[FREE RESOURCE] How to Know If Your Marketing is Making You Money

Whether you own a smallish home services company and you spend a lot of time in your truck, or you’re the marketing director for a massive business, one thing’s for sure: You have a crap-ton of stuff on your to-do list.

And, if you’re like most folks we talk to, one of the last things on your list is “check on marketing ROI.”

It’s not because you don’t want to know. It’s not because you don’t care to know. It’s certainly not because you love flushing money down the toilet. It’s because trying to figure out how your marketing is performing can be stupid tedious. And you’ve got plenty of other tedious stuff going on. (Like trying to optimize your GMB profile.)

And even when you do dive in to try to figure this stuff out, there’s a good chance you’re looking at the wrong metrics.

Clicks and Comments and Likes. Oh My!

Some business owners assume engagement—email clicks, Facebook comments, Instagram likes—is a good gauge of marketing success or failure. And it is. But only if your marketing goal is to get clicks, comments, and likes.

I’m assuming your actual goal is to get more, you know, revenue. And relying solely on “vanity metrics” doesn’t tell you anything about money. Instead, you have to track some other stuff: a couple of marketing KPIs and a couple of business outcomes.

On the marketing KPI side, these two metrics are a decent barometer of if your marketing is taking you in the right direction:

• Website traffic over time. Are you getting more or fewer visits to your site as a result of your marketing? Fewer hits might happen for all sorts of reasons: your on-page SEO might be good, but your backlinks might suck, your Facebook ads might not be resonating with your ideal audience, your Google Ads might be configured for the wrong service area, and so on.
• Percentage of website visitors who become leads. Getting more people to your website is only exciting if said people actually contact you. If you get tons of traffic and no phone calls, your website messaging might be off, your site might be too slow or too clunky on mobile, or you may not have clear calls to action.

And then we have a couple of business outcomes to look at.

• Percentage of leads who become customers. Now we’re getting closer to making money! If you have prospects contacting you but not actually booking calls and paying you, several things could be happening. For example, you might be attracting the wrong (unqualified) leads or you might need to improve your customer service over the phone.
• Revenue generated. This is obviously where the rubber meets the road. And while it’s helpful to know how much revenue each of your marketing efforts is generating, what’s more helpful is knowing how much revenue they’re generating in comparison to one another. So I have a free tool for you!

Use this Spreadsheet to Make Smart Marketing Budget Decisions

Like I said at the top, analyzing marketing ROI can be tedious. This spreadsheet is going to help a bunch.

• Click here to get your free Home Services Marketing ROI Calculator.
• Follow the directions on the screen to make a copy for your use.
• Select the second tab, labeled “Calc.”

Let’s pause here for a sec, so I can talk you through the sample data. 

Facebook Ads 

In row B, you’ll see this company invested $20K in Facebook ads. Those ads generated 150 leads, who turned into 64 customers, who generated $145K in revenue. At first glance, that looks pretty yummy, right? $145K is nothing to sneeze at.

Let’s take a look at the rest of the columns to be sure. For Facebook, the Cost Per Lead (CPL) is $133.33 and the Cost of Acquisition (COA) is $312.50. Compared to other channels, that doesn’t look terrific. But the ROI is 7:1. Meaning for every $1 spent, this company generated $7 in revenue. Pretty sweet.

Billboards

Yep, I’m gonna pick on billboards. This company spent $50K in billboards, got 5 leads and 1—count ‘em—ONE customer that generated $2.5K in revenue. Is $2.5K a big job? Yes. Does it make any sense to spend $50K to earn $2.5K? Absolutely not. 

Your Data

Now that you know how the spreadsheet works:

• Clear the sample data and enter your own. 
• Be sure to type only in columns A through E. I’ve dropped some formulas into the rest of them so you don’t have to hassle with it.

How to Use This Information

Once you have your data in, take a look at the gray boxes in Columns K-L. Those tell you your average CPL, average COA, and average ROI.  Now ask yourself some questions:

• How does my average CPL compare to my average cost per job?
• How does my average COA compare to my lifetime customer value? 
• Which marketing efforts are dramatically outpacing my average ROI? Which are way below average?

Then, do what you need to do to make your numbers better:

• Improve your website conversion rates by attracting the right leads.
• Do more of what’s working and less of what’s not. For example, stop wasting money on billboards and reinvest those dollars in Local Services Ads. (If that’s what your numbers tell you to do.)
• Increase referrals. They cost you nothing. 

Side Note: How to Know Where New Customers Are Coming From

It’s not always crystal clear how a new paying customer found you. So make asking a part of your customer service process. You can use things like call tracking and campaign tracking (if you're using a CRM like Service Titan or Housecall Pro) to make this easier.

(Note: be careful that you understand what your data is actually tracking. You don't want to misunderstand the last thing your customer touched before they found you. Data integrity is a real thing.)

On every call ask, “May I ask how you heard about us?” and then put their answer in your CRM, whether it’s a referral (whom you should thank, by the way), Google, or your billboard. (Although let’s be honest: That one’s highly unlikely.)

Let’s get you more bang for your buck.

Drawing a straight line from a particular marketing channel to increased revenue can be tricky. So let’s talk about it! We’ll give you a comprehensive report so you can see exactly how your marketing’s performing and then, when you’re ready, we’ll help you crush your competition.  Schedule your free consultation now.