Analyzing Cost per Sold Job and Cost per Lead Monthly Trends
Are leads getting more expensive?
👋 Hey, Jon here. I’ve heard and seen rumblings (particularly in Facebook groups right now) that marketed leads are getting more expensive.
This newsletter is going to dive into that very topic looking at:
Month-over-month cost per sold job and cost per lead trends from marketed leads dating back to December 2021
How much more expensive sold jobs have gotten
The least-expensive months for sold jobs of 2022
The most expensive months for sold jobs of 2022
PS - Be sure to catch my webinar, How to Convert More Customers in 2023 with Schedule Engine and Service Titan on Thursday, February 2nd at 1 pm EST / 10 am PST. I’ll have lots of good data, benchmarks and insights from 2022 that can help you succeed in 2023. Here’s the link to register.
Let’s dive in!
What’s a Sold Job?
Let’s first start with a quick definition so we’re all on the same page about what’s discussed in this article.
Sold Jobs include sold jobs (scheduled) and closed job (completed work) for a specified time period.
SearchLight typically calls this booked jobs in our reporting but understand that many of you look at the revenue flow in the following order:
Leads get booked (appointments).
Booked jobs get run (show up to said appointments).
Run jobs get sold (customer agrees to do business with you).
Sold jobs get collected (customer pays you).
In this case, we’re looking at how much it cost to get sold jobs (includes BOTH scheduled and completed work that’s been collected) based on the marketing spend for PPC and Facebook.
Cost per Sold Job Increased 55% Year-over-Year
The question “are marketed leads getting more expensive?” is pretty succinctly answered here in that yes, leads and sold jobs have gotten more expensive.
In the first 6 months of 2022, the cost per sold job was never higher than $338.95 with 4 months below $300.
But in the last 6 months, we haven’t seen the average cost per sold job drop below $342. 🤯🤯
In December 2021, the average cost per sold job was $225.42, but in December 2022, it was $350.51, a 55% year-over-year increase, despite a cost per lead YoY increase of only 16%.
Keep in mind, there was a late December cold snap that increased lead volumes (the highest volume in 2022) dramatically, but a higher percentage of those leads did not convert to sold jobs, exacerbating the higher cost per lead YoY.
In that same year-over-year period, average tickets did increase, but only by 7%.
Time of year matters, so let’s look at the least expensive months to get a sold job.
May, June and July Were the Least Expensive Months to Acquire Paying Customers
We know that weather impacts demand, so when looking at cost per sold job, time of year and weather matters.
In 2022, May, June and July had the lowest cost per sold jobs from PPC + Facebook leads, with June being the least expensive month:
May: $273.71
June: $242.25
July: $274.49
We will track the same trends this year to see if it holds, but if you’re thinking strategically about your marketing budget and know these numbers for your business, consider getting aggressive over the summer with ad spend, messaging, channel mix and budget.
Cost per lead was also the least expensive in May and June (22% less expensive than the 2022 average).
July had the 3rd-lowest cost per lead, but was only 8% less expensive than the average for 2022.
September Was the Most Expensive Month for Sold Jobs and Cost per Lead
September was a brutal month coming in with the highest cost per sold job and highest cost per lead in 2022.
Cost per sold job was 31% more expensive in September and cost per lead was 25% more expensive than the averages for both of those metrics in 2022.
From a strategic standpoint, months like this are ripe for targeted messaging to your existing customer base, incentives for customers to pull work into that month, more aggressive discounting, a push for tech flips, and opportunities to dial-back ad spend in favor of other marketing activites.
Many factors are at play here - this won’t mean in 2023 that September will be the most expensive from a marketed leads standpoint, but it’s important to track these metrics and trends so you can alter your strategies based on demand and how expensive that demand is.
August, October and April were the 2nd, 3rd, and 4th most expensive months for marketed leads respectively.
Closing Thoughts
Cost per sold job can tell you a lot about your market, your business and your marketing strategies in a given time period, but it is a lagging indicator.
There are a lot of factors than can influence how expensive it is to acquire paying customers, like the cost of marketing (e.g. rising cost per click), organic demand, competition in your market, lead handling, time to close, and friction in the customer experience.
Improving your lead handling (match rates, booked job rates) is in your control 24/7 and one of the first steps we always recommend tracking and improving.
And despite cost per sold job being a lagging indicator, you can use historical cost per sold job to ancitipcate trends during various parts of the year and curate strategies that optimize your customer acquisition process for your specific market and business.
Pair that with leading indicators like prior month sold jobs, and early lead volume in the month and you can adjust faster than your competition based on available demand.
In simpler terms:
There’s never a bad time to make sure inbound leads from all conversion tools are answered quickly and followed up on.
There’s never a bad time to mystery shop your own website (on desktop and mobile) to ensure a good customer experience.
There’s never a bad time to think deeply about how to segment your existing audience and what messaging you could use to re-engage them depending on where they are in the customer journey.
It’s always worthwhile to think about the time of year, weather and your historical trends when setting budgets and marketing strategy for the upcoming months.
Until next time . . .
-Jon