HVAC Organic Demand Trends - July 2023
👋 Hey, Jon here! This week, we’re diving into SEO / organic revenue data through July 25th as we continue through the peak summer season to if and how demand has changed in July.
Before we dive into that, I’ll give a recap of June's organic performance, which saw some mixed results with closed revenue declining month-over-month:
Leads: +7.5%
Average Tickets: -12%
Sold Revenue: +3.3%
Customer Acquisition Cost: $91.39
Closed Revenue: -9.5%
ROI: 21x ($21 earned for every $1 spent)
Organic Lead Volume Increased 12% Month-Over-Month
For the second straight month, lead volume from organic channels increased, and those leads matched at the same percentage they did in May.
However, both the match rate and paying customer rates dropped month-over-month (by 4% and 6%, respectively).
We’ve seen this just about every month since April: when lead volume increases, a lower percentage of them turn into new sellable opportunities and paid customers.
It’s not necessarily a bad thing - inevitably lead handling will slip with a higher volume, but you’ll want to track this to make sure that you’re matched customers and paying customers are staying the same or increasing.
It Cost $71.89 to Acquire a Paying Customer From Organic Channels
Customer acquisition costs from organic channels dropped 21% month-over-month ($20 less expensive per paying customer).
Usually, customer acquisition costs bottom in June, but for organic, this was not the case!
Note: SEO and website management fees are used as the cost basis for establishing customer acquisition costs.
Average Tickets Increased by 6% From The Prior Period
Not only did it cost less to acquire paying customers from organic channels, but those paying customers also spend more money on average than the prior month!
Average tickets have been a bit up and down this year, and can significantly impact revenue generated regardless of lead volume, so it’s great to see the slight uptick here.
Sold Revenue from Organic Leads Increased 34.8% from the Prior Period
With more leads, a lower CAC, and higher average tickets, it is not surprising to see that sold revenue increased by nearly 35% from the prior month.
Match rate and paying customer rates were down, which did impact total revenue opportunity (-9% from the prior month), but less revenue was stuck in unsold estimates.
This increase could mean one of two things so close to the end of the month:
(1) Most of this work will be completed by EOM, furthering an already strong ROAS
(2) Most of this work is scheduled to be completed in August, making for a good pipeline and a sign of a strong finish to summer
Sold revenue is the pipeline and capacity will determine how much is closed this month, so while it doesn’t directly impact ROI in this data set, it will be EOM or in August.
Closed Revenue from Organic Leads Decreased by 4.8% from the Prior Period, But ROI Increased by 23%
Interestingly enough, closed revenue from organic channels dropped nearly 5% despite some positive KPI trends described above.
However, as I just wrote about, a lot of revenue is in the sold phase of the revenue flow cycle, so we expect those dollars to hit the books either this month or in August.
The good news, though, is that return on investment increased 23%, going from a 21x ROI to a 26x ROI.
That’s a $26 return for every $1 spent.
Organic continues to be a foundational marketing channel with some of the lowest customer acquisition costs, but these returns aren’t automatic.
Search engines are nuanced and require experienced teams to manage those channels and your website to give your business the best chance at acquiring the lowest-hanging fruit.
PS - there’s more than just Google and Bing. DuckDuckGo brought in over $6,000 in revenue opportunity and Facebook organic drove over $15,000 in revenue opportunity. While that is a fraction of a percent of the total revenue brought in from this sample of businesses, it goes to show there’s a wide breadth of organic sources that your customers can find your business.
Until next time...
-Jon