Contracting businesses are run by people with a variety of skillsets. Some came up the ranks through sales and are natural networkers and comfortable with canvassing. Others started in the trades, and are more comfortable doing the work than selling it. Very few came up through marketing, and as a result, many owners and general managers are suspicious of the cost, and value of marketing investments. In our dealings with contractors we have found five common marketing misconceptions that need to be debunked.

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Table of Contents

1. Exclusive leads are the best leads

Every business wants customers where there’s no competition, right? But when it comes to purchasing leads, is it really possible to get “exclusive” leads? Lead generation companies charge a premium to put you in touch with a homeowner searching for a contractor, when they state that you’re the only one getting the information. However, it’s often the case that those leads are not truly exclusive, because most homeowners search extensively online in advance of their project. According to our latest Modernize Homeowner Index Report, 51% of homeowners research their project online, and nearly 30% of them spend more than 10 hours researching their project before connecting with contractors. During that research time homeowners are reaching out to contractors directly, filling out multiple forms online, and getting input from friends and family. So, while there’s a premium fee for “exclusive” homeowner leads, it’s likely that several contractors in your area already know about it through various sources.

Another note to consider is that most homeowners want more than one contractor quote to feel confident they’re making the best decision about their project. Winning contractors know they need to serve the homeowner’s needs, which means you’re likely to compete with other contractors. Make your business stand out by with helpful and trustworthy guidance as they make their selection.

2. You can grow your business with referrals

Referrals and word-of-mouth business is the best, isn’t it? The recommendations of family and friends are among the most important factors for homeowners when they select a contractor. However, it’s hard to scale business solely through referrals. Home improvement businesses need to create a balanced marketing “diet” in order to achieve predictable growth throughout the seasons.

Think of your marketing mix as a financial portfolio – While one stock may perform consistently well for you, market shifts and slow periods are inevitable. It’s wise to diversify your portfolio for the sake of consistency and increased growth. In your marketing mix, you should have a balanced diet consisting of referrals, print ads, digital marketing controlled by your business, and leads from third party providers.

3. If a lead doesn’t close, it’s dead.

Many contractor sales people grow impatient with new business leads that don’t quickly turn into qualified prospects. Try changing your mindset, and try to stop using the impersonal label of a “lead.” Your prospects are living, breathing, people who own homes and are seeking services. They’re homeowners. These real people often need time between when they start making inquiries to when a project is completed. According to our research, 58% of homeowners pause their project because they found they weren’t financially ready for the complete project. That same research tells us that most homeowners are planning to begin their project more than 30 days after their inquiry (or form completion). Just because they need time does not mean they’re a dead or bad “lead”. Many homeowners need nurturing, such as consistent follow ups via email drip campaigns, direct mail, and phone calls. It’s usually a good idea to help homeowners understand how they can financially plan for their project . Can you deliver financing options for them? Shifting your approach to being a helpful source of advice instead of the hard sales pitch can help gain the homeowner’s trust and respect. Then they’ll choose you and refer you to their friends down the road.

4. Digital marketing doesn’t work

Contractors can easily get a bad taste in their mouth regarding marketing where the return on investment isn’t clear. And most contractors haven’t “connected the dots” to show how contacts turn into leads, then meetings, then customers. If you’re investing in digital marketing – and you should be – it is fully possible to know the exact returns from that investment. What you need is a system for lead source tracking. Luckily, there are a wider variety of tools available to provide clear lead source tracking through your sales funnel such as CRMs, Google Analytics, and marketing automation tools.

Traditional advertising, including radio and billboard ads, tv commercials, and canvassing offer virtually no way of tracking the lead back to the source. That is, unless you ask the homeowner how they found you, and they remember the specifics. Yet many home improvement businesses still pour money into traditional ads because they’re afraid of change. And because they’re not tracking lead sources throughout the sales funnel. If you put a good lead source tracking process in place, you can hone in on the channels and campaigns that really work. Then you can turn the volume up on the winners, while dialing down the underperforming sources.

5. Purchased leads are too expensive

Does it really make sense to spend $50, or $30 or $75 per lead when there’s no guarantee they’ll close? While every business owner knows they need to spend money to make money, many aren’t sure that investing in third party leads would provide a positive return. However many contractors do find that, for every $1 they spend, they realize $10 in revenue. However it does depend on the quality of the leads and how well they’re optimized throughout the sale funnel. Sure, there will be some leads you purchase that will never turn into a sale. Look at the big picture: suppose you purchase 100 leads at $50 each, for a total pilot investment of $5000. If 20% of those leads turn into an appointment, you’re paying $250 per appointment. If 20% of appointments turn into a project, you’ve spent $1,250 per project. If the average project size is $12,50, you’ve generated $10 for every dollar spent. Just as with any of these five points, there are some downsides, but if you focus on the big pictures of marketing, you can see there’s a overall positive return on investment.

Don’t fall victim to these common myths that can cost your home improvement business valuable dollars. Debunk the misconceptions that are keeping you from growing to your full extent.

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