3-Step Method for Evaluating Home Improvement Lead Sources
At Dreamstyle Remodeling, we strive to consistently use a balanced lead source mix. This means ensuring no single source is above 20% market share for more than 12 months.
If you're too reliant on a lead source and it goes belly-up and stops producing results, then it can take down your entire home improvement business. So, we don’t want any one source carrying too much weight.
These three evaluation steps ensure we have a mix that drives consistent lead flow at the right cost.
1. Testing
The best practice is to continually test new lead sources. Even if you think you’ve found a healthy marketing mix, it’s important to constantly experiment with and test new sources.
New sources should undergo a trial period of 30 to 180 days, depending on your goals, to test long-term viability.
No lead source should ever be on auto-pilot.
Industry conferences are great places to find new sources or vendors that you might not have heard of before. Eight to 10% of my monthly marketing spend is dedicated to testing new vendors and lead sources.
Listen to Jay Shah discuss how to achieve a balanced marketing mix on the Rock Stars of Remodeling podcast.
2. Investing
If a source is providing your company with cost-effective leads, it becomes an active lead source, and you can move it into the investing phase.
Lead sources in the investing phase still require daily management and reviewing of analytics to enable a timely shift in your marketing plans. Just because a source is doing well for a couple of months doesn't mean it’s going to perform positively for the entire year. You need to always monitor your relevant key performance indicators, or KPIs, to ensure the lead quality remains good.
No lead source should ever be on auto-pilot. If performance slips, I want to know within the week so that I can take the necessary corrective action. Sometimes that means getting on a call with a vendor to reduce lead volume from them while I continue to monitor the cost-effectiveness of that particular source.
You can’t afford to have your marketing spend completely inflated with a source that's not performing well.
3. Resting
Lastly, there’s the resting phase. Typically, the sources that do not meet the performance criteria for investing move to resting.
If things get to the point where you can’t justify the spend because the lead quality drops or your set rate decreases, you need to move that source to the resting phase. This is where you pause and reassess a source before spending any more money on it.
You may be able to pivot into a more favorable cost model after a discussion with a vendor or decide as a team on adjustments your call center needs to make to give you a better chance to convert and close leads from resting sources.
With sources in the resting phase, you want to make sure to keep the relationships positive and keep the door open with any vendors. Stay in constant contact with the reps you have relationships with. You may find a solution that allows you to move a resting source back into testing.
The testing, investing, and resting method is cyclical. Sources can often go in and out of different stages multiple times as you constantly work to produce a balanced marketing mix that yields cost-effective home improvement leads.
