I worked with a company that participated in home shows. In fact, it absolutely swore by them.
“Why are you in all of these shows?” I asked the owner. “It’s a lot of time and trouble. Plus, it’s expensive. What’s the return?” He responded that the shows were productive—one recent show generated $50,000 in sales for an investment of $2,500.
Forget about feelings, what you've “always done,” or what worked in the past. Marketing is a numbers game and it’s constantly evolving. Remember telemarketing? Fifteen years ago, no home improvement company could exist without it. But, after the Do Not Call Registry kicked in, Internet-lead procurement companies—such as HomeAdvisor and QuinStreet—began to flourish. Suddenly, a dozen or more similar companies popped up. Our thinking was that we’d join all of them. And we did. After that, canvassing got popular. But so many municipalities now regulate it so that if you played strictly by the rules—at least here in North Jersey—it would be cost prohibitive.
Layer by Layer
Marketing is always changing, but the metrics that determine whether or not your plan works are a constant. It’s just not enough to know what you spent to produce X amount of sales. If you don’t know what each lead source produced for each type of product that you’re selling, you’re probably throwing money away.
These days, most companies use some kind of software—MarketSharp or Improveit—to run the business. Great, but are you putting the programs to actual use? Only when you analyze the marketing data do you get a sense of what’s working and why. For example, take that $50,000 generated out of that $2,500 investment in a single home show. Can’t be beat, right? Then, take a look at the actual numbers. In this case, those numbers show that the company’s presence generated 10 leads and that one of those leads sold. The sale happened to be a big one—$50,000. If the company’s average sale is $8,000, it was luck that gave them a 5% marketing cost instead of a 31% marketing cost.
Data Lying Fallow?
Here’s what to do: Sit down at least once a month, if not weekly, and analyze your marketing data in depth. You can’t make informed marketing decisions based on snapshots—“We did really well at this show”—or on what you feel is working. This meeting should include at least you, the owner, and whoever is managing your marketing.
When you’re analyzing that data, be sure to look not only at the ultimate formula (how much you spent per lead source to generate how many sales), but at everything in between. What are your conversion rates for raw leads versus set leads? How many issued leads converted to appointments, appointments converted to demonstrations, demonstrations to sales, sales to revenue? The deeper you go, the more that is revealed. For example, the numbers could indicate that the raw leads generated at shows where Mary was managing converted to set leads at twice the rate as those where her colleague John was running things. John was after quantity, Mary quality. These are the facts that you need to know to manage your business and spend those marketing dollars—10% of sales? 12%? 15%—in the most productive way.