • Sales/revenue by lead channel (36:57–37:41)
• Don’t get stuck: Even basic tracking leads to big upgrades in marketing performance.

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Notable Quotes & Memorable Moments

• On record-breaking months:
  • John: "That was nuts. Your Google business profiles are either printing money or they're losing it."
• On the danger of focusing on cost per lead:
  • John: “Cost per lead, like, that's not the thing to measure. The thing to measure is ROI.” (22:22)
  • Jack: "It can get complicated quickly if you're not measuring the right things" (00:03)
• Accountability:
  • Jack: “As the owner, this is your job, buddy… Not their job. Your job. Yours.” (37:49)

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Important Timestamps

• June’s wild month recap: 01:08–03:35
• Celebrating record sales and culture: 03:36–10:06
• Lead attribution intro: 15:37–16:43
• What metrics matter: 16:43–18:17
• Attribution tools and approaches: 21:17–24:34
• Why CAC-to-LTV doesn’t fit home services: 30:08–34:24
• Building the right scorecard: 34:41–38:12

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Action Steps for Service Business Owners

1. Stop obsessing over simple cost per lead.

Focus on sales, revenue per channel, bookings, and true ROI.

2. Set up robust attribution.

Use unique phone numbers, tight CRM controls, or a secondary marketing CRM for every campaign and channel.

3. Build a strong marketing scorecard

Track bookings, conversions, new/existing customer splits, and per-channel ROI at minimum.

4. Take personal ownership.

CEOs/owners must know their own numbers—don’t delegate all marketing accountability to your agency or marketing manager.

5. Don’t use imagined LTV to rationalize overspending on customer acquisition.

Be disciplined in measuring and demanding fast, real returns on marketing spend.

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For more detailed tools, hands-on help with scorecards and attribution, or to join the team, email [e-mail] or check out upcoming events at ownedandoperated.com

Transcript

[A]

I think what people get stuck on is cost of lead.

[B]

It can get complicated quickly if you're not measuring the right things.

[A]

Number of sales from that channel, dollar amount of sales from that channel. That will get you to like your first layer of roi.

[B]

How are you tracking down specific campaigns

[A]

you want to be able to measure? Like what is your blended ROI across the business?

[B]

I love it.

[A]

Attribution is a very complicated process. Cost per lead, like that's not the thing to measure. The thing to measure is foreign. Welcome back to Owned and operated, a top 200 business and entrepreneurship podcast. I'm your host John Wilson and on this show we talk about how to build home service companies, oftentimes with examples and stories from my own. Today I'm rejoined by my somewhat frequent co host, Mr. Jack Carr.

[B]

I thought you were going to say somewhat friend. My heart sank. It hurt my feelings for a second.

[A]

Eff for life. My ride or die on the boat.

[B]

Let's do this.

[A]

Jack Carr.

[B]

What is up, dude?

[A]

Living it up. What it July 1st. So June ended. June was kind of a funny month we.

[B]

For in what way?

[A]

Well, it's so funny for I think a lot of reasons. So like temperatures were. So May was tough for most of the industry. Like H Vac wise it was kind of a bloodbath and I really need to start doing like industry news, like daily podcasts, like five minutes and today in H Vac it's a bloodbath. But yeah, May was kind of tough and then June weather didn't cooperate for most people that I know in the like the first half it was okay. There was a middle week that was super weird and then it went gangbusters for the last two days. Yeah.

[B]

Because we had a giant heat wave that just absolutely destroyed everything. But yeah, you know, I have a

[A]

friend that sold half a million and he's a 40 million dollar business. So half a million is like more than double his daily budget yesterday. Yeah.

[B]

All I, all I have to say though is again like I've been saying, if you, if you're a long term listener, like we haven't been ready the last four years for summer for like the first big heat wave and we're finally ready for it and you guys killed it. It feels as good as you, you killed it.

[A]

I need to like, can I screen share on this? Oh my God.

[B]

We blew out our best month by I think like 200k.

[A]

Yeah, dude. Okay, if, if you're not watching this on YouTube, I'm pulling up Jack Service titan right now.

[B]

This month Was better than our whole first year. One month be our entire first year of sales.

[A]

You guys, you guys killed good.

[B]

It's.

[A]

Yeah. Now we're, I'm, I'm screen sharing this right now.

[B]

Now we're hunting for a million.

[A]

Yeah. All right, so like if you're not watching on YouTube or like Spotify, I

[B]

think don't look at that one. That's our daily sales.

[A]

Oh yeah, yeah, yeah. Well ignore. Yeah, okay. Ignore that.

[B]

It's in the morning.

[A]

Well, no month to date. Okay. See this is what I, this is what I get for trying to navigate last month. Okay.

[B]

There we go.

[A]

So yeah, 850 in total sales. Dude. So close to a million. Just couldn't, couldn't get there. But like look at this freaking chart.

[B]

Yeah.

[A]

So if you're, if you're, not, if, if for some reason you don't, you're not watching this on video. Like June was 818, 000 in revenue. 850 of sales. And it was almost a double from last year's June.

[B]

Yeah.

[A]

Which was 428. May was up 40%. April was up 93%. 147 in March. So you've had a crazy year just in general. But like, yeah, June. June was nuts. June was nuts. Your Google business profiles are either printing money or they're losing it. And that's where Big Reputation comes in. Big Reputation turns your GBP into a true lead machine without adding more work to your plate. It runs in the background with automated posting, review generation and fast responses so that your reputation compounds over time. And this is huge. If you're multi location, they make it dead simple to manage and scale your reputation across every branch so every location shows up and wins in the map pack. I'm actually using Big Reputation right now as I grow and scale my newest acquisitions. Plus you get real insight into what's actually happening. You get to spot gaps with location, health monitoring, track reviews and sentiment and see which zip codes you're winning and which ones you're losing. Better insights, stronger trust. More calls from an asset you already own. Go check it out at bigreputation. AI/oao.

[B]

I think when I sent you mid monon June, I sent you a little secret that was like 98% you passed maybe mid month.

[A]

You were like, hey dude, just pass May. I was like, yeah, no big deal. It's fine. It's totally fine.

[B]

Yeah, it's exciting. It feels good. Feels good to have a team that's, that's executing and we still have Some, some opportunities. But overall it was crazy because I think the, the metrics I sent you were up 98% year over year. Probably more now that we finished the month out 98% year over year and we're up 24% on call volume. But yes, we're up like 68 on call conversion. Like it's crazy from like we locked in on converting bookings.

[A]

Yeah, no, no, you guys are, you guys are killing it. It's kind of awesome. But yeah, it was fun. So June, we don't have final numbers yet, which might sound ridiculous but like we don't actually know what revenue is yet because the size of our business, like there's multi days and like work in process. So usually it takes a couple days to like actually figure out what revenue was, which is kind of annoying because you want to just like open up Service Titan and like, you know, hey, what do we do? But I think Service Titan says like 3.35, but we have a brand on House Call Pro. So we have to add that in all that to say I think we're like 3 7. So we didn't, I know we didn't hit. And now we didn't hit 4 million but like dude, so close. And the funny thing about that is like our first $3 million month was this year.

[B]

Yeah. Two months ago it was like April. Yeah.

[A]

So the.

[B]

So like a big celebration everybody.

[A]

And like. Yeah, now we're like knocking down the door at, at 4. I don't know if we'll hit 4 in July. We will, we will in August because we have another, we're bringing on another partner at the end of July.

[B]

Yeah.

[A]

And that's, I think there are 8 or 9 million of revenue. So like we, but ideally we hit it right before that. That way we just know we did it. Yeah.

[B]

Not to mention, I mean like I said, we starting off July again at least in Nashville, but most the south with like, dude, 100 degree weather for the first like foreseeable 10 day forecast. We are booked solid. We're ready to go. So I'm, I'm, I'm thinking this is the month. This is the month we, we're going to hit a million and then we as the collective are going to hit four, which will be.

[A]

Yeah, awesome. Yeah, no, totally. I think, I think the most, I'm holding my breath on this. I don't think it's going to happen. But I think like what's even cooler, June, I don't think we hit a million ebitda, but I Don't think we're far off. Yeah. Which, like, it's always been interesting to, like, do an entire month's. Like, we. 3.7 is like. That's the amount of revenue I think we did in 2019 or maybe might have actually been. Yeah, I think that's about right. Maybe 2020. Because, like, so that. One month. But what's even. But, like, now it's like, okay, so when I first bought the business, we did a million of revenue, and we just did that in ebitda. A month.

[B]

Yeah.

[A]

Now we're talking.

[B]

You know, it's. It's funny because these. These are all of our vanity metrics. Like.

[A]

Oh, totally.

[B]

You just want the zeros, man. Just hit, like, I want.

[A]

I want to see two commas on that either, dude. Like, let's do it.

[B]

That is really cool.

[A]

Yeah. But I. I don't think. I don't think we're there, but. Yeah, we. Like, I. I'll keep you in the loop. I'll keep everybody in the loop. Did we hit it? Did we not? Pat sent preliminary numbers, and I'm like, I think you're just teasing me because I don't think this is real. But it was like. It was.

[B]

That's crazy. That's wild. I know. I need to find a few ad backs, and then we'll call it a day.

[A]

Okay. Yeah, yeah, yeah. John was tired. That's. That's an aback, right?

[B]

Yeah, like, his. John was out this month, so, like, definitely his salary gets all added back. Like. Yeah, yeah, yeah, yeah, yeah.

[A]

He didn't. He didn't. He hardly worked. Okay. So anyways, that was June. We're excited about July. July. We have a real chance at 4 for.

[B]

And if you want to join the team, we'll take a second here to say if you want to join the team, reach out to Jack or John and help us.

[A]

We have to pitch. We have to pitch.

[B]

It's also a lot of fun if you can tell, being working with people that you actually like. So.

[A]

I agree with that.

[B]

Yeah.

[A]

Well, it. It is pretty fun. Like, we. We have. So we have. We've done four partners this year, and we're like. Our fifth is in July. So this month, which. That's pretty cool. It's at the end of the month, and then we're like. Our seventh is already, like, set, I think, and we're really, really excited about that one. That one's gonna be a lot of fun. And then, like, we're starting to talk to number eight, and it is definitely Wild to watch, like, watch and feel the momentum.

[B]

Yeah.

[A]

It's really interesting. It's interesting to, like, be building. And I think. I honestly think what I was. I was talking to somebody about this the other day. I think that this isn't even a pitch. This is just, like, I'm complimenting you here for a few minutes. So I think what has. Yeah, like, get. I think what's been really interesting is, like, as I think about, like, how has this year been successful so far, which obviously, like, we're gonna two and a half times, and we started at around 30 million, so that's not, like, gonna be easy. No matter what way you think about that. Obviously, like, we're working really hard this year. We are running. But when I think about, like, who the ideal person is, like, it has been you, and it has been Jeremy on your team and David and Chris and, like, the team.

[B]

Yeah.

[A]

And I think that, like, there's sort of this component of, like, how do I work with people that I like to work with, which is a really good part, but, like, how do you work with people that are, like, smart and driven and, like, want to kill it together? And, like, that's been the superpower is you just blew out June in the most ridiculous possible way. Like, that was crazy. And, like, we got to partner in on that, and I. I just think that was. I think that was really cool, and I don't know. So, yeah, that. That's been fun for me, and I think that's a. Been a big part of, like, how the train has stayed on the track this year is like, when we. When we bought most of our businesses over the years, we came in and replaced the leader just because they were so small. They were, like, two or $3 million businesses, and the guy was retiring. But being able to, like, partner with you has been, like, a totally different experience for the better by far.

[B]

We've been able to push culture in a way that I didn't expect and that everybody is all on board the train pushing in the same direction.

[A]

It's crazy.

[B]

And if you're guys listening, I. I hope he takes this the right way. But, like, I was giving my. My sales guys, my comfort advisors a bunch of about, like, hey, you guys got beat by a guy that's been a door sales, door knocking guy for

[A]

the last, you know, he's only been

[B]

in h a month.

[A]

Tyler is a baller.

[B]

Tyler's a baller.

[A]

Tyler's a baller.

[B]

But, like, they're all chasing this guy that they've Never met. They've never seen.

[A]

I think he hit second last week or last month.

[B]

Yeah, he hit second, my guy. We had two out of five top people in the company, and our third guy was only. He only missed by 9k to beat the top five, so we almost had three out of five.

[A]

That's good, man.

[B]

But point being is, like, the. The. Like, the. The culture around having somebody to friendly chase.

[A]

Oh, yeah.

[B]

Has been fun. It's not like they. They don't like. Like, they. They. They're happy to be a part of, like, something that is. I don't want to call it gamified, but, like, there's a gamified experience.

[A]

Well, like, I literally get a text. Do you get these every day?

[B]

Yeah, yeah, yeah, yeah.

[A]

We're starting to, like, roll this out to the who. Yeah, I'm trying to pull this up now. So, yeah, so I get this tech. I wish I could just, like, screen share this entire conversation. If you're looking at. At this, I get this text, and it's like, daily stats for the company. Like, we literally. This is an example of something we made with AI Just for funsies. Well, I've talked about it on here.

[B]

It's huge.

[A]

It's like. Which is even funnier. Yeah, I bought that, like, three years. I bought that domain a couple years ago, like, as a joke, and my wife is like, totally hated it. And I'm like, babe, I found a way to use it.

[B]

I'm gonna even be more annoying with it is I'm gonna make a company out of it. It has to stay awesome.

[A]

Well, it's gonna be huge. So. So it. It reads off like, which team won? So, like, yesterday, Nashville H Vac 1 sales, like 72. That's actually fucking ridiculous, dude. 72,878 in one day for H Vac sales team. That's like three dudes, like, clock in, like, 80 grand. That's crazy. And then revenue leader was Stowe Plumbing. And then there's like, an individual leaderboard. And what. What I'm excited about is, like, that was sort of like, iteration one. The next iteration is it text everyone on the team, like, where you fit on your team and in the company as a total every day. And I think that, like, having line of sight of, like, hey, this guy's a high producer in this market. Like, I'm gonna go chase him. Never met him. I'm gonna, like, you know. Yeah, I. I think that's been a lot of fun.

[B]

What's been interesting too, is, like, we're talking about this. This. People want this, by the way. I mean, I've received, like, three texts from individuals like, hey, how do we get.

[A]

Yeah, we have a wait list. How do you do it? I think you're supposed to email info at Owned and Operated, and we're slowly starting to, like, let people into it, and it, like, aggregates data and, like, shares average ticket close rate.

[B]

Yeah, yeah, because I think that part of it. Right. You have to be able to get good data. So, like, you don't just want to let anybody in so that you have a bunch of garbage.

[A]

Yeah. Like, is your CRM clean? Yeah, yeah. But, like, yeah, we are opening it up. Just if you email info at Own and Operated, I. They. They're keeping, like, a wait list, and we're slowly starting to add people into it. So if you already contacted. Don't mind me. It's like, literally, it's called huge. So, like, that gives you an idea of how seriously I take this, which is very. So we're moving slow at it. Okay.

[B]

Okay.

[A]

We were supposed to be talking about marketing roi. All right, let's do it. So marketing ROI is really interesting. I think what people get stuck on, and I suspect is because it's the fastest number that they can, like, figure out is cost of lead, which I think is kind of, like, a weird number to get stuck on. So, like, as an example, like, how much does a thumbtack lead cost? Like, 20 bucks or 30 bucks or

[B]

something, depending the industry. But yeah, between 20 and 60.

[A]

Yeah. So, like, 2060. I think Angie's List, from what I remember, is the same. And those are like, that's cost to lead. If you go over to lsa, it's like a hundred bucks. And so I think, like, most people get stuck on this. Like, well, what's my cost of lead? And I'm like, well, I don't know. But, like, what's the lead can it provide? And why is LSA worth five times in Angie's lead? Well, it's because someone's calling you to solve that problem right now versus a written lead that gets sent out to three or four people.

[B]

Yeah, because that's cost per lead. So if it cost me $60 per lead for a new unit.

[A]

Yeah.

[B]

And that gets out to three people. So I don't get that lead. And it takes me. I get maybe one every three leads because my. Let's just say I'm not quick staffers or. Or a good speed to lead service and good plug or a good, like, speed to lead Service, and I'm pretty slow to it, and I get one out of three. So now my cost per booking, not even cost per, you know, acquired customer, but just cost per booking jumps to like 180. Right. Just 60 times three. And then you get down to, like, cost per actual revenue. And I think it gets even crazier because you don't sell each one of those because they're getting three bids anyway. So you might get out, but you have the booking, but not the actual revenue generation cost per job. So it. It can get complicated quickly if you're not measuring the right things.

[A]

Yeah, yeah. And I think so. I. I think that's one. That's one I want to flag. Is just like, cost per lead is one of the things to measure when you're thinking about, like, marketing. So it's cost per lead, cancel rate from that channel, number of sales from that channel, dollar amount of sales from that channel. Then there's a. I mean, there's a few more, but, like, those are probably the big ones. And then you can figure out ROI from there. Like, how much did I spend on this channel this month? How much did I make on this channel this month? And I think that that's a good place to start. And I think that will get you to, like, your first layer of roi.

[B]

Yeah.

[A]

Which is. Is my demand capture marketing productive? And we define productive as like, minimum five times roi.

[B]

Yeah, like, that's the first thing you need is revenue versus spend cost. Yeah. Because, I mean, yes, again, like I said, the cost per lead matters, but it doesn't matter as much as, hey, I could have, you know, cost per lead of $600.

[A]

Yeah.

[B]

But if I'm driving, you know, 60,000 and running a 10X, then great, because we do have CH like that where the cost per lead is extremely expensive. Like, we might only get three leads, but those three leads generate, you know, just massive amounts of revenue.

[A]

Yeah, no, I agree. I think the next layer, and this is where it gets a little bit tricky, is most of your demand capture is last click. So you get like, last click gets a lot of work or gets a lot of credit. So, like, hey, my. Is my Google Ads driving the lead, or did my radio ads drive people to Google to look for Wilson and then they clicked on a ppc. I'm sure there are, like, tremendous amount of ways to measure this in, like, a productive way. I think overall, the way that I find it to be helpful is what is my marketed like? Let me, Let me step up back. Yeah, back up a Step, you can divide your revenue by existing customer and non existing customer. And I think that that's the first step is like outside of the amount of marketing that I'm spending and am I tracking this by the lead? How much of my day to day revenue is marketed revenue versus non marketed revenue? Non marketed revenue is going to be like recurring customer, which is different than organic. Because if somebody contacts you through GMB or gbp, like that's organic, that's still marketed like you paid for the gbp, like you're paying for a review service or something. Like there's costs associated with that. So I would consider that marketed like it's a new customer. So how much of your revenue is new customers and then how much of it is existing customers? And you separate those two things and then of your new customers, how much of them came through obvious organic channels? Like, they just called my phone number. So maybe like, hey, I can't attribute this to anything, but they called my phone number and I don't have their file inside my system. So maybe that's radio, maybe that's they saw a truck. You know, like pick a thing. Then GBPS is its own thing. And the best companies that I see, like their marketing is divide. They track their organically as tightly as they track their paid. Because I think that is an important piece of the puzzle. If I add a new gbp, what should it do for the business? What did it do for the business? Yeah, and then you track your paid and what we find.

[B]

So a question before, before you go into step two with that is so I know the answer, but I know a lot of people throw this question around like the Breaking Five. How are you doing that? How are you tracking down specific campaigns? What, what's the avenue that you're utilizing to get this tracking ability? Because most smaller contractors have one or two numbers. They have that across everything. And so they're having trouble tracking. Do you ask, do you like what, what do you do?

[A]

It starts with like a new customer report. Like, and so this is where it gets. We talked about this, I think last episode of like how to use AI inside your business. But attribution is a very complicated process. But it starts with, did someone create a new customer file? Yes. No. And then you can work backwards from there. So, hey, I created 10 new customer files yesterday. Okay. Where did they come from? So then you start working through attribution. Well, hey, this phone number matches the phone number that came through lsa.

[B]

Yeah.

[A]

So I'm going to attribute this lead to LSA this phone number matches this from Angie. So I'm going to attribute to Angie's. This phone number matches nothing. Like, we did not buy this lead from anywhere because we get daily reports of what leads we bought. So I'm going to distribute that to random call in because if it was on a gbp, then it would have gone through a GBP line.

[B]

Yeah. So all the phone numbers. So you have a bunch of different phone numbers for each marketing campaign that you're doing across everything thing. And I think that's the important, the, the thing I was fishing for here was like making sure that you have individualized phone numbers for every single different campaign. You do a mailer, you get a different number, you do a different mailer for, for water heaters than you do one for H Vac. Well, you should probably have different phone numbers associated with that or just a

[A]

way to track it because like for mailers you don't necess. I mean depending. I'm not the expert at mailers but like there are other ways to attribute because most of it's just like, hey, has, have I contacted this person and did they contact me? So like mailers, did I send something to their address and did I send it seven times and then did someone from that address call me? And that's where it gets complicated is you have like there's like 20 different sources of data that you're trying to funnel in to Attribution. And what a lot of companies do that like do this really well is they have a full second CRM like beyond Service Titan or Housecall Pro or whatever else they're using. They have a marketing CRM where all they do is like handle attribution inside that CRM. People use Go High Level like a lot. Yeah. So like Isaac in Chicago uses Go High. I think it's Go High Level but like he uses a software that tracks his post, like where he sends 200,000 mailers a month like by address, by name and then he shoves that into Go High Level and then like each contact point goes over there and then when they contact he can track ROI inside Go High Level also.

[B]

What a great way to be able to like do more automations because Go High Level has a really open API which allows you to like let's you do anything. Do Anything versus Service Titans closed. So that's interesting.

[A]

Yeah.

[B]

What a great thing for a CRM that's currently trying to compete with Service Titan to do is wrap up a secondary CRM system inside their.

[A]

Yeah.

[B]

Thing. Okay.

[A]

Yeah. I think marketing is just like its own very complicated. Yeah. And like the marketing Pro product is not good. So yeah, like it's not capable. Like if you know. Yeah, I have a lot of opinions. Okay, stop before I get in trouble. Right.

[B]

So we've just attributed next.

[A]

So yeah, so we attributed. And then the next thing is like how much of your revenue came from paid organic and reoccurring customer. And that's a big thing to walk backwards on. And what that helps you figure out is what is your total blended marketing roi. And the difference is radio, tv, billboards, truck wraps, GBP, rent, like pick a freaking thing. But you have channel roi. But then you have marketing roi. And those, those can be two different things. It's very similar to, I see companies measure gross profit by job and not by company or department or whatever. Well they're like on this job we did X and on this job we did X. So we are a 60% gross margin company. And it's like sort of you're also forgetting about training time, PTO holidays. Like you're forgetting about a lot of costs that are not directly attributed to that specific job but it still counts against your gross margin. So this, this reminds me a lot of that where hey, there's a bunch of stuff inside marketing that's not just that one lead. Like maybe you've got an agency cost, maybe you've got canvassers, maybe you have radio, maybe you have whatever, like software. Like we have a bunch of marketing software. So you want to be able to like measure like what is your blended ROI across the business. Most marketing agencies will show you clicks, impressions and maybe even traffic. But none of that really matters if the phone's not ringing. And that's why we partner with service scalers. They are built specifically for home service companies and they focus on one thing which is driving real high quality calls and book jobs. This is a no brainer. They're offering a 60 day money back guarantee on LSA management, Google business profile optimization and website builds. If you don't get more visibility, more calls and better leads then you don't pay. If you want more book jobs without the marketing headache, click the link below and book a free strategy call with service scalers.

[B]

Yeah, fully agree. And, and I'm going to ask another leading conversation. Well, why do you measure then? Why do you, if you have a good blended roi, why do you move into individualized ROI and break that down?

[A]

I think it depends on the business. So like as an example, like I'll just pick on you and me. So you. Your revenue as a percentage of revenue that is dependent on leads is much higher than Stowe Wilson. Like Stowe Wilson, 20 to 30% of revenue. Like it differs a little bit by the trade. Like electric's higher, but H Vac's the lowest. Depends on marketing because it has the least. Like electric has the least amount of reoccurring service, H Vac has the most, plumbing's in the middle. And so like for us it's only 20 to 30%, but for you I think it's like 45 or 50%. I could be wrong, but.

[B]

Well, we don't have a brand. Like, we've never done branding work. We've never done a radio ad. We've done one set of TV commercials which flopped.

[A]

Misery. Also, like, you don't have like, there's no like reactivation. You don't have like a life cycle marketing muscle. So like all of that stuff helps.

[B]

Yep.

[A]

But my point in saying that is like when someone says they're a 10 marketing spend business, that is an irrelevant metric to me because in this example of like half of your business is dependent on leads and 30% of our business is dependent on leads. If I spend 10% and you spend 10%, you're getting a five times ROI. Like you're getting like you're doing it. Whereas for us we're getting like a three times. Just like walking through that math. Does that make sense?

[B]

Yeah. And then I think that to granular lies that one step further then not, not all 5x ROIs are equal either. Right. So if we have to run double the amount of calls. Right. You can have a higher amount of operating costs to be able to generate that revenue, more in fuel, more in this, more in that to be able to generate that same 5x ROI. So I do think it's important that you're going from a very high level down to the intricacies because two 5x ROIs are not necessarily the same.

[A]

Right.

[B]

A 5x ROI on service only leads vs a 5x ROI on install only leads in H vac are two wildly different channels that require wildly different things. One requires, you know, four technicians and one requires two install crews. So.

[A]

Yeah, I agree. I think something that I get a little bit tripped up on personally. There's a concept called CAC to LTV in like software and really any business, but I think it's mostly in software and it's like cost to acquire a customer, which is cac. And LTV is lifetime value of that customer and I struggle with that metric. In home service the idea is in like a SaaS business or pick a thing, I'm just picking out SaaS if they spend $100 but that customer like their average churn of a customer is two years and they get a thousand dollars a year, they get $2,000. That's lifetime value of that customer is $2,000 and the cost to acquire it's 100. So that's a 5%. Yeah, 5% and like a 20 times CAC which is crazy. So like big fan of that. People try to bring that into home service and I struggle with, with it because a couple reasons. One, you tend to reacquire the same customer. Like we've seen that a lot where like if someone is a Google user they're going to go to Google and they're going to call you and they might not save you in your phone. Like we've had to rebuy the same lead from the same customer a million times and we have a very strong lifecycle marketing muscle.

[B]

Yeah.

[A]

So I, I think like that makes it hard because you do have to reacquire the same customer. I also think like there's no set churn, you know like in, in SaaS. Like as a set churn like they pay for their monthly service or they don't in home service like is it a one time, is it not a one time? Yes, we're going to try to turn them into a member but did it work? Yeah, I just think it's a lot more complicated and I think that ultimately owners try to use CAC to LTV in home service to make sense of them being inefficient with their spend. Well they're like well The LTV is $50,000. So if I spend and that's if I replace the furnace, panel, generator, water heater over a 10 year period I'm like well sure, like yeah, if you rebuild the home it's a million dollars. Yeah, like I will grant you that but that doesn't mean you should spend $5,000 to acquire that customer.

[B]

Yeah, I think it's an open thesis because I know that from, from a, that idea was perpetuated from a lot of larger PE backed firms. Right. Like that was the thesis. Thesis behind it was hey, we buy a three trades business, we get them for over the 10 year period. That's the thesis. And it was picked up by a lot of smaller contractors. I mean it's still utilized in our area to justify PPC. Like hey I can justify a $600 lead PPC because of, because I over the life of the Customer I lose 600 this first year, but over the next 10 years I'm going to make 102,000. I've always had trouble with that one though. Just because again a customers are extremely fickle and I don't think that the churn is like you're not locked in even with memberships, you're generally not locked in. So there's no lock in function to be able to measure churn correctly even as a membership. Like it's not a great tool to, to be able to like measure accurate churn from the business.

[A]

Well I also think like the way companies have done it is they've tried to convert over to a membership to like figure that out and like drive LTV and like one of the fastest growing businesses that I know, it's based out in Phoenix and it's crazy. It went from like 30 million to mid hundreds in the past five years and still privately owned. And they like they don't have memberships at all. Like none. They just don't even have it. And like it is a 95H vac business. So I don't know all that to say like I think peop. I don't think you should worry a tremendous amount about LTV because ltv, it's not contracted revenue. It is easy to get over your skis when you're imagining a large pie at the end of this customer relationship. But that is not contracted. Like it's not guaranteed, it's not anything. It's just like you hope that it happens. So I would focus on your first visit and can you drive like a near term payback on your spend.

[B]

I love it, man.

[A]

What else do we cover? I think my final one is like build a better scorecard. Like you should just have a scorecard for marketing. I was thinking about this this morning I invested in this business.

[B]

I don't know, like, I mean I think that's a hard stop right there. I'm cutting you off but like build a scorecard for your business. It is wild. How many smaller like sub 5 million like in the $5 million. We talk about this a lot. Breaking five.

[A]

Yeah.

[B]

And that's one of the biggest requests we get is what does this look like? Can we see what this look like? It's not crazy difficult but it's important to just build something that's tracking.

[A]

Yeah.

[B]

And then like well I have Service Titan. Well, is your data in service Titan even good? Are you booking and Attributing is your team doing the right thing? Because I know for, for me personally, like last year, early last year, ours wasn't like, we didn't have the right line items. We weren't adding market takes.

[A]

I mean, it takes real energy.

[B]

It takes real energy to design your CRM, to be able to have your people then do the correct thing and the correct part process to be able to build. And so part of what we did was we just generated a off CRM scorecard, like again, level one revenue to spend, which I think is important.

[A]

Yeah, I think we. So yeah, I think have, have a scorecard. And this is like if you have in house marketing, if you have an agency, if you have anything, like everyone should be measured. If it's an agency, they should be be measured. And back to my point on like cost per lead, like, that's not the thing to measure. The thing to measure is like roi and ideally ROI by channel and then ROI for the business. You can back into that. That's probably going to take some time. If you're just starting off with a scorecard. Like the things that matter is number of calls, number of appointments, what percentage of your revenue is from existing customers versus not. And the easiest way to track that is like new customer files. So like we created a new customer file, how many and call booking rate is important because then like, did you book that lead or did you not? And that's an important part to like help you figure out which lead channels are working and which ones are not working. And then ideally sales or revenue by channel. And I know that this is like a lot, but most small companies only have like one or two channels. Like it's like Google, right? Or Facebook or whatever. Like pick a thing and even if all you're starting with is like, hey, number of leads and like how much revenue came through, it is actually really hard to do. And I'm not saying it's like easy at all. I'm not. It's not like, oh, just go make a scorecard. It is genuinely hard to figure out how to assemble this data, but it's a really good exercise because once you figure out how to do it, you know how to do it. But the hardest part of like tracking and like creating scorecards and all of that is figuring out how to even get the data in the first place.

[B]

Yeah.

[A]

And then once you figure it out, like you have, you can build a muscle.

[B]

And as the owner, this is your, this is your job. This is your, this is your job. I'm talking to the owners. This is your job, buddy.

[A]

Me?

[B]

This is all you. I know you have an agency out there. Not their job. Your job. Yours.

[A]

Yeah, it's like it's an agency and internal whatever. Like they're, they're a team member and they have to like you have. You have to hold them accountable.

[B]

You have to hold them accountable to your scorecard that you're providing them. I think that's an important step is like one of the big unlocks for me was understanding that marketing was my job in this business. Like I am CMO as well as everything else. But CMO is probably one of the most important sub ten million dollar jobs you can set. Ten million dollars in revenue jobs you can be doing as the owner. This is it.

[A]

I agree. I feel like we hit it.

[B]

We hit it.

[A]

If you have any questions on ROI or how incredible our June Suban or July will be, just like throw in the comments. Also if you want to be into. If you want to get into huge email Info owned and operated.com and then they'll throw in the wait list. We'll contact you. And besides that head on over to

[B]

owned and operated.com events and check out the September breaking five which will be fun. I'm excited.

[A]

Yeah, that'll be a ton of fun.

[B]

It's always great.

[A]

Thanks everybody.