HVAC Organic Demand Trends - January 2024

👋 Hey, Jon here! This week is our first look at 2024 data! We’ll be diving into organic revenue performance for the first 29 days of January from conversion to revenue.

Before we get into the data for January, I’ll give a recap of December’s organic performance, which showed a large decline in conversions and sold revenue. However, despite less demand, organic still generated $21 in return for every $1 spent on SEO management fees:

• Conversions: -26%

• Average Ticket: -15%

• Sold Revenue: -52%

• Customer Acquisition Cost: $97.79

• Closed Revenue: -8% (21x return on investment)

As usual, shout out to Josh Crouch and his team at Relentless Digital, who partnered with us to measure lead-to-revenue from their organic and LSA management services, enabling us to share these trends with you.

Organic Conversion Volume Increased by 32% Month-Over-Month

It’s a relief to see conversion volume bounce back in such a strong fashion after the sharp decline in December.

Considering that conversions were down 26% in December, a 32% increase might not feel like a huge turnaround compared to November, but it is a net positive of 6% since that period and a really good start for the first month of 2024.

However, the match rate (25%) and paying customer rate (16%) both came down by 8% from the prior period.

That means a smaller percentage of those conversions turned into opportunities and more revenue than in December.

This is largely expected, though, because a trend we typically see is that when conversion volume jumps by double-digits, match rates and paying customer rates fall due to the new volume of demand overwhelming lead handling, scheduling and follow-up.

Regardless, the 32% jump in conversions is a big positive for January, but let’s continue down the funnel to look at how those new conversions affected revenue generation.

It Cost $80.09 to Acquire a Paying Customer From Organic Channels in January

Surprisingly, organic customer acquisition costs came down by over $17 from December!

In January ‘23, customer acquisition costs from organic were at their highest, so it’s nice to see a boost in conversions and a customer acquisition cost as low as it’s been since the summer months of 2023:

This is a really good sign for performance so far in January and hopefully sets the tone for 2024 as a whole :)

Average Tickets Increased by 10% From The Prior Period

If reduced customer acquisition costs weren’t beneficial enough so far in this analysis, average tickets also increased by 10% to just over $2,600, so the revenue per paying customer went up as well.

Because of the way December ended with a 52% decrease in sold revenue, I was concerned about how January would perform given a smaller pipeline to start the month.

But so far, January organic is performing extremely well on all fronts.

Sold Revenue from Organic Leads Increased 136% from the Prior Period

Last month, sold revenue was down 52%.

This month, it is up 136%.

Total revenue opportunity (estimates, sold jobs, closed jobs) was up 23% from the prior period and over half (52%) of that revenue opportunity converted to sold or closed jobs.

The increased conversion volume, higher average tickets, and ability to turn those leads into paying customers helped a lot here, but this also bodes well for a strong February with a much larger pipeline to start the month than in January.

Closed Revenue from Organic Leads Increased by 16% from the Prior Period to 25x ROI

ROI potential from January organic performance was a 63x (meaning every $1 spent generated $63 in revenue opportunity) and ROI from closed jobs was a 25x.

Compared to last year, this is a really fast start for January and performed nearly as well as 2023’s summer months:

It’s also important to note that 63% of closed revenue via organic came from new customers.

Over the last few months, we’ve seen the majority of revenue generated by organic come from new customers, challenging the narrative that revenue produced by organic channels typically comes from existing customers.

We also saw that 85% of the revenue potential from organic converted via phone calls, and that 75% of closed revenue came from the Google My Business / Google Business Profile.

In summary, this is a really hot start for January. We still have plenty of other marketing channels to look at in the coming weeks, but as I mentioned above, I am hopeful that this sets the tone for the year!

Until next time. . .

-Jon