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Leads Are Like Oxygen

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Construction Practices

Leads Are Like Oxygen

A well-run remodeling company needs to be good at marketing 

December 7, 2017

I’m finalizing next year’s marketing plan and manufacturer leads play a big role in it. You know the kind I mean - it’s the lead dispatched from the website of a manufacturer whose products you install. Homeowners go to the website and enter contact information into the “Contractor Locator” feature, which then gets fed to us. 

These are a huge lead source for our company—this year manufacturer leads accounted for about 45 percent of our business. That wasn’t always the case, but things are changing. Ten or 15 years ago, manufacturers made a product, handed it off to distribution, and we, the contractors, were on our own to find a customer. It wasn’t enough to be great at replacing a roof or re-siding a house. You also had to master the art of marketing your services to homeowners. 

Marketing Costs Down

And that’s not cheap. Exterior remodeling companies typically invest upward of 10 percent of sales, depending on the product and the market, the size of the company, and the growth stage that the company is currently in. Some will invest as much as 20 percent of their sales to keep business flowing. 

Which is one reason to love manufacturer leads. In this particular case, they don’t cost us anything. Another reason is that they close at 50 percent, near to what the close rate is on a repeat or strong referral lead. Of course, to have access to them you have to be in the manufacturer’s dealer program, and to be in that program at the top level, which we are, you have to buy a certain amount of the manufacturer’s product and use their trim products in your projects. You also have to maintain a minimum 90 percent approval rating on GuildQuality

This manufacturer wants undying loyalty. So I am going to be loyal. I’d be crazy not to.

Homeowners land on the manufacturer’s website because they’ve heard of the company, seen the product on a neighbor’s house, or want work done. That comes close to being as qualified a lead as you can get. The only thing missing is you. They know the product, they’re interested in the product, and so it’s not so much a matter of you selling them the product as you selling them your company’s installation of the product and showing how that differs from competitors in the area who also install it.

Manufacturer leads are one reason why our marketing costs have gone down. Great reviews and substantial referrals are other reasons. We spend half to a third as much as we used to on marketing and right now we’re booked out till March and April. Not that I’m complacent. Leads are like oxygen. The tank’s full, but it’s my job to make sure it stays that way.

Consumer Traffic Is Key 

Manufacturers in this industry are starting to see that the old formula—we build this stuff, it’s your job to market it—was killing them. Some of them have invested big dollars in driving consumer traffic to their own websites. They know that there are all kinds of contractors, and some are good at marketing and some are not. They want to drive and control demand for their product, and that means stimulating and allocating the lead flow.  

Consumer traffic is the key to future business, and search engine optimization (SEO) is the way you drive it. It’s why Amazon is so successful. In home improvement, if you asked someone to name a shingle manufacturer, they’d almost certainly name GAF, because GAF has branded itself online better than competitors. Not every manufacturer is in on the game. Some feel it’s not their job to market the products they make. I’ve raised this issue with some vendors and the response is: Hey, you just want us to do your marketing for you. Maybe we will, and then why shouldn’t we just install the product too? At which point I attempt to explain that it’s because if they did they’d be eaten alive.

And believe it or not, I’ve also heard contractors complain because some of the free leads they get from manufacturers are questionable, or not within the realm of what they do (repair work, for instance). You just can’t win with some people.

Not Lead-Dependent

But even though those leads are mostly great and the price is right, we’re still going to be spending money on our own marketing. And where we’re putting that money is into SEO. If someone in our ZIP codes is looking for that product, I want them to land on our website.

The easiest thing to do would be to just sit back and let that manufacturer feed me leads. But having been in this business for a while, I know that everything has a lifespan. Things change between the morning news and the evening news. What if, for example, the manufacturer replaces current team members and the new team is suddenly much more difficult to deal with? Anything could throw a wrench in the works.

So we allocate marketing funds not only to generate the best, most qualified leads, but to keep ourselves as autonomous as possible. You have to be captain of your own ship. 

We had a vendor recently approach us about turning over our past customer database so that they could contact those customers seeking referrals. They would charge us $1,000 for every window job of ten or more windows sold. That’s a manageable lead cost—about 10 percent—but here’s the catch: our previous customer data became theirs. I said I’ll be happy to do it if you’ll sign a separate agreement saying that all that data is the sole property of K&B Home Remodelers. They refused, so we said no. What if we had gone along, and then a year or two later they dropped us or we decided to switch window suppliers? Our customer database would be mined on behalf of their new contractor.

Right now our lead sources include manufacturer leads, our own SEO, and referrals, plus some lawn and truck sign leads. The marketing dollars I plan to spend in 2018 will go toward paying someone to manage our website (SEO) and someone else to write copy (blogs, testimonials, etc.) for the site. The more leads you can get on your own, the more independent you can be. And it’s more cost-effective. The more geo-targeted you can be, the more community-conscious and community-minded your company can be, the better off you are. 

In marketing, it’s great to have friends, but don’t be dependent on anybody. 

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