Small Business Tips: How to Improve Leads and Sales
Contractors including restoration service providers devote much of their marketing efforts to generating good leads they can convert into sales. However, despite these efforts, some contractors are either not generating enough sales or have hit a plateau. When sales numbers are not where a contractor wants them to be, it can be difficult to tell if the problem is the quality of the leads they are getting, or if the issue is converting the leads into sales.
When sales numbers are down but the number of leads looks good, then there is a problem in the lead to sale process. It is very important for contractors to make sure they are converting their leads at a good rate because repeat customers for contractors are rare. The best way to assess the effectiveness of your sales is to measure Key Performance Indicators (KPI) in the lead to sale process.
In this guide, we will discuss sales KPI and how they can help you determine if your business has a problem converting leads into sales. Measuring these KPIs will expose inefficiencies in your lead to sales process and help you fix these issues to boost your lead conversion rate and raise sales numbers.
Data Points for Leads and Sales
Before you identify and measure your sales KPI, you need to have data points established to track your leads. You need to know how many leads you are getting, when and who they are coming from, and whether they have been converted into a sale.
For restoration contractors, the best way to track your leads is with call tracking. You can do this by using call tracking software and tracking phone numbers to track the number of leads and where they are coming from based on where you display the tracking numbers. You can also work with a lead generation service provider like RestorationMaster that can track your calls using lead tracking software and send you the reports.
Customer Relationship Management (CRM) Software
The next step after setting up call tracking is to integrate the tracking with your Customer Relationship Management (CRM) software. If you are not already using CRM software, there are plenty of options available that will allow you to integrate your call tracking.
Many CRMs allow for automatic integration so that the tracked phone calls you receive will be automatically entered int the CRM. With the calls entered into the system, it is much easier to keep track of the lead in the lead to sale process.
Sales KPIs for Restoration Contractors
After setting up your lead data points with call tracking and CRM software, you should be able to determine the effectiveness of your leads by analyzing the following sales KPI. These key indicators measure what happens to your lead from when you get the lead to when it becomes a sale. Measuring and analyzing these sales KPIs will help you pinpoint problems in the lead to sale process that need to be addressed.
You should start by calculating the average cost of each lead from a particular source. You can calculate this by dividing the amount of time spent getting leads from each source by the number of leads you get over a certain time period. This will give you an average cost per lead.
The contact rate is the rate in which you are successful in contacting your leads. If your contact rate is low, this could mean that you are getting bad leads, bad contact information, or are receiving your leads late. A high contact rate means that you are generating quality leads. You can calculate your contact rate simply by dividing the number of leads you have contacted by the number of total leads measured.
Conversion to Appointment
The conversion to appointment rate is the rate at which leads are setting an appointment to talk to someone from your company. If your conversion to appointment rate is too low, this could be due to poor quality leads, generating non-exclusive leads, or trouble contacting leads to convert them into an appointment.
You can calculate the conversion to appointment rate by dividing the number of appointments set by the total number of leads measured.
Appointment to Sale
The appointment to sale rate is the rate that your appointments are turning into a converted sale. This metric will give you an accurate closing rate that can serve as a baseline for measuring how well your sales team is performing. This is one of the most important sales KPIs to keep an eye on.
You can calculate the appointment to sale rate by dividing the number of closed sales by the number of appointments.
Lead to Conversion Rate
The lead to conversion rate is a more holistic measurement that measures the rate at which your leads convert into sales over the entire lead to sale process. You can calculate your lead to conversion rate by dividing the number of sales by the total number of leads.
Average Sale Amount
This metric is the average amount of money your business makes on each lead converted into a sale. A high average indicates that your sales reps are performing well and upselling. If this average is low, then you may be getting a lot of calls for low priced projects.
You can calculate the average sale amount by taking the total sale amount over a given period of time and dividing it by the number of sales.
Cost Per Customer
The cost per customer is what your business pays for each lead that turns into a customer. This will give you an idea of what a good lead costs your business. You can calculate this cost by dividing the total revenue received from customers from a lead source by the number of leads converted into a sale.
Return on Ad Spend
This metric helps you measure the return your business is earning from the money you spend on advertising and marketing. Calculating your return on ad spend can help you determine the profitability of different lead sources and identify ineffective marketing tactics.
You can calculate your return on ad spend by dividing the total revenue earned from one lead source in a period of time by the amount you spent on that lead source in the same amount of time.
Why You Should Measure Sales KPI
Many businesses may focus on the big picture when it comes to generating leads and converting them into sales by paying attention to their lead to conversion rate. However, if the overall conversion rate is not where you want it to be, you need to break down the lead to sale process and analyze the KPIs listed above. This will give you a more accurate picture of what is happening at every step of the lead to sale process so you can quickly find and address inefficiencies.
Lead Generation Services from RestorationMaster
For contractors such as restoration service providers, their business relies almost entirely on generating good leads and converting them into a sale. At RestorationMaster, we provide lead generation services for disaster restoration contractors through our website restorationmasterfinder.com.
Restoration contractors included on restorationmasterfinder.com receive exclusive leads from within their service areas. Our professionals will set up a tracking number and send you monthly reports to help you keep up with the restoration leads that you get from us. Contractors that have worked with RestorationMaster have experienced an increase water damage leads and fire damage leads for an excellent return on investment (ROI).