HVAC Organic Demand Trends - March 2024
👋 Hey, Jon here! This week we are diving into Organic revenue performance for March. The organic channels in this sample include Google and Bing Organic Listings, Google Business Profile, Organic Facebook, and DuckDuckGo.
Before we get into the data for March, I’ll give a recap of February’s organic performance, which showed a pullback after a strong January. Unique leads declined slightly while customer acquisition costs increased, and closed revenue came in 18% less than in February.
However, in a down month, the return on investment was still $19 for every $1 spent:
Conversions: -31%
Average Ticket: +4%
Sold Revenue: -60%
Customer Acquisition Cost: $122.27
Closed Revenue: -18% (19x 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.
Note that organic spend (based on SEO management fee) declined by 5% month-over-month.
Organic Conversion Volume Increased by 7% Month-Over-Month
Q1 has been a bit of a roller coaster for Organic conversions.
From December to January, conversion volume increased 32%.
But those came right back down, dropping 31% from January to February.
And now, conversions have increased again, although more slightly by 7% from February to March.
28% of unique leads in the month matched to a net new opportunity, and 17% of unique leads turned into a paying customer.
Both the match rate and paying customer rate dropped 8% month-over-month.
However, despite the 7% increase in total conversions, the overall Q1 trend is a decrease in unique leads:
From January to March, the number of unique leads decreased by 11%.
It Cost $85.34 to Acquire a Paying Customer From Organic Channels in March
Despite the downtrend of unique leads and lower match and paying customer rates, the customer acquisition cost from organic decreased by 30% from February to March.
In Q1, we saw an overall decrease in how much it cost to acquire a paying customer from organic by 11%:
February was a bit of an anomaly, but we are now seeing customer acquisition costs lower than what they were in 2023:
When overall demand is down (which we’re seeing across the board) efficiency matters that much more and this is a positive from organic in March.
Average Tickets Decreased by 17% From The Prior Period
In February, average tickets increased by 4% to just over $2,700 with 72% of closed revenue coming from new customers.
However, average tickets have come down in March by 17%, to ~$2,200, with 55% of closed revenue coming from new customers.
Overall, from January to March, average tickets have come down by 8%:
It is expected to see lower average tickets during the shoulder season, with fewer replacement opportunities. I would expect to see this increase in April, which will positively impact ROI numbers, but something we will closely monitor.
Sold Revenue from Organic Leads Increased 16% from the Prior Period
A big positive of March so far is that sold revenue from organic leads increased 16% month-over-month.
This is sold work not yet completed and collected, so April will start with a strong pipeline.
I will note that 56% of the total revenue potential (which was down 14% from the prior month) was in ‘unsold estimates’.
I’ve noticed this more in Q1 so far, but within your business, we recommend you aim to sell at least 50% of your revenue potential.
If the amount of revenue in unsold estimates is more than half of your total revenue opportunity, it’s worth looking at your follow-up process. Even if you think it is dialed in, it’s more than likely you’ll find opportunities for optimization.
Closed Revenue from Organic Leads Decreased by 25% from the Prior Period
For every $1 spent on SEO management fees, $22 of closed revenue was generated in return in March.
Yes, that was a decrease of 25% from the prior period, but getting $22 in return for every $1 spent is profitable.
However, from January to March, return on investment (from closed revenue only) dropped by 29%:
As a final note, I’ll leave you with three more stats to provide insight into organic performance:
75% of closed revenue came from Google My Business (down from 81% the prior month)
21% of closed revenue came from Google Organic listings (up from 19% the prior month)
18% of revenue opportunity converted via form, chat, and online scheduling (down from 22% the prior month)
Until next time . . .
-Jon