Why More Leads Is Only HALF The Solution If You Want Increased Turnover…(and Profit…)
What is the aim of “running-a-business-game”? …Making profit of course. However, with countless factors instrumental in achieving this, simply making profit is easier said than done.
For profit to occur you need sufficient turnover, enough to buffer all the overheads in your business whilst leaving money (profits) leftover.
For turnover to occur you first need CUSTOMERS because without them you won’t have a business. Trade business owners often blame their lack of turnover to the number of leads they are getting. But, the reality is, getting new leads is only half of the solution. We discuss this in detail at ‘The Future Tradie’ live events.
We spoke to a new member recently who was unhappy with the turnover and profit he was getting from his business. For the purpose of this article, lets say he was doing approximately 20 quotes a week. He was convinced that marketing for more leads, and doing quote after quote, would help him reach his desired turnover and profit targets. And, he was right (but only to an extent…)!
What he hadn’t considered was the rate at which he was converting his leads into customers. We discovered that of the 20 quotes he was doing, he was converting 40% of them, leaving 12 lost leads. That is 12 quotes worth of turnover he was not making on a weekly basis!
To make the numbers easy to understand, if the average dollar sale is $10K, that’s $120K of lost turnover for the month, equating to $1,440,000 of lost turnover for the year… Ouch!
With this in mind, the lesson is clear – to get customers, consider your leads but be equally mindful of how well you are converting them into customers.
Interestingly, the reason why the remaining 60% of quotes didn’t convert was not necessarily because this business failed to follow them up (even though this is so often the case in other businesses). In fact, it was simply that the ‘touch-points’ along the way were not optimised well enough to encourage leads to convert into customers.
That said, do you think it is time to evaluate the process you use to convert your leads? If so, then read on…
To determine how well you convert your leads start by listing all the ‘touch-points’ your leads have with your business before they officially become customers. With this list you can evaluate the ways you could optimise this process to improve your lead conversion rate and hence turn your lead to a paying customer.
Lets talk ‘touch-points’ so that you get what we mean;
‘Touch-points’ start even before the potential customer has contact with your team. It starts with a referral, or browsing your website where they immediately form an opinion about your business. Think about what your website is ‘saying’ about your business – do you show how you solve the customers problem? Are you proving you are an authority in your trade through winning awards, customer testimonials, professional before/after images or even more detailed information specific to the problem they have, and you solve, especially if the average dollar sale is high.
The point here is; the higher the average dollar sale the more they will read your website and take note of every page.
It makes sense that if you are building a house with an investment of $500K you would want to know even MORE about the business than if you were making a decision to fix taps/toilets for $300. You’d invest way more time to ‘get to know’ the company before you even called them to arrange a quote.
The ‘touch-points’ continue with the first phone call to the business. The way you answer the phone, the tone you use and how friendly, helpful and easy to deal with you are will all help convert your lead into a customer. These all seem like minor details, but in the big scheme of things, they all help build trust and confidence in you and your business for the potential customer.
Once in contact with your business, what do you do before you arrive on-site to ensure they understand you are on the way?
What happens when the tradesman is on-site providing a quote?
Do you repeat their concern/s back to them to show you have listened, provide solutions and suggest options when possible, show that the solutions you are providing offer value for money?
What if they choose not to proceed with the quote on the day? Do you leave behind the quote and some information about the business that again helps build trust and their confidence in you as the right choice (include anything that adds credibility e.g. testimonials, awards).
How long do you wait until you follow-up with any outstanding quotes? Who calls? What do they say?
At the end of the day, a customer will choose a trade business that they believe is trustworthy, credible, gives the most value and provides the best solution. An effective conversion process, that builds trust and credibility with each ‘touch-point’, will help do exactly this.
Leads are a valuable resource to a trade business and wasting one is equivalent to wasting all the time and money spent getting the lead in the first place.
If turnover and profit are important (as they are for every trade business), then it’s important to attract consistent A grade leads. But, it’s also important to give as much thought into how you are converting them into a customer. Think about the ‘touch-points’ they experience and how these ‘touch-points’ build trust and confidence each step of the way. You never know the difference it could make!
- Join our Kick-Ass Tradies Facebook Group, for access to trade business specific conversations, tips and resources, plus a like-minded community of tradies.
- Book a 15-minute Game Plan Call with Andy, owner of Dr. DRiP plumbing and co-founder of Lifestyle Tradie, to clarify your priorities and get clear action steps.