Track your leads and analyze the results – You’ve done some of the hard work. You got some leads. The next step is to use those leads to your best advantage. To do this you need to track your leads. You need to know where they came from. Then refine your marketing efforts with this information.
You’ve done some great marketing. Maybe you took my advice on the 20 low-cost ways to market. Maybe you did 10 of the 20. If you did, you most certainly have leads now. Super. Now, what are you going to do with those leads? Give them a call and find out what they want? Write or email to them and see what they plan to do? Do you have a plan or process to follow with each and every lead? Well, you need to if you don’t have one. You spent time, energy and money to get each one of those leads. That is just the beginning. Now you have to make the most of each one. You have to have a high conversion rate. How many of those leads will become jobs? How much time will you spend on each one to qualify them? How will you communicate to your staff where each lead is in the sales funnel?
In the sales world, we refer to the sales process as a funnel. You dump as many leads as possible in the top of the funnel, then keep working them through the sales process till a few come out the small end, which are your qualified customers. Another way to look at sales and leads is as a pipeline or straw. It is very important that you keep your pipeline as full as possible. If you don’t have people in the pipeline, then you can expect a dry spell. It takes time to work your leads through the process, so always take a look at how many are in the pipeline. Is it half full, or almost empty?
I have put together a simple to use, but very effective lead sheet called the Probable Purchaser Form. On the last page of the form you’ll find detailed instructions on how to use it, as well as the reasons for asking certain questions. This will be a very good aid as you qualify your PP’s and estimate their project. Click here if you’d like to download this free lead sheet.
One of the first things that you need to know about your leads, besides their name, is how they found you. Make a list of all the possible ways they may have learned about your company. This item will be near the top of your lead sheet. It is one of the most important factors that you will use in your analysis of sale costs.
Next, you need to know what type of project they are interested in. Make a list of choices on your sheet so it is easy to note. When you contact your lead, or they call in, be sure to listen to them, rather that going right into a sales spiel about how great your company is. They’ve already called you, so save the sales speech till later. Ask them what type of project they are interested in, how they found out about you, how do they plan to use the space, do they have kids (how many) or are they empty-nesters, are they planning to stay in this location for a while (how long), what problems have they had with the space if any, what are their long term plans for their home, how long have they been planning to do this, do they have plans, do they need design work, are they considering other builders/remodelers, if so, who. [Tip: Asking this may seem a bit bold, but if you will make a point to ask, they will usually tell you. If there are 3-5 others bidding on the project, and the lead seems very price conscious, that's when you might say say, "Call me after you interview all of them and then we'll talk." This is a major qualifier and time saver. The likelihood of you getting that job and making a decent profit, is pretty slim.]
In many cases this information will be collected by your receptionist or whoever manages the office. This person needs to be well versed in what questions to ask, as well as being educated about the basics of your business. At the end of the conversation this person needs to clearly lay out the next step that will be taken, so that the lead is confident what will happen next and who, how and when they will be contacted. Put all this information on an easy to fill form for later analysis. These forms will be passed on to your salesperson or whoever on your staff follows up on this initial inquiry.
Leads are important, but how will you use this data? The first thing you will observe is where the lead came from. Did it come from a newspaper ad, or the Yellow Pages, or from your website, a home show, or from a job sign? Put a dollar value on each of these sources. Each lead has a cost. And by analyzing your leads, you can find what your approximate return on investment (ROI) is for each lead source. Which source gives you the best ROI? Which marketing method should you cut down on or eliminate? You can find out which lead source is the best one for your company. Build a simple spreadsheet with the ad source, cost of the lead, whether you got the job, and what was the gross sale of the job. Divide the gross sale by the cost of the lead, and you have the ROI on that lead source for that lead. Divide the number of closures by the total number of leads and you’ll have your closure rate. A good closure rate is 1 out of 4, or a 25% closure rate. What that means is that for every four leads you have, one of those will be a paying customer. If your closure rate is a lot lower than that, you should study your sales and marketing process and improve it. If it is a lot higher than that, you’d better raise your prices, because most likely you are leaving money on the table. Keep an eye on the conversion rate. It is just one more metric that will help improve your biz.
Be sure to download the lead sheet before you go. Feel free to comment on how it can be improved for your business.
In my next article I’ll discuss an almost effortless way to track your leads, customers and projects, and keep all of the information, including every email, phone conversation and appointment, in a central location that is accessible by everyone on your staff.
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www.RemodelerBiz.com is published by Randall S Soules, a 37 year construction veteran. The intent of this web site is to help builders, remodelers and those in the trades, create a rewarding career and lifestyle. At Remodeler Biz you’ll find helpful articles on niches, marketing, graphic standards and the design-then-build field.
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