HVAC Demand Trends: Google LSA Revenue Performance - November 2024
With December Preview
👋 Hey, Jon here! This week, we’re reviewing Google LSA performance for November with an expanded data set! This data set required a minimum spend of $1,000 / mo on GLSA, so while averages can be helpful, there’s a big range of performance. The lowest closed ROAS in this sample was just 0.2x, versus the highest at 23x. Spend volumes are high, meaning the businesses in this sample experienced high demand from GLSAs - that may not be you or your market, which is why it is so critical to track this data for your business.
As a refresher, below are the performance metrics (YoY) for October 2024 GLSA:
Spend: +47% YoY
Unique Leads: +32% YoY
Cost per Unique Lead: $62.37 (+12% YoY)
Customer Acquisition Cost: $320.47 (+20% YoY)
ROAS Potential: 17.3x
ROAS Closed: 8.5x
Closed Revenue per Business: $109,315 (+46% YoY)
Note that spend on GLSA increased 43% from November 2023 to November 2024 to about ~$15,000 per brand.
Unique Leads from GLSA Increased by 32% Year-over-Year
For the second month of analysis with this new data set, GLSA spend increased substantially year-over-year (+43%), so it is not surprising to see an increase in YoY lead volume.
With increased spend and lead volume, the cost per unique lead increased by 10% from $53.68 in 2024 to:
With tickets down .5% from the prior year to $2,515.63, was the additional spend worth it?
On average, the businesses in this sample spent $4,463 more on GLSA in November 2024 than in November 2023.
That additional spend drove 58 more leads per business on average (from 192 unique leads each in 2023 to 250 unique leads each in 2024. Each lead cost $5 more).
Of the active customers in November 2024, roughly 19% became a paying customer.
Because of that, we can estimate that 11 of those 58 unique leads would convert to a paying customer, and at an average ticket of $2,515.63, drove $27,722 in additional revenue.
That’s a 6.2x ROI for every additional $1 spent vs. 2023, so it’s safe to say the additional spend was worth it.
One thing worth noting is that just 27% of unique leads were from New Customers.
However, those new customers drove 70% of closed revenue (higher average tickets and nearly double the number of paying customers due to a higher paying customer rate). There were also a lot of rollover new customers (customers who submitted leads in October but converted in November).
Unique lead volume only tells a small part of the data story, so let’s dive deeper.
It Cost $290.44 to Acquire a Paying Customer from Google LSAs in November 2024
The cost of acquiring a paying customer from GLSA decreased by $30 month over month but increased by $38.59 year over year.Â
Unlike October, average tickets decreased by $13 on average.
So, average tickets didn’t make up for the cost increase, but additional volume did:
The number of paying customers increased 24% year-over-year, or 10 additional paying customers per business in the sample ($25,156 additional sold/closed revenue per brand).
This matches up nicely with our estimate of the impact of the increase in lead volume (estimated at an +11% increase in paying customers).
Again, the net result of this against the $4,463 in spending was a net positive (5.6x).
Before we move on to ROAS potential and Closed ROAS, just note that LSA message conversions gained month-over-month momentum, taking 1% more of the total conversions versus October:
85% of GLSA conversions came from phone calls
14% of GLSA conversions came from messages
1% of GLSA conversions came from online bookings
Last year, just 10% of GLSA conversions came from messages.
As you look for improvement areas, ensure you have some LSA message response strategy.
1% doesn’t seem like a lot, but in this sample, it was 200 conversions!
Google LSAs Drove a 17.4x Return on Ad Spend Potential in November
For every $1 spent on GLSA in November ‘24, $17.40 of revenue opportunity was generated.
The opportunity comprises estimates, sold jobs, and closed jobs of leads that originated from GLSA (note that we only take one estimate per customer, and a customer can exist in just one of those buckets at a given time period to avoid double counting).
To make this more tangible, across this larger sample of businesses, $257,283 in revenue opportunity was generated from GLSA per business in November, a 36% increase from the year before:
On average, the business in this sample had $70,000 more in revenue opportunity this year than last, from spending $4,463 more this year (15.68x ROI potential on that additional spend).
Google LSAs Drove a 7.0x Return on Ad Spend (Closed Revenue) in November
For every $1 spent, GLSAs drove $7.00 in closed revenue.
That equated to $103,705 (+21% YoY) in closed revenue per business for October converted by GLSA:
Of this total closed from GLSAs, 70% was from new customers.
Compared to last year, the $4,463 in additional spend per business generated an average of $18,071 in net new closed revenue, amounting to a 4x return on ad spend closed revenue.
That 4x return is likely break-even for a lot of these businesses (if they operate at 25% EBITDA, a 4x is required to break even on ad spend), but sold revenue was up 36% year-over-year and 8.5% month-over-month.
This points to a stronger December, so let’s take a look at our new preview section below 👇
December 2024 GLSA Preview
We now have 18 days of data for December, so let’s peak at a few trends for GLSAs so far this month (compared to the prior 18-day period):
Spend: +18% MoM
Unique Leads: +18% MoM
Cost per Unique Lead: $58.73 (-0.3% MoM)
Customer Acquisition Cost: $270.66 (-5% MoM)
ROAS Potential: 16.5x (-9%)
ROAS Closed: 7.8x (+14%)
Closed Revenue per Business: $87,359 (+36% YoY)
I’ll add that booked customers are also up 19% MoM, and paying customers are up 25%.
Year-over-year, closed revenue is up 81%, while spend is up 118%.
For the businesses in this sample, the momentum from GLSAs continues to grow with more and more demand from the channel.
The holidays could slow down December trends, but so far, the month seems to be outperforming November.
Until next time . . .
-Jon