A search for “replacement windows” by Replacement Contractor yielded three top results: Window Replacement Center, the Replacement Window Site, and Calfinder. All three sites collect information from homeowners set on remodeling and then sell that information to contractors. Lead-generation companies have become a powerful force in the Internet age. Calfinder, for example, offers homeowners information, resources, a daily blog and free estimates on a variety of home improvement projects.

Contractors, on the other hand, gain access to a vast coffer of internet leads. These leads are exceptionally valuable because homeowners feel safer using a company referred by the lead-generation site. In other words, lead-gen companies are to contractors today what word-of-mouth referrals were before the age of Google.

Not every remodeling contractor is happy with lead-generation services. Some complain that too many companies receive the same lead or that leads are not well-qualified. Yet those who are successful with internet leads are often very successful. George Faerber, owner of Bee Window in Indianapolis, estimated that 8-10% of his leads come from lead-generation companies – among them Calfinder – and that about one-third of all his business volume comes through the Internet in some form or another.

The Right Time is Real Time

What separates success from failure with purchased Internet leads? It’s a matter of timing and determination. The right time to call a prospect won by Internet is in real time. As in now. To illustrate the point, take a couple of Calfinder leads offered to New Windows for America. The first lead came in at 10:37 a.m. and the second at 11:07 a.m. The first lead was not called for several minutes and, upon calling, received no answer. The 11:07 lead was called at 11:08 and a sales meeting was set. The Internet age demands real-time response, especially when you know you are not the only contractor who is receiving a particular lead.

First Come First Serve

Another reason to be quick on the draw – to drop everything and call a prospect – is lead competition. It is rare for a lead-generation company to offer exclusive leads, and the first contractor to make contact is often the first, if only, contractor to schedule an appointment. Developing an internal system for a quick and quality response is vital to turning Internet leads into real life sales. New Windows for America reports that it successfully sets appointments with nine out of 10 lead-gen prospects exactly because it has developed a working system to reply to those leads promptly.

Following Up

Determination is the second key to success with lead-gen inquiries. Even if you call every lead within minutes of their inquiry, you are unlikely to reach everybody on that first try. While immediate response is vital, follow-up is also key. This can mean anything from repeated phone calls for several days following the initial inquiry to monthly or quarterly phone calls and emails.

Cheap and Effective

You may have to work for a lead culled from a lead-generation company, but that lead can be both effective in generating business and relatively inexpensive. Ken Greene of St. Clair Corp, a home improvement company based in St. Louis, sees Internet leads as a major contributor to company sales. He notes that 73% of Calfinder leads become good net business, well above industry average. Furthermore, Calfinder leads are cheaper; marketing cost for St. Clair Corp on a Calfinder lead is 8%, compared to 14% companywide and across all lead sources.

So, Internet leads may take some work on your part to push them beyond the marginal, but companies like New Windows for America and St. Clair Corp have proven that they can be very effective. They do it by adjusting their company routine to accommodate the new wave of lead generation. In the age of Google and real-time technology, you have to help your leads help you.

Via Replacement Contractor Online

First off, really get to know your prospect. Understand their needs, wants and top priorities. The industry is what you know best – you can relate to homeowners and really level with them. The better you understand the clients, the better your suggestions for their living space will be.

I had my house painted recently and the bid came in 60% lower than the other bids. I took the bait because it’s human nature to want to save money. I’m not experienced in house painting, so I didn’t know what kinds of questions to ask to ensure the job was done right – and on time.

Here’s what I got for that low-ball bid:

It took him 2 months to paint the interior rooms of my 1,700 square-foot house. He used low-quality paint so he had to paint multiple coats, which cost more money. He over-sprayed my windows and window frames and didn’t clean it up. He also over-sprayed my ceilings, which meant I had to paint the ceilings as well. He removed all smoke detectors, phone plates, electrical outlets and vents, but didn’t reconnect any of it after the job was done. I’m still sorting through nuts and bolts trying to figure out what goes where and I’m left with wires hanging out of the walls where light fixtures were removed but never replaced.

Now that I’ve been burned, I’ve learned. Now I know the right questions to ask – a little too late. Had one of the higher-bidding contractors taken the time to really understand my needs, I most likely would have trusted them more with the job. What I valued was neatly painted walls, a one-week job, and all fixtures replaced at the end. They then would have had the opportunity to help me understand that based on my values, that level of service would cost more money.

These are the types of questions you can ask to help a potential client better understand the process, problems they could run into, and what outcomes would be unacceptable. Though my questions are paint-related, any contractor can tweak them to fit their niche:

• Do you have any time constraints? Are you concerned about the length of time it will take to complete the job?
• Are you concerned abou the quality of paint (how it looks on your walls and the lifespan of the product) your contractor uses?
• Do you value neatness of work?
• Are you concerned about over-spraying?
• Is it important that your contractor remove fixtures rather than tape around them?
• If light fixtures are removed, is it important that your contractor reconnect the wiring and fixtures so you can actually enjoy your newly painted walls?
• Is it important that your contractor has lien and liability protection?

These are but a few questions you can ask to understand what the homeowner values. Once you have this information, ask them how the low bidder will meet their needs and deliver the quality of service they value.

Suggest to your prospect that they go back to the other bidder with a list of expectations to be included in the signed contract.

Just by showing that you care and taking the time to understand their needs will most likely land you the job. It will get them thinking because you’re teaching them things to think about – remember, you’re the expert, not them. They don’t know what questions to ask or what sort of problems can arise.

If they don’t hire you right on the spot, they’ll most likely hire you after the lower-bid contractor refuses to put into writing any references about guaranteed satisfaction or job time-lines.

When you play smarter and really get to know your prospects by asking key questions, you’ll start taking away more business from low-bidding competitors.

Photo Credit: billjacobus

Assumptions

His dissection of referrals utilizes several assumptions that remodelers too often make in regard to referred clients. These include assuming that:

• Friends of clients are always as easy to work for as the original client.
• Referrals will accept responsibility and make selections on time.
• Referrals will have the same sense of cost vs. value as clients.
• Referrals will be patient.

Indeed, making assumptions about any aspect of lead generation is not a good idea. Such a notion can breed complacency, which will usually lead to an end of referrals in general. Understanding that each client is unique, with their own sense of taste and process, is the backbone of any successful remodeling company. Yet personal inconsistencies seem hardly a reason to disqualify the referral as a quality, if not the best, lead. A contractor is measured by his or her ability to communicate and troubleshoot with any client. In terms of how an acquaintance with a client is generated, what could be a better foot-in-the-door than a personal reference?

Photo Credit: Midtown Crossing at Turner Park
What Are Your Aspirations?

The fifth and final myth, as well as the heart of the anti-referral argument, is that a contractor can build and sustain a business solely from client referrals. Referrals are inconsistent, and a successful remodeling company will create a dynamic lead generation process including advertising, community involvement, and other available resources.

Much depends on company goals or aspirations. I personally have seen contractors succeed without a stitch of advertising (one used only his church bulletin), relying solely on word of mouth and performance (although community involvement was always present). Yet these contractors did not aspire to grow into a large, several-crew outfit. They were happy with keeping it small, keeping it local, and keeping it personal. I also watched their companies wax and wane with the local economy and business cycles. They understood that business would be slow from time to time and adjusted their business plan to accommodate that fact.

Now, for a company wishing to grow and expand to its maximum potential and beyond, the idea that you can rely on referrals alone is indeed false, especially when you are trying to expand into new markets. On the other hand, maintaining a quality of service that will garner referrals when they are there to be had is still crucial. One might even say that advertising, newsletters, and others are a way to penetrate a given market, but it is referrals that will truly entrench the company.

Furthermore, remember that the work will always speak for itself (and then get clients to speak for you). One could almost include in the “referral” category a lack of negative discussion about your company. That is, a poor reputation will trump most lead generation strategies, especially when the Internet is so easily available for clients to voice their opinion for all to see. So while much depends on your aspirations, referrals, which are always based on service, are still the backbone of any company, whether they are, in their traditional definition, your main source of leads or not.

Referrals Are Tantamount to Success

So while referrals may not be numero uno for your company, they will always have an effect on your business. I maintain that referrals are still top quality leads because it is never bad to have a positive review, regardless of what it leads to. This is the very reason why online referrals are gaining in popularity. Despite their relative impersonal nature, they allow homeowners to get not just one but several referrals from past clients with just the click of a mouse.

In closing, the quality and consistency of referral leads varies widely depending on contractor and community. To assume that referrals will always be there to support your business is a certain mistake, although assuming that any lead generation strategy will be perfect is also a mistake. Yet at the heart of any company are always dedication, communication, and a quality of service. These are the characteristics that generate referrals.

So we have a market that encourages remodeling, however hesitant consumers are to spend, and an Internet that is fast becoming a home improvement tool in its own right. This combination has spawned a major rise in online referral services. These companies, such as CalFinder, offer homeowners an online resource on a smorgasbord of home improvement topics and an easy-to-use link to contractors in a given area. You, the contractor, pay to have these homeowners connected to your company, in the form of their contact information.

Working with these Internet leads can be a bit tricky, requiring more work on your part than traditional leads. As Dave Lupberger pointed out in a related post for Qualified Remodeler, an Internet lead will likely fall short, in terms of information provided, when compared with traditional referrals. Unless you work with a service like CalFinder that pre-qualifies every lead, you generally won’t have a personal view of the homeowner, you won’t know how serious they are, you won’t know their budget situation, and you won’t know when they want to start.

What you will have is their contact information, which is something to work with. Homeowners are generally serious about wanting to remodel, but they may be very hesitant, given today’s economy, to jump right in. Therefore Internet leads may require a little work on your part, some more aggressive marketing. Lupberger put it very nicely when he stressed the importance of developing “a good marketing pipeline.”

You note and keep track of homeowners, Internet-lead or not, that have expressed interest in your services in the past. You then be sure to make regular contact (every few months at least) with these prospects, by way of marketing tools like company newsletters, new project notifications, open houses, and more. The idea is to engrain your company’s name and services into the minds of these homeowners, so that when they are ready to remodel, it is your name that will first come to mind, and your phone that will ring.

Of course when you get a homeowner’s contact information, do not simply send them your next quarterly newsletter. Be sure to make contact with them, offer free estimates and start building a professional relationship with them. Online referrals allow you to specify the region or areas which your company services.

You know the neighborhoods and relative income levels of your best past clients. You can use this a priori knowledge, combined with a lead’s contact information, as clues to who your best prospects are likely to be. But in this day and age it is unwise to ignore any lead, especially as personal referrals give way to Internet leads as a major marketing source. Develop your pipeline and work to expand it; these are the benefits of Internet leads and your task at hand.

The concept is simple. Past clients are a familiar resource whom you’ve worked for in the past. Their repeat business or recommendation to a new client has a certain, predisposed measure of validity that is just not possible with strangers. Now, in 2003 when the original survey was taken, times were very different. The housing boom was coming into its own and contractors had more freedom to pick and choose projects.

Those times may have come and gone but the fundamentals of remodeling and lead generation remain, even though it may be contractors calling past clients to check in rather than the other way around. Yet despite the fact that homeowners are in the driver’s seat, you are still more likely to generate quality leads from past clients because both homeowners and contractors tend to trust the word of a friend or known client than a phone book or random ring of the phone.

Another interesting trend that came out of the 2003 survey and remains relevant today is the need for personal interaction. Most contractors surveyed stated that they put “gut reaction” and face-to-face conversation on a higher pedestal than any number on a lead sheet. The lead sheet may itself lead to the interview, but it would always be the interview that took precedent.

Again, now that the tables are turned and it is often the contractor doing the hunting, the same rules apply. Better leads come from past clients and should be prioritized. Homeowners running through the phone book or search engine are essentially window shopping. That is not to say that every lead isn’t important — there is a contractor for every job regardless of lead origin — but the odds are much better when familiarity is involved, not to mention contact onsite.

The point of all this being that keeping in touch with past clients is an excellent idea. The remodeling season is soon forthcoming, the stimulus package is pouring plenty of money into weatherizing and home repair, and every quality lead starts with the mention of your name…now may be a good time to make sure past clients remember it.

Now that you’ve set up your tracking system, let’s look at why and what you should track.
Testing is the “’life blood” of direct response marketing. Testing is critical for all DR Lead Generation customer acquisition channels. If you don’t test, how do you know which are your best offer(s)? Your best list? Or your best creative package?

If you continuously use the same images, the same offers in the same vehicles – consumers will eventually see you in the same light as the furniture store that’s been going out of business for the past 7 years. There will be no urgency to “act now” in your message. “Sally, we don’t have to call for

“Nth” select testing is the best methodology. By “Nth,” I mean every other piece is the test, every 3rd, every 4th, every 5th, etc. You maintain your testing selection throughout the universe you’re using. If the “Nth” select is not practical in the medium you’re using, while not totally scientifically perfect, you can also use an even/odd zip-code test, different radio/TV stations within the same market can yield valid testing results.

What do I mean by “element?” 1) Graphic design, 2) Offer, 3) Target audience, list, magazine, broadcast station – these make up the Marketing “Triangle.” If you’re testing the graphic design – the offer and target audience have to remain the same. If you’re testing different offers – the graphic design and target audience have to stay constant. You get the idea.

Next, you have to have statistically significant response numbers to be valid. Example: you tested and have twice as many responses from effort “B” as you do effort “A.” Great, you found a winner. Or did you? You got 2 responses from “B” and only 1 from “A.” Theirs is statistically insignificant responses to make any decisions.

The following are annualized results on various tests conducted over a period of a couple of months each. Of course this was over an entire region of the country encompassing 5-6 states. But I believe you can reduce the revenue gains down to a local level and still clearly see the potential benefits of conducting tests for your company.

NOTE: The lowest CPL or best Response % doesn’t always reflect the best ROI

NOTE: For those “math-letes” who are 110% scientifically inclined — if you have a local university handy, you might ask a professor in the math department to write you out a simple spreadsheet with the Chi-squared formulas built in. If you enter your known or “control” response percent and the “confidence level” you want for your test, the macros will tell you how many pieces you have to mail to attain the test results. The higher the confidence level the larger the test and control quantities will be. Depending on how radical your test, this could be a big and expensive gamble. For an initial test, I’d generally recommend a confidence level of 65 – 70%. If the test “beats” your control, then next test should be larger, maybe 75-80%. If the test still wins, I’d consider you either have a new “control,” or you have a test that equals your current control so you can alternate these packages and neither will “fatigue” as quickly.

It’s 2009, you cannot expect different results if you continue doing the same things. Test and see if you can beat your current “control” creative, offer or find a new audience for your products and services.

Your marketing expenses are probably the biggest variable you can control. Those advertising dollars could directly determine the amount of your profitability. Controlling your marketing is how can you stop wasting money and keep more it!

Now by “control,” I certainly am not advocating unnecessarily limiting your marketing spending; rather, I’m saying — spend wisely.

“How do I spend wisely?” you ask. By knowing absolutely, without question or assumption, what marketing programs or channels are the most to least effective, and eliminating the least effective ones. You can re-direct your marketing resources in those areas that are the most profitable.

Tracking is the answer to knowing what sources are working (or not) for your company, whether they are offers, lists, creative, or channel specific. Which call-center agents or event/show promoters are the most or least effective? Not just the ones that produce the most leads . . . but more importantly, which ones convert those leads/inquiries into the most appointments? And which ones ultimately result in installed business?

If you can’t identify which marketing channels or individual efforts or “tests,” are the most cost-effective, you cannot accurately focus more resources on the “winners,” and thus, increase leads, revenues, and bottom-line profitability! (NOTE: “Valid Testing Methodology” is the topic of our next article.)

For an example, let’s say you’re spending $35,000 this week. $5,000 each on solo Direct Mail and Co-ops, 2 radio stations, and 3 TV stations. Your overall Gross Sales were $350,000; therefore, your Ad Ratio (cost of marketing / Gross Revenue) is 10% (or whatever your “allowable” range is). Your advertising was cost effective for your organization. Congratulations!

Without tracking all you have is the summary of your cost of marketing and its effectiveness.

With tracking, you discover that:

• There were no leads or sales from 2 of your TV Stations! That’s $10,000 down.
• The other station brought in $75,000 (6.67% G/Ad Ratio). One radio station brought in twice as many leads but no sales; however, the second station brought in $50,000 (10 % G/Ad Ratio).
• The solo Direct Mail represented $100,000 (5% G/Ad Ratio) in Gross Revenue while the Co-ops were $125,000 (4% G/Ad Ratio). But the mail’s cost was twice as much.
• Both Direct Mail and Co-ops’ performance was outstanding, the Co-ops brought in additional branding awareness for your company because of the increased household coverage.

Do you see how, going forward, you could re-direct your resources based on factual knowledge?

Tracking can be as simple as having a different “extension” on each different ad if you’ve only one phone number. Simply provide a spreadsheet with the “extensions” in use and their corresponding source; ask your agents to keep track of the calls they receive asking for a particular extension. Although with human error it’s not fool-proof, but leaps and bounds ahead of not knowing at all. Of course, tracking from the raw lead or inquiry to appointment and then to sales is a little more difficult.

You could use an outside source such as Who’s Calling or Ring Central to provide 3rd party separate “800” numbers for each of your ads. But again, it would be your internal staff’s responsibility to be able to track those leads through the process to Gross or Net Sales.

Or tracking can be more sophisticated with a different Validation Code being assigned to the following components, depending on the lead tracking software you’re using.

• Week of
• Source or channel
• Creative
• Offer
• Specific list segment, broadcast station, internet ad, etc.

With the proper software, you can also track the hours, salary, and productivity of your call-center agents, event/show promoters and Sales Representatives (even how effective they are per lead source).

By far the most comprehensive and cost-effective lead, sales, agent/promoter software is LeadPerfection. LeadPerfection is a totally enterprise-wide scalable system from marketing to sales to production and finally, accounting. The system is as easy to use as the Internet and provides easily read productivity reports for each department. (NOTE: While I recommend LeadPerfection, I am not affiliated with this company in any way, nor do I receive any compensation from them. After research of the 3 leading tracking companies, my clients and I have found it to simply be the best.)

Accurate tracking of your marketing channels, creative, list or offer tests, etc. is critical to improving your company’s customer acquisition process. Imagine the effect on your year’s end profitability if you could spend the same amount of dollars but increase your leads and revenues? You and your business will both grow.

– John Clements is a Direct Response/Lead Generation Marketing consultant. He can be reached at JClements@ClementsMktgGroup.com or 631-981-1994. www.ClementsMktgGroup.com

Let’s take a step back and think about ordering a pizza with just 1 or 2 or 3 toppings on different sides. Yes, this will appeal to the actual people who are ordering the meal.

But what happens if some friends come over who have not been involved in the ordering of your pizza? What if they just don’t like pepperoni and are allergic to cheese? They don’t get to eat with you. In fact, they may go out and eat elsewhere.

Or what happens if that pepperoni half (or third) falls on the floor? You’ve lost a major portion of your dinner. Either some people are going to go hungry or you’re going to have to spend more money on dinner to feed everyone.

Please, follow the analogy through. The choice of lead generation marketing channels (like pizza toppings) probably has the same affect on your potential customers. Almost everyone will react more favorably to certain advertising media and totally ignore or dislike others for whatever reason(s). Just like some people like onions, peppers, and mushrooms and others hamburger, sausage, and pepperoni.

For example, if you send a solo Direct Mail piece to a household that totally ignores the 4-letter words “junk mail,” you could literally send a $10,000 personal check to them and it will probably get tossed in the trash. However, that same household may think the world of a co-op mailing envelope (think ValPak, etc.) and open it eagerly to see the saving coupons for “product.” Alas, you’re not in there…but your competitor is. Who’ll get the business? Probably not you.

I know of a fairly sizable company in the New York Metro area that relied on Telemarketing for about 20% of it’s business and solo Direct Mail for another 15% of so. After 9/11, even with telephone redundancy, with all the phone lines down, this company couldn’t make calls for over 2 weeks. To compensate, they mailed literally over 100,000 additional Direct Mail pieces out of New Jersey. You’re right – anthrax. This company, while spreading their risk better than many others, lost approximately one-third of their business for several weeks in addition to the cost of the lost mailing. They lost 1/3 of their pizza dinner.

This company, “A,” relies on Telemarketing for 40% of their leads and Event Marketing for 38%. These two lead sources represent 78% of their business! What happens if one or both of those employee intensive channels fail – even temporarily? Their revenue is vastly decreased. They are only using 6 advertising channels total that rapidly decrease to 10% for Internet programs, solo Direct Mail, and the company website for 5% each and Referrals for 2%.

The greater the number of marketing channels or sources, the greater the opportunity you have of reaching the greatest potential audience for your products and services. With more channels, you’re increasing the opportunity for more customers to see your ads and do business with you. Lastly, you’re ensuring your company that if one channel fails to perform up to expectations, your down-side losses are minimized.

On the other hand, company “B” has 9 marketing channels it uses with the greatest percentage being 15% each for Events, Internet and Referrals with 10% each for Magazines, Broadcast Media and Telemarketing and the remaining 3 advertising sources at 5%. They are reaching broader customer awareness and decreasing their risk for any one or several sources under-performing.

I certainly am not advocating that you have to advertise in every media that knocks on your door wanting your business; however, I am counseling you to review what channels you are currently using and the percent of both leads and revenue that come from those channels. Hedge your bet as best as you can. Each of you know what advertising sources are available in your area and with proper tracking and testing (the topics of our next 2 articles), you can possibly use more channels to reach potentially un-tapped customers. Advertising in more sources also helps ensure your business has continued success if some of those sources “fall off the table.”

“Look For Lots Of Ideas. ‘The best way to get a good idea,’ recommends chemist Linus Pauling, ‘is to get lots of ideas.’ The next time you have a problem, don’t stop with the first right answer. Look for other right answers. How do you keep a fish from smelling? Cook it when you catch it. Throw it back. Keep a cat near. Burn incense. Cut its nose off.” – Roger von Oech, Creative Think and author of “A Whack on the Side of the Head” and “A Kick in the Seat of the Pants.

Have a pizza party and order as many ingredients on different slices of your pizza as you can so that everyone you invite over will find a slice they want to eat. And please remember, “Keep Your Attitude Half-Full, not Half-Empty!”

John Clements is a Direct Response / Lead Generation Marketing consultant.
www.ClementsMktgGroup.com

That being said, it is now even more important to establish a trustworthy working relationship with clients. Much of the problem is a scary economy and detached corporations making ridiculous promises. But, aside from a threat to business, this is an excellent opportunity to build trust and a lasting client base. Here are some ideas for doing just that:

1. Pick up the phone. We’ve touched on this before. Keeping in touch with clients during the job and after the work is done will instill trust and confidence in your clients. This is not to encourage harassment or phone sales. Just get to know your clients and check back in once in a while to make sure everything is holding up okay.
2. How’s your advertising? Perhaps you can rework your ads – in the paper, on TV, or in the yellow pages – to convey a deeper sense of trust. You want your ad to make clients want to shake your hand. At CalFinder, every certified contractor is interviewed after approval so customers can read a unique company bio, not a cookie cutter version of who you are.
3. Shake a hand. Especially if you don’t use typical advertising avenues, getting to know people and speaking frankly and honestly is key. You want to invoke trust. So make them trust you. Guarantee your work – if it goes awry you’ll fix it.
4. Join the community. Join the association. If you’re shaking hands, then you’re already being a part of the community. In times of economic stress it is the local community that keeps the local economy afloat. Now, there’s no need to run for mayor or city council, but attending community events and mingling may just be the best advertising right now.

Also look into joining associations like the Better Business Bureau, NARI, NAKB, NAHB, and other organizations that give you added credibility and your client the sense that you are serious and dedicated to your trade.

This does not mean blatant solicitation. It is a matter of keeping in touch with past clients, making sure that your craftsmanship is holding up and satisfaction levels remain high. It makes perfect sense. In slow times, it is the contractors who build and maintain a relationship with clients that keep working. Despite the economy, many of the homeowners who could afford a new kitchen last year can afford a new bathroom this year and, considering the heightened competition for jobs, communication with clients is likely your best bet.

Not only does this facilitate repeat business, but it will also improve the likelihood of recommendations to friends and family. A homeowner with solid confidence in their contractor is more likely to give a project the green light. There is no doubt that times are tough; all the more reason for checking in before your work checks out.