What is an HVAC Lead Worth?

Customer acquisition is the lifeblood of any growing HVAC business. Your business needs to be filling its sales funnel with new prospects on a daily basis, or risk losing its existing customer base to relentless competition and other forces of attrition. But to get those new customers in the door, you need HVAC leads. And you need lots of them.

As a savvy business owner, we’re guessing you knew that already. However, you may not have realized that it’s very easy to determine what the average HVAC lead is worth. Some basic data analysis will enable you to make better decisions when trying to determine how to spend your advertising and marketing dollars.

How Much is a New HVAC Sale Worth to You?

Before we deep-dive on how much an HVAC lead is worth to you, you’ll need to figure out how much an average HVAC sale is worth to your company. How much revenue is associated to the average job, and how much overhead is directly attributable to that job?

Figure out those two numbers, and then subtract the overhead from the gross revenue. Express the sum as a percentage of the gross revenue, and you’ll have your margin.

For example, let’s assume the average installation job for Excellence Heating & Air is $7,000, and the typical margin on that sale is 35 percent (just for the sake of argument). The gross worth of that sale for Excellence Heating & Air as the installer would then be $2,450.

That’s how much an HVAC sale is worth to your company, but figuring out the actual value of an HVAC lead goes way beyond that.

So How Much is an HVAC Lead Worth?

You probably came to this page looking for information on how much an HVAC lead should cost — that’s a slightly different question, but we’ll get to that in a moment. For the time being, though, we’re going to talk about how much one of these leads actually is worth.

Clearly, the value of these leads will depend on the type of sale you make. A lead that results in a new system installation is going to have a lot more value than one that precipitates a basic service call. But all of these leads are worth far more than the initial sale because they’re establishing a relationship with new customers that can continue to yield revenue.

So to really understand how much one of these leads is really worth, you have to think about the lifetime value of that successfully acquired customer. Every subsequent repair or maintenance visit increases the value of that initial customer acquisition. If the aforementioned installation lead successfully converts for Excellence Heating & Air and that customer continues to call for service, that lead actually is worth much more than $2,450.

But to simplify things a bit, let’s just focus on the value of that initial sale. The next step is to look at how many of your leads are turning into sales. For the sake of argument, we’ll say that 10 percent of your leads become actual jobs (although you probably could increase that number significantly by training your CSRs and listening to your calls). That means you’d more or less see some return on your investment if you paid $245 a lead.

What Should an HVAC Lead Cost?

For HVAC companies, there are considerable financial challenges associated to acquiring new business. According to a report by Energy.gov, “Acquiring customers through marketing can represent a significant expense for HVAC contractors. Industry sources estimated that acquiring a single customer costs an HVAC contractor between $200 and $300.”

This also is supported by numbers from the Air Conditioning Contractors of America (ACCA). By ACCA’s estimation, the average industry cost per lead (CPL) is between $250 to $300 per lead.

The Industry’s Lowest Cost Per Lead

To maximize profitability and pursue aggressive growth goals, of course, your CPL should actually be much lower than that. To achieve this, however, you need a comprehensive HVAC lead generation solution that covers all major marketing channels.

At Mediagistic, our suite of LeadBuilder® internet marketing solutions boasts the industry’s lowest CPL. During the past year, our programs have delivered an average $11.19 CPL for phone calls with a duration of 30 seconds or longer. To date, we’ve generated more than 1.7 million leads for hundreds of contractors nationwide by using a holistic, turnkey approach to HVAC lead generation. Contact us today if you’re looking to grow your HVAC business and accelerate customer acquisition.

Brantley Smith is the Vice President of Digital Marketing and Product Innovation at Mediagistic. He is a big picture sort of guy. If you want to know what the future is bringing, he’s a good guy to talk to. His entrepreneurial DNA led him to start up four tech companies before age thirty-five, one of which he navigated through its merger and acquisition by publicly traded Online Outpost Licensing Corporation. Connect with him on Linkedin.

Image via Thinkstock