Video Transcript:
Speaker: Mike Layton
Hey, this is Mike Layton from Stochastic Marketing again.
A kind of quick commentary on the age old battle between I need more leads versus you should do something better with the ones I’m giving you today.
Typical struggle between sales management and advertising. Sometimes the owner has to be the judge there. But very quickly, as you may know, we take all the sales results from hundreds and hundreds of contractors and we run them through our analytics, and they’re in one giant database. And one of the benefits of that is when your sales manager comes in and says, I need more leads, I need more leads, we can track his replacement efficiency.
So we know that this individual contractor that I’m showing and replacement efficiency is defined as the number of non replacement households that you have to go to to find that one good replacement. And if I grade them on an ABCD and I’ll leave off the F, this is the trend left to right for the industry as a whole. And you can see over time, even the D students are getting smarter in time.
Now, this individual contractor, he needs 6.48 service repair households per install. So that means he’s a below D this year. Last year, he was also a D. In fact, he’s always kind of been a D student, but on new customers. Which answers the question of how many leads do I need? Same period. These are people who first showed up in the homes this year, taking off the F just for scale reasons.
If you’re budgeting for 2023 and use this year as an example for new customers. He’s kind of a C student, so he needs 4.1 to service or repair new customer households for each install. So when you’re laying out your sales budget for 2023, in this contractor’s case with new customers, he’s been pretty decent. Last year, he needed 3.59, this year, 4.2. So he’s gotten a little worse than he did last year.
And the trend for everybody else right now is the average contractor needs 3.63 service repair houses per install. And that should help you at least start off a conversation versus how many leads do I need? Or I need more? What are you doing with them? And it’s easy for us to calculate this.
And if I can help you plan for 2023, don’t hesitate to ask. My number is 314-368-6971.