How Contractors Can Improve Sales Demo Rates

For all home improvement contractors, the sales funnel plays a vital role in converting prospects into customers. However, it's not enough to just create a sales funnel and expect it to work perfectly without any effort. It's important to track and improve various metrics within the funnel to ensure its effectiveness, and one of the most important metrics to track is the demo rate.

The demo rate is the percentage of leads who agree to a demo or product presentation after being contacted by your call center or a member of your sales team. A high demo rate indicates that the sales team is effectively engaging with prospects and presenting the product or service in an appealing way. On the other hand, a low demo rate suggests that there may be issues with the sales team's approach or the product's messaging.

The calculation for demo rate is Completed Demos / Total Viable Leads. It is important to extract any leads that do not meet your target audience. Some leads just aren’t viable and hopefully they are at a minimum to keep your Cost per Lead down. For example, if your inbound leads include some that are well outside your geographic coverage area, then those leads should not be included in your demo rate calculation.

Here are some reasons why tracking and improving your demo rate is crucial for your business:

1. Identifying Weaknesses in the Sales Process

By tracking the demo rate, you can identify weaknesses in the sales process that may be preventing prospects from agreeing to a demo. For example, if you have a low demo rate, it could indicate that the sales team is not effectively communicating the value of the product or possibly not targeting the right audience. This in turn uncovers a marketing problem that must be addressed ASAP. It is possible that your marketing is not clearly differentiating your business from competitors in your market area, meaning that prospects do not clearly see your Unique Value Proposition (UVP). Some call this a selling proposition.

2. Increasing Sales Conversion Rates

A high demo rate is a strong indicator of a well-functioning sales funnel. If prospects are agreeing to demos at a high rate, it suggests that they are highly interested in the product and are considering making a purchase. This is generally because you have piqued their interest as the best choice for solving their specific problem, essentially putting your unique value proposition (UVP) front and center. By improving the demo rate, you can increase the likelihood of converting those prospects into customers. Remember, without a demo, it is highly unlikely for any homeowner to choose your company for the project.

3. Optimizing Marketing Efforts

The demo rate can also help you optimize your marketing efforts. By analyzing the demo rate of different marketing campaigns, you can determine which campaigns are most effective at generating interest in your product. This can help you allocate your marketing resources more effectively and generate a higher return on investment.

So, how can you improve your demo rate?

1. Refine Your Messaging

One of the most effective ways to improve your demo rate is to refine your messaging. Make sure your sales team is effectively communicating your company’s unique value proposition and addressing any concerns or objections prospects may have. The refining of messages is a marketing function, and this is the key to generating enough interest for a lead to agree to a demo.

2. Improve Your Targeting

If your demo rate is low, it may be because you are not targeting the right audience. Review your ideal customer profile (we call this a customer avatar) and make sure your team is reaching out to prospects who are most likely to be interested in your product. For example, if your company focuses on upscale projects in affluent neighborhoods and with unmatched quality and workmanship, your demo rate will certainly not be strong in low-income areas.

3. Make It Easy to Schedule a Demo

Make sure it's easy for prospects to schedule a demo. Provide clear instructions on how to schedule a demo and make sure the process is streamlined and user-friendly.

In conclusion, tracking and improving your demo rate is critical for the success of your sales funnel. By identifying weaknesses in your sales process, increasing conversion rates, and optimizing your marketing efforts, you can generate more interest in your product and ultimately increase your revenue.

Gary Cohen is Vice President of Certified Contractors Network (CCN) and runs the day-to-day operations of the company. Prior to that he spent 11 years as a Clinical Professor of Business at the University of Maryland’s Robert H. Smith School of Business and served as Associate Dean for 4 years. CCN is a training, coaching, and networking organization in the home improvement contracting industry. CCN has been contractor owned and managed for 27 years, with a sole focus of helping contractor owners build generational wealth while improving the quality of their lives. For more information on CCN, contact Gary at gcohen@contractors.net or visit www.contractors.net/contractors.