“Do you know anything about SEO?” my friend Ed asked, a few weeks ago.
Growing up five houses apart, Ed and I did a lot of stuff together as kids. Our parents took us to Wisconsin Dells together for vacation once. And when my dad needed an addition put on our house, Ed’s dad, a general contractor, was the first guy he called. We drifted apart into high school and even college, him heading to the military, me to Silicon Valley, but we both ended up as copies of our fathers–him in the trades, me, an engineer.
So you could imagine how I felt when, out of the blue, an email popped into my inbox with the subject “957-2591”–my childhood landline number–we hadn’t talked in ten years, but Ed knew it would get my attention. After the military, he looked up “the occupational category with the best growth prospects”, and settled on HVAC/R. He was operating as a one-man band, under the name Apex Heating and Cooling.
I guess Ed figured I’d know about SEO because I’d always been a “computer guy”, trashing our first one at 5 (I guess that COMMAND.COM file was important?) But after about five minutes talking to him, I realized he wasn’t curious about SEO so much as the larger question of, How do I market my business online?
And truthfully, I wasn’t the worst person to ask: I’d run a contract development shop, and had some modest success building Internet businesses. I’d also been a pretty substantial buyer of building services, managing 12 rentals (including a 20,000 square foot commercial strip center) and running capital projects at CCP, my 800-person Oakland Chinatown condo.
I got the brain dump on heat pumps and blower door tests, he got the inside scoop on organic traffic acquisition, and pretentious hipster coffeeshops.
Start with the customer
The first step for any craftsperson who wants to succeed in business: make it about the customer.
This is hard.
In the United States, especially among highly skilled people, work is more than a 9 to 5; it’s an identity. It starts when we’re kids, watching our parents work–my friend Matt becoming a sales rep like his mom, my friend Ed following his father into the trades. College majors and apprenticeship further reinforce these identities. And after training, our vendor relationships, guilds (professional societies, unions), even friendships and clothing, signals our occupation.
When someone asks, “What do you do”, the expected response is, “I am an electrician”, not “I trained as an electrician” or “I’m working as an electrician”–our occupations aren’t work, they become who we are.
Here’s why that’s a problem:
You can have everything in life you want, if you will just help other people get what they want. – Zig Ziglar
When you’re so wrapped up in yourself–your tools, your craft, your jargon–it’s hard to empathize with others. Even when those “others” are your customers.
Maybe it’s time to think less about intermediate metal conduit vs. EMT, and more about doing the job to an acceptable level of quality, as quickly and cheaply as possible.
Maybe it’s less important whether you’re using the newest scroll compressor, and more important what it will do for the customer–the benefit–more comfort in their homes, and lower energy bills.
Maybe your union or bar association membership isn’t that important. Don’t do anything illegal or unsafe. Beyond that, give the customer what they’re asking for.
It’s not about what you want. You aren’t the client. Your job is to serve the client as best you can.
Once you get serious about serving the customer, you’ll start to understand how they buy–their purchase journey. “Big” purchases–lots of money, complicated requirements–happen in stages, one after another. Sales and marketing professionals, offline but especially on the Internet, call this step-by-step process a “purchase funnel”, or just “funnel”.
Let’s consider the purchase funnel for a home air conditioning system. Even a “straightforward” purchase like this has at least seven steps. In reverse order:
- Delivery: The system is installed, the customer is invoiced, and payment is made.
- Acceptance: The contract for the job is accepted (signed).
- Offer: The customer receives 1 or more offers to do the job.
- Quote request: The customer asks the vendor for a quote (proposal), which may involve a site visit.
- Qualification: The customer and vendor “qualify” each other–does the vendor do the kind of work the customer wants? Is the price in the customer’s range? For contractors, this is usually a phone call.
- Discovery: The customer “looks around” for a vendor–the get a referral (friend, family, other people they trust), look online (Yelp, Angie’s List, Google, etc), or even respond to an offline ad (park bench, bus, postcard, newspaper ad).
- Awareness: The customer becomes aware of the need for a new system, often via a “compelling event”–jealousy after visiting a neighbor of friend’s very comfortable house, hearing they can save a lot of money with a new system, or what they have breaks. Something leads them to take action.
Generating business is less mysterious when the purchase funnel is mapped. And here’s the thing about the Internet: you can measure everything. In addition to receiving an overall increasing share of time and attention, precise measurement is a big reason so much ad spending has moved online.
Conventionally, marketing’s job is to generate leads, while sales, by hook or crook, converts leads into sales (money). Put differently, marketing creates demand–largely through communication that is specific and targeted–while sales takes the lead and “finishes the job”; the exact split is highly dependent on the business.
The value of a lead
So, where do leads come from? That depends what they’re worth, which depends on your business. But first, a quick aside: conversation rates.
A conversion rate is the number of people at one funnel stage, that proceed to the next. Simple example: if 100 people look at your website and 1 calls you, that’s a 1% conversion rate. Note that doesn’t mean the person will necessarily buy anything–only that they’ve taken one step forward.
In order to determine a lead’s value, you calculate the value of a sale (the net profit), and work backwards through your funnel. Here’s a typical example, working backwards through the seven-stage funnel above:
- Ed’s typical residential air conditioner installation job is $20,000. After expenses, he earns about $4,000 on this job–his profit. (Note: the number we care about here is profit, not revenue. I’ll revisit this point later.)
- Ed aims to win about 50% of the proposals he writes — he’s not desperate for business, but also not out to gouge people or waste time bidding work he’ll never get. Ed’s 50% win rate means a submitted, serious proposal is worth about $2,000 (50% x $4,000).
- Ed always answers the phone, but about half the people who call him live out of his service area, need service right away (he’s booked for the next 2-3 weeks), or want a product he doesn’t sell (50% conversion rate). That means an unqualified lead (call) is worth about $1,000 (50% x $2,000).
- About 5% of the people who view Ed’s website call him. That makes a visit to his site worth $50 (5% x $1,000). Note: 5% view-to-call conversion means Ed’s site is pretty good.
Let that sink in for a minute — statistically speaking, a single website visitor is worth $50 in profit.
Does that seem like a lot? On one hand, it’s $50 in profit, just for getting someone to view your site–that’s a lot of money! On the other hand, if you’re new to this, you’ll be surprised how much money you can spend while generating absolutely no business. Start slowly and measure everything.
Another thing, the example above assumes you’re doing only one sale with a customer, when more often than not, you’ll end up doing repeat business over a longer relationship. This is especially true in local services — marketers call this stickiness — one satisfied roofing customer might generate dozens of high-quality roofing leads as you become “the guy” for his entire block, church, and extended family. On the other hand, if years pass between sales, the customer might “churn out” and need to be re-acquired (they behave more like a new customer).
The bottom line: the math gets a bit fuzzy and it’s best to think in ranges. If your profit per lead is $50, don’t worry about spending $2 vs $3. Worry about spending $50, or $100, or $200–there be dragons–you might recover it over the length of the relationship, but you’ll get in too deep a hole that you’ll run out of money before you make it back. Aim to spend no more than 20% of the yearly profit to acquire a customer.
And finally, keep in mind you don’t have to be perfect, just better than the competition.
How to spend it
So, assuming our $50-of-profit customer above, how do you spend (deploy) money to get good, hungry, well-qualified leads?
Perhaps surprisingly, my overall view on lead generation is that it resembles the rent vs own decision for where to live. Like shelter for people, brand awareness and traffic are a matter of survival for your business. And ultimately–remember I said to focus on your customers–traffic and engagement on the Internet, whether Instagram likes, page views on facebook or the web, whatever–come from an audience. I like the term “audience” as it connotes a group of people who watch, or pay attention, to what you do. This is a good way to think about work in 2020.
Audiences can be either owned or rented. Like housing, there are some general guidelines, but the right choice depends a lot on you.
Renting an audience basically boils down to: pay a major Internet platform to promote your content. The platform might be facebook, Google, Youtube, Pinterest, or something else, but the basic mechanic is: you pay them for eyeballs. You’ll get results more quickly, but promotion is priced by auction, so your cost to acquire a customer generally won’t ever go down. You can also find someone who’s built a community (subscription newsletter, blog, facebook group, etc) and ask them to run your ad.
If, on the other hand, you’re in it for the long haul, you need to own your audience. “Owning your audience” means you have a direct relationship with your customers, that isn’t mediated by Google, facebook, or any other platform. A good rule of thumb: if you have their email address, you’re doing well. By moving the conversation off of the big tech platforms, or at least making it so that people search you out, you can drive your cost per lead down, and the quality and brand trust of the leads you do get, up. Here’s a few ideas:
- Show your work. Use Dials. One of the best parts about building a new software product is getting to study a problem, and building the exact solution someone needs. Contractors are visual people who love taking and sharing photos of their work. Dials helps you build your brand with zero effort by ensuring jobsite photos are placed onto the right social feeds, maximizing the exposure–attention, mindshare, and leads–you get, without spending money on promotion. We have great features to log and plan your work, and great prices starting at free. What are you waiting for?
- Join the right referral networks. Contact people in your area who do the same kind of work you do, and let them know you’ll take any work they don’t want. This is especially effective for smaller contractors, who are happy to take on smaller jobs the larger guys don’t want.
- Explain things on the Internet. My dad can spend hours watching videos about conduit, roofing types, or HVAC blower-door tests. Whether it’s a blog, video series, or subscription email list, people who explain contracting topics well (e.g. galvanized vs. copper pipe) will get a never-ending stream of well-qualified leads, with tons of brand trust from the first call. Do it.
- Ensure people can find you. Make sure your pages on facebook, Google My Business, and Yelp are up-to-date. Ask for reviews when you do work.
One important axiom of Internet marketing: Good content production is frequent. Aim for a mix of high-authority evergreen articles and videos (will remain relevant for many years), plus smaller, more frequent stuff to ensure you stay top of mind. Again, using Dials can really help – we let you share photos of your work directly to your social profiles, ensuring a constant stream of authentic, original, new stuff. That plays really well on the Internet, and social media.
In the long run, marketing is all about driving a well-qualified stream of leads to your business. In order to do that, a company or brand must use consistent, targeted communication, and get it in front of the right people, to earn trust, mindshare, and ultimately, business.
“Audiences” are a great metaphor for customer groups on the Internet. It’s usually smart to test the waters, gauge interest, and experiment a little with a rented audience. Once you’ve started to find what resonates, invest the time and money into building your own. Building an audience is neither fast nor easy, but it’s the only way to get off the Google/facebook treadmill, and build a long-term competitive advantage in acquiring customers. Otherwise, you’re just bidding against the guy across town for traffic, and lining Google’s pockets in the process.