Last updated on 23/09/2020
There are a variety of residential contractor lead generation strategies you should consider as part of your company’s overall marketing strategy. No one lead generation method is “all-inclusive” or fits all residential contractors. Rather, you should have a complementary mix of lead generation sources, that provide your company the desired return for your marketing investment.
Pragmatic Marketing Investment
Residential contractors have limited financial resources to invest in marketing activities to attract new customers. Therefore your challenge is to be pragmatic in how you invest your marketing budget. You should invest in those marketing activities that consistently generate the highest amount of revenue, with minimal risk of waste.
Which marketing activities will provide you the greatest financial reward? John Wanamaker, a 19th-century American merchant who is considered a pioneer in marketing, once said “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” You face the same challenge, 200 years later.
The Pareto Principle, the 80/20 Rule, suggests that roughly 80% of the effects come from 20% of the causes. Here is how it applies to the residential contractor market:
- 80% of home improvement services come from 20% of all owner-occupied homes.
- 20% of your competitors are making 80% of the sales.
- 20% of your target market will actually make purchases.
- 80% of your marketing investment is wasted.
There are two overriding messages. First, your residential contractor lead generation strategy should not be generic but unique to you. And second, you need to minimize the investment of your time and resources on the wrong sales prospect base.
With the above in mind, let’s look at different residential contractor lead generation strategies that you can adopt and personalize for your target audience. In all instances you need to measure the results of your choices over a set period of time to determine which provide the greatest return on your investment.
The residential contractor market of construction, remodeling and upgrading is growing. When a homeowner or business begins their planning of these activities, they will invariably turn to the Internet.
Your residential contractor website is your primary online business address. Without it you won’t be found and considered by potential customers who begin their investigation using the Internet.
Your Website is the “Hub” of your online presence. Everything revolves from it. Your residential contractor website should not be confused for a social media company page in LinkedIn or Facebook.
Your website, domain, Email, etc. are company branded, completely under your control, and provide more credibility to potential clients.
This is a primary engine for residential contractor lead generation. Like your company truck, it requires an initial investment, fuel, tires and ongoing maintenance. Don’t skimp on quality and have a good mechanic on stand-by (third-party website company).
Yes, you or someone you know may be tech-savvy, but it is not a prudent use of your time and resources versus the importance of the investment.
Internet search engines “guide” perspective homeowners in their search of home improvement and remodeling information and, ultimately residential contractors. Google controls more than 90% of all world-wide search engine market. Whether direct paid advertisement placement or indirect organic search results, your company needs to invest here.
Residential contractor lead generation results will vary greatly in quality, direct and indirect costs. Your direct costs are relatively easy to determine since it will be the search advertisement “clicks”. Your indirect costs will include your third-party website company (managing the search engine advertising campaign). Finally there are the indirect costs for the time and resources involved in filtering, following up of responses, scheduling of homeowner appointments, etc.
Your website should include a Blog. This is a means to provide a more personal communication to your local market of homeowners and former customers. The majority of the Blog content should be informational (how to, what to look out for, how to improve your home value, etc.) articles.
Use the Praeto Principal as your guide, with 80% of your Blog content about information your website visitor might be interested in and 20% about your company and services.
Why invest here? This is to increase the number of visitors to your website, establish greater credibility as a residential contractor, foster communication with your former and potentially future customers, increase opportunities of word-of-mouth lead referrals and strengthen your website search engine ranking authority.
The latter will allow you to gradually reduce your search engine advertisement investment (lower your advertisement costs) as your website appears increasingly in organic search results.
Your investment in information articles also gets to be amortized across a variety of marketing activities since they can be “repackaged” for use in Email campaigns, handouts, local events, etc.
Approximately over 223M Americans use social media in 2019 with no increase in growth over the last four years. This trend is likely to continue to decline with US demographics trends.
Facebook has lost more than 15 Million users in the last year. However the only demographic group increasing their use of Facebook are now Americans 55+. This is a prime market for home improvement services.
Nearly 60% of Facebook and Instagram users are women. Hispanics and African-Americans are more likely to cite Instagram and WhatsApp when compared to the composition of the United States population.
You should consider a mix of social media depending upon your local market characteristics. Your marketing content should be personalized to each audience, which is different based on the media, to increase your investment return.
Perspective customers still use the Yellow Pages, particularly for local services. Your investment in online business directories and services is somewhat like “check the box” for company credibility.
However, Google (the giant), offers your company, at no cost, a business profile as an extension of their search engine services. This business service lends itself to mobile Internet searches, which is more than 60% of all Internet searches and continues to grow. This also improves your website credibility, improving your search engine ranking and likely search results.
Contractor Sales Lead Services
Residential contractor lead generation services is essentially outsourcing a portion of your marketing activities to a third-party provider. You should view this type of lead generation option as another component in your company’s overall marketing investment plan.
Subscription Contractor Sales Leads
Subscription contractor sales leads are provided by service providers aggregating homeowner 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.
The number of contractor buyers for any given form request will vary. Exclusivity of a residential contractor leads is virtually non-existent.
Again, using the Praeto Principal as a guideline, 80% of the Internet lead forms do not result in a contractor sales appointment. Why? Distrust on the part of the homeowner as to how the information submitted will be used, and the difficulty of determining where the homeowner is in the cycle of planning the project.
The cost for sales leads will vary based on project type and age of the inquiry. They are likely comparable to the cost of search engine advertisements.
Telephone-Verified Contractor Sales Appointments
Telephone-verified contractor sales appointments are provided by service providers aggregating homeowner 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.
The call-center agent process involves verifying:
- homeowner contact information;
- home improvement project details
- interest level, wants and concerns;
- time frame to start project;
- available financial resources
At the completion of the dialog with the homeowner, the call center agent will set the expectations for scheduling the initial telephone conversation with a residential contractor as a prelude to the scheduling the home site visit.
Using the Praeto Principal as a guideline, 80% of the Internet lead forms have been filtered due to the agent telephone-verified process.
The cost for telephone-verified sales lead will also vary based on project type and age of the inquiry. They are likely comparable to the cost of search engine advertisements. The cost per sales appointment however will be less.
Repeat Business | Customer Testimonials | Referrals
The basic goal of a residential contractor lead generation strategy is to generate additional business by new customer acquisition. However this is somewhat short-sighted since your existing customer base offers the greatest potential for new business, at the lowest investment cost.
First, repeat customer business is key to long-term contractor success, due to lower sales costs and higher profitability. Secondly, repeat customers serve as advocates of your company credibility, promote trust in your services and provide word of mouth referrals.
The success of your residential contracting company is based on the credibility and trust a potential customer has in your services. Testimonials from former customers can provide the needed social proof that tips a sales prospect into a new customer.
Testimonials all serve one purpose: they establish trust.
How do you get customer testimonials? You need to ask for them. When do you ask for them? Once the home improvement project is completed, as part of a formal customer quality satisfaction check.
Customer testimonials are highly valuable and result in converting sales leads into new customers. They should be published in your website and other marketing materials.
According to Nielsen, 92% of consumers believe recommendations from friends and family over all forms of advertising. This is the power of word of mouth marketing. That is the importance your company should place in getting customer referrals.
Your customers likely have busy lives. Once you have completed a home improvement project and they have cancelled the bill, they really don’t have any future obligation with you. That being said, there are a variety of things that you can do to get more customer referrals and testimonials:
- Ask For Them – This should be a standard procedure when your personnel are delivering the home improvement project completion.
- Timing Is Everything – As with many aspects of life, the timing of when you ask makes all the difference in the answer received. For a residential contractor, it is likely when your customer is most happy, at the delivery of the project.
- Offer An Incentive – A form of “thank-you” such as a gift card or bonus service can serve motivate your customer to offer a potential referral.
- Standardize – Make the request for customer referrals a standard part of your project acceptance process.
Customer Loyalty Retention
When you offer some type of incentives/rewards for repeat business, you give your customers a clear incentive to stick with your residential contractor company instead of switching to one of your competitors. Whether it is a discount on the next remodeling project, special invitation for a complementary home service, a complementary gift for a new customer referral, etc., the list is varied.
Regardless of the offer, your goal is to make it more advantageous for your customers to continue working with you than to test out their other options. And the more your business relationship caters to their needs, the more effective you will be in getting getting repeat business and new customer referrals.
Local Presence Marketing
Whether your residential contracting business covers one zip code or five, you are a local service provider to homeowners. So, your residential contractor lead generation strategy has to have a component that leverages your local market presence.
You need to figuratively “touch” perspective homeowners with your service offering.
Your company vehicles should be mobile public marketing kiosks. All contact information should be readily visible. The use of eye catching designs and bright color schemes should call attention to those passing by.
Think like a real-estate agent, who are masters at local marketing of properties. Have hanging marketing materials on your parked vehicles for the curious. Consider using a wireless beacon to broadcast your special service of the month to all the smartphones passing by.
There are a variety of ways that can spark the interest of a homeowner to begin a dialog that can result in a future sale.
Canvasing homeowners, whether at a retail mall or local neighborhood where you are servicing a customer, is a face-to-face marketing program that will result in sales leads. It offers the flexibility of being conducted on any day, subject to local authorities and the weather.
It however requires time, planning, administration and endless rotation of personnel.
A well run residential canvasing program can result in generating sales leads at 7-9% of revenue. It can be a scalable, economical way to generate sales prospects, or it can be a disaster.
Here are some things for you to consider before you start contractor canvasing:
- Set Your Goal – Will this be your primary lead source or does it complement others?
- Who Sets the Appointment? – Your canvaser or your in-house sales staff?
- Have Systems In Place – Don’t start before you have systems to recruit, hire, train, manage, transport, and follow up on leads, etc.
- Have Metrics To Determine Success – How many total labor hours are required to generate a homeowner appointment? What percentage of appointments result in revenue over 90 | 180 | 360 days?
- Administration – Recruit selectively, train, motivate, repeat for fallout, follow up sales calls, setting appointments, etc.
- Local Permit Requirements – Determine whether they will allow you to be financially successful.
Like swimming, test the water before you jump in. Better yet, work with someone that already knows how to swim.
Non-Competitive Business Referrals
Homeowners will need a variety of home services with the passage of time. This implies they will need to investigate and select home service providers based on the information available to them.
As such, a recommendation from a trusted person with roots in a home service field can go a long way to influence their decision. Therefore a residential contractor should cultivate referral relationships with other non-competitive service providers.
Examples such as lawn care, pest control, plumbing, HVAC, lend themselves to a “quid pro quo” recommendation, when the homeowner requires your contracting services. The result of the recommendation can be a potential new customer.
Preferred Insurance Provider
Local insurance agencies process damage claims of homeowners. Getting endorsed by insurance companies is a great opportunity for lead generation and new business.
When insurance claims for damages are filed with your partner insurance agency, your residential contracting company can be that who has to perform the repairs.
Also, having your company name on your local partner insurance company website as their preferred contractor can result in increased credibility in your local community and result in new customers.
Conclusion – Residential Contractor Lead Generation
A variety of residential contractor lead generation strategies should be part of your company’s overall marketing strategy. No single lead generation method is “all-inclusive”. Instead you should have a complementary mix of lead generation sources that meet your financial budget and return on investment goals.
For additional information on telephone-verified home improvement leads for residential contractors and how they can help you grow your business, please Contact Us for a free, no obligation conversation.