HVAC Organic Demand Trends - May 2023
May 1st through May 22nd
👋 Hey, Jon here. This week, we’re diving into SEO / organic revenue data from May 1st through May 22nd (my bday!). A few weeks ago, I wrote about how an increased amount of sold revenue in April would lead to strong performance in May, and that’s exactly what we are seeing.
This is a sample of over 5,400 organic leads (shout out to Josh Crouch and his team at Relentless Digital, who partnered with us to measure lead to revenue from their SEO management efforts) across 30+ locations.
I’ll do a part 2 of this at the conclusion of May for a full month of data.
Let’s dive in!
HVAC Organic Lead Volume Increased 26% Month-Over-Month
Last month, lead volumes were up 14%, this month (so far) they are up 26%.
This is a welcome change from the cold weather months when we saw leads consistently drop.
The astute readers of this newsletter know that lead volume isn’t everything. It still matters significantly how well those leads turn into paid customers, and I am happy to share that paid customer rate increased 8.5% from the prior period!
This translated to a 32% increase in paid customers from the prior period.
This is exactly the type of holistic performance we hope to see - more leads and a higher percentage of those leads turning into revenue.
It Cost $95.06 to Acquire a Paying Customer From Organic Channels
Customer acquisition cost from organic channels (Google My Business, Google Organic, Bing Organic, Facebook Organic, DuckDuckGo Organic and Yahoo Organic) dropped ~19% from the prior period!
So not only did we see more leads and higher paid customer rates, the cost to acquire those customers also decreased.
Note: While organic channels are free, we use SEO management fees as our cost-basis to calculate these metrics.
When the lead handling and follow-up engines are firing at all cylinders, increased lead volumes can have a dramatic positive impact on ROI for a trades business.
This May performance data is such a great example of that in action, whereas last month, some leads slipped through the cracks and closed revenue was down despite a higher lead volume.
Average Tickets Dropped 7% From The Prior Period
Last month, tickets dropped 40% from the prior month - customers who came from organic channels were spending much less money.
While not as dramatic, this month saw a 7% decrease in average ticket to $2,708.81 spent per customer.
Despite a lower average ticket, sold and closed revenue from organic both noticeably increased due to the increased number of leads and lead to paid customer rates.
Important Nugget: I noticed that organic leads that converted via forms had an average ticket of $8,900! I can’t stress the importance of quick and comprehensive form lead follow-up enough. Form submissions leads are often misplaced, forgotten about or not followed-up on. If you want to maximize revenue opportunity, make sure you look at this process closely. The paid customer rates of organic leads that converted via forms was ~17%.
Closed Revenue from Organic Leads Increased 21% from the Prior Period
In the first three weeks of May, closed revenue is up 21% from the prior period.
Not only that, but sold revenue also increased 34%!
I’d expect to see more sold status customers move to closed status as we wrap up the final 8 days of the month, possibly increasing May ROI even more.
Lead volumes are up 26%, and closed revenue is up 21%, which is almost in lock-step.
I’ll jump for joy if the closed revenue percentage increase can match or come close to the lead percentage increase (despite lower average tickets) because it is a great KPI to evaluate both the quality of leads and how well they turn into revenue.
Overall, the higher lead volumes are a welcome sight as we enter the summer months. Even better is that businesses seem to be handling the increased lead volume much better than the prior month, and the net increases of closed revenue are in the double-digits.
This is a positive sign as we enter the summer busy season.
Until next time . . .
-Jon