HVAC Demand Trends: Google LSA Revenue Performance - March 2024
👋 Hey, Jon here! This week, we’re diving back into Google LSA performance for March 1st - 27th 2024.
Note: This data is from a sample of 20 businesses across the US. Shout out to Josh Crouch and his team at Relentless Digital, who partnered with us to measure lead-to-revenue from their organic and GLSA management services, enabling us to share these trends with you.
As a refresher, below is a summary of February’s performance compared to the prior period:
Spend: -55%
Conversions: -63%
Customer Acquisition Cost: $273.89
Average Ticket: $2,262.95
Sold Revenue: -8%
ROAS Potential: 15.4x
ROAS Closed: 6.5x
Note that spend on GLSA increased 5% from February to March.
Conversions from GLSA Decreased by 6% From the Prior Month
Lead volume took a serious and noticeable hit from January to February with a 63% decline in conversion volume.
From February to March, we saw another dip, but this time by only 6%.
However, looking from January to March, conversion volume dropped by 69%.
That is more than 2/3rds fewer leads than in January.
In my previous GLSA newsletter, I wrote about volume vs. efficiency when evaluating channel performance, and this month we did see improved match rates (+6.5%) and paying customer rates (+9.5%).
So, despite fewer leads coming in compared to February, a higher percentage of those leads turned into net new opportunities and paying customers.
It is still the shoulder season, so hopefully lead volumes will begin to climb as the weather starts to get warm again, but the ROAS numbers below still paint a positive picture for GLSA performance.
Google LSAs Drove a 15.2x Return on Ad Spend Potential in March
In January, $1 of GLSA spend generated $9.15 in revenue opportunity.
In February, that increased by 68%, generating $15.40 in revenue opportunity for every $1 spent.
In March, that has come down slightly, back to generating $15.20 in revenue opportunity for every $1 spent, but is still up 66% from January:
Despite a significantly lower volume of leads in February and March, both months drove much higher ROAS potential than in January.
In short, February and March drove lower volumes of sold and closed revenue than January, but the revenue driven was less expensive to the businesses in this sample.
As a reminder for when you look at digital marketing performance: Leads/conversions are only part of the story.
It’s also worth noting that 39% of total revenue opportunity was in the open estimate category, meaning more than half (61%) of total revenue opportunity ended up sold or closed.
This is an important metric because, with other paid channels, we usually see more than 50% of that revenue get ‘stuck’ in unsold estimates.
In March, a much higher volume than normal of revenue opportunity made it to sold and closed revenue, which is reflected below when looking at the return on ad spend closed.
Google LSAs Drove an 8.5x Return on Ad Spend (Closed Revenue) in March
In January, every $1 spent on GLSA generated $3.46 in return.
In February, that increased 87%, with $6.50 in closed revenue generated per every $1 spent, with 86% of closed revenue coming from new customers.
And now in March, every $1 spent drove $8.50 in closed revenue with 95% of that closed revenue coming from new customers.
This shapes up to be a positive trend for Q1 GLSA performance:
Despite a lower revenue volume, March closed ROAS was 145% higher than in January 2024.
It Cost $245.50 to Acquire a Paying Customer from Google LSAs in March
The cost to acquire a paying customer came down 10% in March, from $273.89.
In Q1, much like 2023, customer acquisition costs from GLSA have come down 39%:
To summarize: GLSAs have gotten less expensive and more efficient in Q1, but the overall volume of revenue generated is still down from January.
Savvy digital marketers will be able to spot these trends and adapt by making up the volume through other channels and monitoring how that volume expands / contracts based on seasonality. It will be fun to see if volume picks back up for GLSA during the late spring and summer season.
Until next time . . .
-Jon