Are your lead costs up? If it's any comfort, many home improvement companies are facing the same challenge. Our poll of the 100 largest companies indicates that for many the price of a customer contact jumped 10% or more during the past year.
Finding customers is more expensive. Media costs have escalated. The price of printing and mailing has increased. Newspapers charge more for less circulation. And canvassing — which once seemed the answer to this industry's need for a low-cost, scalable lead source — has proved to contain too many hurdles for some companies to overcome, and is increasingly subject to restriction.
If you're finding lead costs hard to live with, there are two options.
One is to continue looking for inexpensive and more-efficient lead sources.
The other may require taking a look at your business model. Notice, for instance, that companies in small markets are often able to get by with a marketing expense of 6% to 8%. Is that the lucky accident of geography? Actually, there are also companies in big metro markets that spend no more than 10% on marketing. They're known for their quality work; they guarantee it and advertise the fact. Satisfied customers refer them to friends or call them back for additional work. People who need windows, siding, or a new roof seek them out.
This happens because they have channeled a lot of energy into customer satisfaction, found ways to measure it, and built lead procurement systems around it. At the same time, they expanded their product offering to give past customers more reasons to do business with them. An interactive Web site and previous-customer database are critical components in this formula.
What does it take to deliver great customer service at every point of contact? Training, scripting, discipline, accountability, and rewards. And it doesn't happen unless it's imposed from above and the owner is personally committed to it. Eventually it becomes the culture of the organization.
The reason it works is that homeowners often dread dealing with contractors. Their positive view of the industry expands in direct proportion to how well the project goes and how easy the company is to deal with. Conversely, if they're offended, disappointed, or annoyed, that confirms their view that no contractor can be trusted.
So if marketing costs look scary, consider giving your organization a customer service makeover.
Jim Cory, Editor