Here's How Many Clicks from Google PPC, Bing PPC and Facebook Turn Into Revenue
Cost per Click is one of the most talked about digital marketing key performance indicators in the home services industry, because after all, someone needs to click on your digital ads to start engaging with your business.
However, cost per click is often weaponized to highlight:
(1) Why digital marketing (especially PPC) is too expensive
and
(2) Why some agencies are better than others because they have the secret sauce of keywords that aren’t expensive
The problem with these arguments is that they don’t tell the complete story because no one seems to be tracking clicks to revenue (until now).
Let’s break down an example to illustrate why you need the full picture, then we will get into the data we found on our tracking platform.
Imagine that the cost per click for “central ac installation near me” is $100 in your market.
You spend $1,000 to get 10 clicks and only 1 of them turns into revenue.
Let’s say your average ticket for an ac installation is $8,500 and your margin is 60%, which leaves you with $5,100 in profit.
You spent $1,000 to get $5,100 in profit, which is a 5.1x return on profit.
And you got a 8.5x return on ad spend in terms of revenue.
This assumes a 10% click-to-revenue (which the data will show is not that high) but illustrates that evaluating cost-per-click in a silo might lead to some wrong conclusions.
Let’s dive into the actual data from 118,420 clicks on Google PPC, Bing PPC and Paid Facebook ads 👇
What Percentage of Clicks Actually Turn Into Revenue for HVAC Contractors?
We tracked 118,420 clicks from Google PPC, Bing PPC and Paid Facebook marketing campaigns all the way through to revenue and found that:
2.04% of clicks on PPC and Facebook marketing campaigns turned into revenue.
Let’s break it down further:
Clicks: 118,420
Leads: 12,439
Sold + Closed Jobs: 2,415
This leaves us with a Click-to-Lead Rate of 11% (simply means that 11% of clicks turned into a lead) and a Click-to-Revenue Rate of 2.04%.
Closing Thoughts
This analysis includes a wide variety of HVAC contractors - some who convert more of their leads with higher match rates and others who need to improve their lead handling.
For example, one client saw a click-to-revenue rate of just 0.83% while others saw as high as 3.51%.
So, yes, high cost per clicks can be unprofitable for your business, but it’s a symptom, not a cause.
High cost per clicks on repair / maintenance keywords aren’t good if those aren’t turning into installations.
High cost per clicks on installation keywords aren’t good if you have a low match rate or a low closing rate.
That’s why it is so critical to measure all the metrics1 that make up revenue flow to tell the full story, not just a part of it, which could impact the way you market your business.
Revenue Flow Metrics: Leads, Matched to CRM, Booked Jobs, Match Rate, Booked Job Rate, Average Cost per Booked Job, Average Ticket, Revenue Potential, Revenue Closed