April 2023 HVAC Demand Trends - SEO Edition

👋 Hey, Jon here. This week we are taking a look at SEO / organic HVAC demand trends through the first 12 days of April, which revealed a fascinating insight about applying context to avoid false positives and false negatives when analyzing performance.

Before we get into the data and that insight, I wanted to thank ServiceTitan (a number of subscribers here work there, so Hello and thank you!) for featuring our data in their latest blog about online scheduling, which you can read here. How customers convert on your site is just as important as how they found you in the first place, and I’m glad that message is echoed in the article:

Source: https://www.servicetitan.com/blog/success-story-schedule-engine-fuse-service

With that, let’s dive in and see how SEO / organic demand has been compared to the previous 12-day period.

Lead Volume Dropped by 9% From The Prior 12 Day Period

Throughout the first 12 days of April, lead volume from organic channels is down by 9%, which is quite a bit more than the previous month (-1.5%).

However, part of this is due to the fact that April 1st was a Saturday, and we know that SEO lead volumes are at their lowest on the weekend:

This 12 day sample has two weekends, whereas the last 12 days only had one weekend.

This may seem like a detail too-in-the-weeds but it is important to call out.

At face value, you might be looking at 10% fewer leads so far this month and worry that something might be off with your strategy, or that demand is continuing to plunge, or that the month isn’t projecting the way you thought.

But the detailed nuance here is that four of these twelve days have been weekends, which will impact performance (see the chart above, only 10% of total lead volume and 10.8% of total revenue from SEO come in on the weekend).

It Cost $117.12 to Acquire a Paid Customer from SEO, Up 10% From The Prior Period

Measuring customer acquisition cost (cost per paid customer) from SEO / organic is always tricky because these channels are free, but many of you invest in a website and SEO management, so as mentioned in previous newsletters, we use those fees as the cost-basis to calculate ROI.

A strong organic presence offers an opportunity to acquire customers at a low cost - marketed leads are much more expensive year-over-year, and we’re seeing organic come in at about one-fifth of the price.

Some readers are advanced and calculating this already, but if you haven’t tried measuring an SEO ROI using your fees as the cost-basis, it could help provide a baseline customer acquisition cost to improve upon. And, if you try something new and different, you can see how it affects CaC, but only if you are tracking it in the first place!

20% of SEO Leads Turned Into Paying Customers

It is early in the month, so we expect this number to go up, especially because open estimates increased 38% from the previous period, but I know this number surprises people when we share it.

In some cases, leads have no shot at new revenue - it could be a vendor calling in to pitch you a service, an out-of-service-customer, an existing customer checking on an appointment and so on.

Strategy, inbound lead-handling, website experience, capacity and outbound follow-up all play a role in converting qualified leads to revenue, and lead-to-revenue benchmarks give you something to optimize and target for.

It’s worth mentioning that 31% of SEO leads matched to a new opportunity in the CRM/FSM, while the typical average is 35%.

Based on this sample and the averages we track, about 1 in 3 SEO leads are qualified and ready to spend money with you. This will vary by market, strategy, etc. but we offer this as a benchmark to measure against your own performance.

Revenue Potential Is Down 23% From The Previous Period But ROI Was A 13.7x

To start the month, the potential revenue (open estimates + sold revenue + closed revenue) is down 23% from the prior 12 days.

Again, because 4 of the 12 days of this month were over the weekend, it is not surprising to see less revenue opportunity, but is something we’ll keep a close eye on.

Specifically, we’ll watch to see of open estimates move into a sold phase, otherwise there is likely a need for a more focused follow-up process.

Despite lower demand so far in the month, every $1 spent has returned $13.73 in closed revenue, so returns are still healthy.

It’s also worth noting that 66% of paid customers from SEO in this sample were new customers, and the average amount spent (new and existing) was $2,587.15.

Key Takeaway

When I first started writing this article, it was concerning that revenue potential and closed revenue dropped noticeably from the prior 12-day period.

I wanted to know why this happened and if there was a problem for some or all of the businesses we measured this data for.

Most of us can probably relate to that feeling in the pit of our stomachs when revenue performance is under-performing and we are accountable for it.

Then, I remembered that 4 of the 12 days of this sample occurred over a weekend, when lead volumes and generated revenue tend to be significantly lower than other days of the week.

That’s not to say looking at month-to-date data is wrong (versus a full month or week-over-week) but the takeaway here is that the right context can save you the headaches from false positives or false negatives with data.

I had to pause and stop my alarm bells to think through it and apply context based on other data we track and measure, which led me to the conclusion that this drop is expected.

So the next time you are looking at month-to-date data compared to a prior period and see performance that looks “off”, remember to check and see that both comparison periods have the same amount of weekends!

I hope this helps!

Until next time . . .

-Jon

PS - I have to say it (I know, it’s three or so weeks of this in a row): I am still absolutely stunned and humbled by how many of you are sharing this newsletter. We have thousands of readers each month and I just can’t thank you enough for sharing this to colleagues, friends or on social media.