HVAC Organic Demand Trends - June 2023

👋 Hey, Jon here! This week, we’re diving into SEO / organic revenue data through June 29th as we continue through the peak summer season. Before we dive into that, I’ll give a recap of May organic performance, which trended up strongly compared to April:

• Leads: +26%

• Average Tickets: -7%

• Sold Revenue: +34%

• Closed Revenue: +21%

So far in June, we’re seeing a bit of a different trend. Lead volumes are still up, but closed revenue is down from the prior period. Let’s investigate👇

Organic Lead Volume Increased 7.5% Month-Over-Month

Just like in May, we saw another increase in leads that came in via organic channels.

It’s great to see two straight months of increased volume and even better to see that the match rate (% of those leads that match to a new, sellable, opportunity in the CRM) remained largely the same.

And, about 6% more of those leads turned into paying customers.

Whenever lead volume increases noticeably (over 30% since April) there are usually hiccups with lead handling as it becomes busier, but this was not the case for June.

It Cost $91.39 to Acquire a Paying Customer From Organic Channels

Customer acquisition costs dropped nearly 7% from the prior period, which is another positive for revenue flow efficiency:

There were more leads in June and those leads cost less money to acquire (using SEO management fees as the cost-basis).

This is not surprising to see during the busy season (PPC customer acquisition costs typically hit their lowest points in June) but is a good reference point to compare to your own SEO performance!

Average Tickets Dropped 12% From The Prior Period

So far, the performance data has been looking great. An increase in lead volume, more paying customers (+6%) and a lower cost to acquire those customers.

But like we saw in May, average tickets have come down again.

This time by 12%.

Lower average tickets impact revenue for the obvious reason that even if you get more paying customers, if they are spending less than prior months, it is likely that revenue numbers have gone down.

Let’s take a look.

👇👇

Closed Revenue from Organic Leads Decreased 9.5% from the Prior Period

Revenue potential was down 18% month-over-month and breaks out as follows:

• Estimated Revenue: -29%

• Sold Revenue: +3.3%

• Closed Revenue: -9.5%

Return on investment from SEO is still above a 21x (for every $1 spent, the brands in this sample got over $21 in return) but lower average tickets negated the higher lead volume and increase in paying customers.

It’s worth noting that revenue potential was a 45x, and on average, we typically see half of that turn into closed revenue, which would be a 22.5x return on investment.

While a little below that, 21x is right on the mark for what we’d expect to close out of the total opportunities.

We also saw that 68% of closed revenue came from new customers, but those average tickets were down 13% from the month prior.

To sum up June’s SEO revenue flow performance, lead quality, lead handling and sales processes seem to be performing as expected. Lead volume demand is higher, but customers just aren’t spending as much money, lowering revenue demand.

A 21x return is still phenomenal, but my hope with this data is that it shows you how important it is to go beyond looking at lead volume and booking rates to evaluate performance and make more informed business decisions.