What's the goal of home improvement marketing? Is it brand-building? Image making? Generating leads? Ask a hundred people in the home improvement industry and you'll probably get a hundred different answers. In my view, marketing has one simple goal: to make money. And profitable marketing — marketing that results in profitable sales at a cost of 10% or less — means having an optimized mix of different lead sources.
How many? That depends on what you can afford, among other things. More important than the number is the diversity of those lead sources. Leaning on one, say canvassing or television, puts your lead procurement effort at definite risk. Still, there is no magic number. A small company might have the management and budget capacity for several major lead sources. A multistate contractor may have the capacity to generate leads from dozens of sources. However many lead sources use, they should be as diverse as your budget allows. That way if one falters, the others can pick up the slack.
Manage Your Portfolio
Think of your marketing mix like you would an investment portfolio, a group of stocks or bonds. Each investment (or lead source) has specific strengths and weaknesses that must be managed to make the portfolio as a whole work to generate a satisfactory return, which in this case means leads. Those strengths and weaknesses balance against each other. We do a mix of traditional lead sources — print, direct mail, radio, television — with inbound sources, such as the free informational downloads from our website. The goal is to reach those interested in our products now as well as those who may be interested at some point in the near future.
Free informational downloads give people a low-risk way of checking out our company. Many of these are people who aren't ready to buy today, tomorrow, or next week. They may be in the earliest stages of researching a product or project. But if you give them something of value — and good information is valuable — and continue to reach out to them via your call center, email blasts, or direct mail, they'll come to you when they're ready to buy.
A lot of companies take a shotgun approach: They spend money with no sure way of knowing whether or not a particular type of marketing is actually generating leads. It's like trusting your stomach to tell you that lunch is ready.
So how do you optimize your lead sources? Track each and every one. If you can't track that lead source, there's no way you can manage it. If you aren't tracking your lead sources with fervor and intensity, then start doing so right away.
Here are some practical suggestions that will help you better manage lead sources.
- Time. You have a new lead source but after two weeks it's barely producing. So you quickly cancel it. Companies often do this with sources such as radio. Here's my suggestion: Give a new lead source three months. If it's not generating leads in a month, that could be because of the economy.
- Effective messaging. If your lead source isn't generating the return you want, or need, maybe it's not the medium but the message. Is your offer on target? Is what you're saying actually relevant to the prospects you're trying to reach?
- Conversion metrics. Know what you're paying for. A simple way to judge performance, which many companies use, is the LADS formula: leads, appointments, demos, sales. So if a source is pulling in a tremendous number of raw leads but is generating relatively little in the way of sales, you'll know to look at how those leads qualify.
- Tracking numbers. Having unique tracking numbers on your ads is a great way for you to know with confidence which leads are generating leads and which are not. Many media companies running the ad will send you a weekly call tracking report that will list any calls that were generated from the ad plus a recording of each call so you can monitor how the call was handled.
- Weekly, monthly, and quarterly review. Review performance on a regular basis. A lot of companies wait too long to review and by the time they get around to it, they're looking at data that's no longer relevant. Reviewing each lead source weekly enables you to identify problems and address them quickly, to act rather than react.
If you're spending good money on leads, you'll want to know as soon as you can whether or not that's an investment that's paying dividends in sales.
—Daniel Gallegley is director of marketing for Durante Windows & Siding, in Irondale, Ala.