Contractor Leads Versus Appointments – What’s Best For Your Business?

What’s the difference between buying contractor leads versus appointments? Basically it’s the difference between making money or throwing it away. It is really that simple, sort of.

If you are a residential contractor you know that you only buy contractor leads to generate homeowner appointments. Afterwards, your sales staff converts a percentage of these homeowner appointments into projects that ultimately result in revenue for your contractor business.

This is a sales process that is well understood by most residential contractors. However, understanding the dynamics associated with this sales process is not as clear to many contractors.

There are several key points to mention in passing. Firstly, the percentage of conversion of contractor leads versus appointments and their related costs. Secondly, the percentage of conversion of homeowner appointments into signed contractor projects with their costs and resulting revenue.

Let’s review aspects of contractor leads versus appointments to determine what might be a better marketing option for your particular business. Afterwards you might reach the conclusion that the way your conducting business may not be the smartest or most profitable way of doing so.

CONTRACTOR LEADS VERSUS APPOINTMENTS

Let’s discuss how best to get your field sales personnel in front of a homeowner. Although a face-to-face meeting is simple in concept, as you know, the devil is in the detail. So, let’s delve into the detail to help you determine whether contractor leads versus appointments works best for your business.

1 – WELL, WHAT IS THE DIFFERENCE BETWEEN CONTRACTOR LEADS VERSUS APPOINTMENTS?

Let’s start with some basic definitions related to the sales process. Specifically what are the differences between a lead versus a prospect versus an opportunity (appointment)?

Contractor Lead

A lead is what you need to get started in the sales process. Basically it’s information.

A contractor lead is basic information that comes from a variety of sources including: a list of homeowners names, customer referrals, contractor inbound marketing activities and any type of personal response. Accordingly, your sales staff needs to determine whether a lead “fits your profile” and is worth the time to invest in a conversation.

Now the higher the “quality” of a lead, the higher the percentage of these leads that will move along in the sales process. When your sales personnel make contact, i.e., an initial conversation, it is to determine whether the lead is an uninterested party or rather the next term in the sales process, a prospect.

Contractor Lead Qualifying Process

Your sales staff will use a qualifying process (series of questions) to determine whether a lead fits your business profile. These qualifying questions fall into three categories:

• Level Of Pain – Is the homeowner really ready to start the project and why now? If the response is weak or not urgent, the lead does not move on to be a prospect. But don’t throw it away, as the life of a homeowner changes with time.
• Logistical Issues – The homeowner budget (lack thereof), timeframe, external factors and readiness to buy will determine whether the lead moves on. Nonetheless, the lead remains “in transit”, not be be discarded.
• Competition – Find out whether the homeowner is considering other contractors or alternative solutions to his/her pain problem. Basically this provides your sales staff information how your contractor’s services might differ from other alternatives.

The key point here is that a contractor lead is not a sure thing until it has been qualified.

Contractor Prospect

Once your sales staff has asked all the right qualifying questions, gotten the right answers that fit your homeowner profile, and is willing to continue the conversation with your sales staff, then your lead becomes a prospect. However, as all contractors know from personal experience, you may not get the sale right away.

A prospect is a prospect until it moves to the next stage in the sales process: an opportunity or appointment (homeowner site visit). Basically this is when the prospect is willing and needs to consider your contractor solution.

Contractor Opportunity (Appointment)

The homeowner appointment is genuinely a sales opportunity for a contractor. And while you can’t sell to someone who’s not interested, a contractor can explain their benefits and pour salt in the wound of their pain to help improve the potential of the sale.

2 – OK, ARE YOU SAYING I SHOULD BUY CONTRACTOR LEADS, APPOINTMENTS, OR WHAT?

While each contractor is unique, most contractors should invest in a combination of different types of sources that can ultimately result in producing homeowner appointments. Likewise, the return on your marketing investment will vary dramatically depending how well your sales staff uses these sources.

Before starting, it is necessary for a contractor to do a self-appraisal of the internal sales staff, their experience, limitations and what works well for them. Basically it is not a wise investment to pay a lot for quality contractor leads if they can not work them successfully.

Generally a small, experienced sales staff will benefit from lower volume but higher quality contractor leads. Whereas a larger, less experienced sales staff will need more volume and lower quality due to cost considerations, other things being equal.

When you buy contractor leads you need to determine their overall value versus your other investment options. Following are general guidelines for you to consider:

• The price of the contractor lead;
• The ease of contact and interest level of the homeowner;
• The number of competing local contractors for the same home improvement project;
• The likelihood of converting the homeowner lead prospect into a sale.

3 – WHAT ABOUT BUYING CONTRACTOR APPOINTMENTS?

Well, setting up contractor appointments is your end-goal, isn’t it? So, buying appointment leads will work for a contractor as long as you get a comparable or better return on your investment versus having your internal sales staff generate them.

Remember the devil in the detail? A contractor will need to track ALL THE COSTS related to using an internal sales staff to generate a contractor appointment. Conversely, the cost of purchasing a contractor appointment from a third-party provider is clearly known and visible.

What will be “all the costs” to go through the sales process from a lead, to a prospect, to an opportunity (appointment) in-house? Following is a partial list of activities to assign costs:

• Lead Source – Is this a bulk purchase of local homeowner data? Or Is this a selective purchase though a lead aggregator? Maybe this Is a single contractor lead purchase? Perhaps this a lead is from your website or from other types of marketing and advertisement?
• Lead Qualifying – All costs related to qualifying contractor leads: computers, telephones, personnel, administration, time of opportunity, etc.
• Prospect Conversion – All costs related to filtering (same as above) prospects to sales opportunities.

4 – COST COMPARISON BETWEEN THE OPTIONS

For this cost comparison of contractor leads versus appointments we present five different contractor scenarios. Accordingly, we make a variety of assumptions for simplicity of discussion.

A small contractor company specializing in residential roofing services is looking to increase sales. Their internal personal costs are $15.00/hour, fully burden and we will also ignore opportunity costs, for simplicity.

Following are the marketing services they currently use to promote sales which include:

• Pay-Per-Click (PPC) Advertisement
• Company Website
• Subscription Contractor Lead Supplier
• Exclusive Telephone-Verified Contractor Lead Supplier
• Live Transfer Contractor Lead Supplier

Let us discuss each marketing service used by the residential roofing contractor in greater detail.

Pay-Per-Click Advertisement

• Summary – PPC is Internet search engine (e.g., Google) advertisement which generates Internet searches to a contractor’s website for additional information. Factors that will influence the volume of click responses are the search keywords, search engine traffic, amount bid (paid) per click and quality of the advertisement.
• Quality – Because there is no type of “filter” to determine who does the Internet search, it can be a homeowner, minor, local competitor, etc. Consequently the quality can vary widely and there is no direct knowledge of the level of homeowner interest and where in the research phase of a project.
• Cost – This varies based on level of search traffic, selectivity of keyword terms, competition in local market and desired advertisement position on page. PPC can range from $8.50 to $12.50 for a keyword selection of “home roof repair”.
• Exclusivity – YES.
• Process – The search engine routes PPC inquiries to the contractor website’s landing page. Subsequently the visitor may leave the website or request additional information via a form inquiry or telephone call.
• Value – Assume a PPC average cost of $10.00 and three clicks to get a visitor contact inquiry. it takes two visitor-contact inquiries to be filtered to qualify as a prospect. Each visitor-contact inquiry requires 15 minutes of administrative time. It takes three attempts (10 minutes) with a visitor-contact prospect to schedule an appointment. The cost to schedule the appointment is: (2 visitor-contacts x 3 clicks x $10.00/click) + (2 visitor-contacts x 0.25/hour x $15.00/hour) + (1 filtered contact inquiry x 0.5/hour x $15.00/hour) = $75.00/Appointment

Company Website

• Summary – A residential contractor website is the the primary online business address. Without it a contractor won’t be found and considered by potential customers who begin their investigation using the Internet.
• Cost – There is both development and ongoing maintenance costs related to a contractor website. For simplicity, assume a $120 monthly cost with 100% assigned exclusively to website visitor lead generation and there are 120 (direct and organic) visitors per month.
• Exclusivity – YES.
• Process – A search engine (or other source) routes inquiries to the contractor website’s landing page. Subsequently the visitor may leave the website or request additional information via a form inquiry or telephone call.
• Value – Assume an average cost of $1.00 per website visitor and three to get a visitor contact inquiry. it takes two visitor-contact inquiries to be filtered to qualify as a prospect. Each visitor-contact inquiry requires 15 minutes of administrative time. It takes three attempts (10 minutes) with a visitor-contact prospect to schedule an appointment. The cost to schedule the appointment is: (2 visitor-contacts x 3 website-visitors x $1.00/website-visitor) + (2 visitor-contacts x 0.25/hour x $15.00/hour) + (1 filtered contact inquiry x 0.5/hour x $15.00/hour) = $21.00/Appointment

Subscription Contractor Lead Supplier

• Summary – Subscription contractor leads are provided by service providers aggregating home improvement project inquires via Internet forms. The Internet form request quality will vary and is normally limited to automated processes of address and telephone number verification
• Cost – The cost will vary often will vary by type of contractor industry. But for contractor roofing leads they are approximately $25.00/lead.
• Exclusivity – NONE. Leads will be sold on average four times or more.
• Process – The contractor simply orders the homeowner leads from the service provider as desired.
• Value – Because the contractor leads are shared (more competition), not all leads will be viable to schedule an appointment. Consequently we assume the need to purchase an average of 1.5 subscription leads per homeowner prospect. Each contractor lead requires 15 minutes of administrative time. Because the contractor leads are shared, it takes six attempts (10 minutes) with a homeowner prospect to schedule an appointment. The cost to schedule the appointment is: (1.5 x $25.00/subscription contractor lead) + (1.5 x 0.25/hour x $15.00) + (6 homeowner-contacts x 0.167/hour x $15.00/hour) + = $58.13/Appointment.

Exclusive Telephone-Verified Contractor Lead Supplier

• Summary – Telephone-verified, exclusive home improvement leads are provided by service providers by aggregating home improvement project inquires via Internet forms coupled with call center agent verification with the homeowner. The Internet form request quality is much higher since it entails human interaction with the homeowner.
• Cost – The cost will vary often will vary by type of contractor industry. But for contractor roofing leads they are approximately $35.00/lead.
• Exclusivity – YES.
• Process – The contractor simply orders the homeowner leads from the service provider as desired.
• Value – Because the contractor leads are exclusive and not shared, all leads will be viable to schedule an appointment. Consequently we assume the need to purchase an average of only 1.0 telephone-verified lead per homeowner prospect. Each contractor lead requires 15 minutes of administrative time. Because the contractor leads are exclusive, it takes two attempts (10 minutes) with a homeowner prospect to schedule an appointment. The cost to schedule the appointment is: (1.0 x $35.00/subscription contractor lead) + (1.0 x 0.25/hour x $15.00) + (2 homeowner-contacts x 0.167/hour x $15.00/hour) + = $43.70/Appointment.

Live Transfer Contractor Lead Supplier

• Summary – Live transfer home improvement leads are also provided by service providers by aggregating home improvement project inquires via Internet forms coupled with call center agent verification with the homeowner. Afterwards the homeowner is live transferred to a dedicated contractor telephone number for processing. The quality is high since this is a “live” prospect on the telephone.
• Cost – The cost will vary by type of contractor industry. But for contractor roofing leads they are approximately $45.00/transfer and can range much higher due to labor costs and low volume production.
• Exclusivity – YES.
• Process – The contractor simply orders the homeowner live transfer leads from the service provider as desired.
• Value – Because the contractor leads are exclusive and not shared, all leads will be viable to schedule an appointment. Consequently we assume the need to purchase an average of only 1.0 telephone transfer lead per homeowner prospect. Each contractor lead requires 15 minutes of administrative time. Because the contractor leads are exclusive, it takes one attempts (10 minutes) with a homeowner prospect to schedule an appointment. The cost to schedule the appointment is: (1.0 x $45.00/live transfer contractor lead) + (1.0 x 0.25/hour x $15.00) + (1 homeowner-contacts x 0.167/hour x $15.00/hour) = $51.25/Appointment.

5 – SO WHICH IS IT?

Residential contractors use a variety of marketing activities to promote their business, generate sales leads that a percentage result in homeowner appointments. Overall the types of marketing activities reflect what the contractor perceives to offer a high return on investment.

Correspondingly these marketing activities should be viewed as complementary since there are differences in the lead quality as well as potential volume available at any given time. Also the residential contractor needs to assess their internal resources to process the volume of leads that move to be sales opportunities that ultimately result in homeowner projects.

CONCLUSION – CONTRACTOR LEADS VERSUS APPOINTMENTS

A residential contractor needs sales leads to fill the sales pipeline to generate future business. Accordingly, there are a variety of marketing options that should be viewed as complementary to the long term success of the contractor business.

Please Contact Us for a free, no obligation conversation about our exclusive, telephone-verified residential contractor leads and how we can help grow your business.

REVISED: 2019-12-06