The 7 Immutable Laws of Contractor Lead Generation

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Laws of Contractor Lead Generation1

Over the last nine years, working with home improvement contractors across the U.S. and having seen many different forms of contractor lead generation, we’ve discovered these seven “immutable” laws that apply to all contractor lead generation.

They apply universally, no matter which method you use to generate new customers for your contracting business, or which firm you partner with to assist you.

Follow them, or risk sinking your marketing dollars into a black hole.

  1. The Law of Time
    Contractor leads are only as valuable as they are fresh. Time is of the essence. The more time it takes you to talk with a prospect after he makes his first inquiry, the tougher it will be to convert that lead into a paying customer. This is especially true with email leads you may buy. Your best chance at converting a prospect into a paying customer is when he calls and speaks with you directly at the moment he’s interested in setting an appointment to receive an estimate. 
  2. The Law of Value
    You get what you pay for. While there are many different types of contractor leads that home improvement contractors can buy, cheap leads will always be less valuable leads. They will be tougher to convert into paying customers for your business. The most expensive leads are priced that way because it costs more to generate those valuable prospects. But, by comparison, those prospects will always convert into more new customers for your business as a percentage of leads purchased – and will take much less effort for you to convert them as well. When you add in the value of all the time involved to convert the cheap leads into customers, the pricier ones will always be a better value. 
  3. The Law of Intention
    The value of a sales lead is in the intent of the person inquiring. What is the source of the contractor leads you are buying? What is the true intention of the person inquiring? Is it to set an appointment with you and potentially hire you for a home improvement project, or to simply to get information? Leads generated from lists and common content website forms are people simply looking for information. These prospects are not intending to get an estimate and hire a contractor at that moment – which severely depresses the value of those leads. On the other hand, leads which are live phone calls of people who have searched the internet to find a local contractor to do business with – are extremely valuable. These people do intend to hire a contractor. 
  4. The Law of Sales
    A lead will not close on its own. It’s still up to you to make the sale. The ultimate success of your lead generation program is in your own skills and ability to close the leads you receive. While some lead sources are considerably more likely to convert into paying customers than others (see Laws 1, 2 and 3), it will still take a certain amount of effort on your part. Leads require sales to become customers. The better you are at sales, the better the ROI of any lead you buy. 
  5. The Law of Visibility
    Before a prospect can call you, he first has to be aware that you exist. The core of every contractor lead generation program, no matter which media strategy it uses, relies on providing visibility for your firm to an audience of potential customers. The better your exposure to the right prospects, the stronger your lead generation program will be. Of course, visibility costs money. 
  6. The Law of Experience
    The more experienced you are, or your lead generation provider is, at contractor lead generation, the more successful your campaign will be. With experience comes knowledge – which offers, content, strategies, etc. pull the best leads and result in the best ROI. If you are new to lead generation, it’s well worth working with an experienced lead generation partner. 
  7. The Law of Cash Flow
    You must have your company’s cash flow process working properly or your lead generation efforts will quickly come to a halt. Always pay for your lead generation with delayed terms, so you get the leads first, have the ability to close them, and collect money from your customers, before you have to pay your lead provider.

Author: Jim Rauch

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