HVAC Organic Demand Trends - May 2024
👋 Hey, Jon here! This week we are diving into Organic revenue performance for May. 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 May, I’ll give a recap of April’s organic performance, which showed a big jump in total revenue closed as well as closed revenue ROAS, despite only a slight increase in lead volume (+1% MoM).
For every $1 spent on Organic in April, $29 in closed revenue was generated, up $7 from March:
Conversions: +1%
Average Ticket: +19%
Sold Revenue: -15%
Customer Acquisition Cost: $84.41
Closed Revenue: +42% (29x 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) decreased by 1% month-over-month.
Organic Lead Volume Increased by 21% Month-Over-Month
From December to January, Organic lead volume increased by 32%.
But lead volume dropped by almost as much from January to February at 31%.
Lead volume increased 7% from February to March, and again from March to April, but only by 1%.
And now, from April to May, we finally see a bigger bump with a 21% increase in lead volume.
The book rate and paying customer rates also went up (3% for both), meaning more active customers in May became booked jobs and paying customers.
86% of revenue opportunities were converted via phone calls, and forms converted the remaining 14%.
So for organic, the vast majority leads coming in are calling the business, which makes sense given that 88% of revenue opportunity came from Google Business Profiles.
Diving Deeper into Google Organic Listings on the Heels of SGE
Given that Google launched search with generative AI on May 14th, I wanted highlight Google Organic Listings performance for May 15th - May 31st compared to the first two weeks of the month:
Conversion volume increased 21% from the prior two weeks
Booked Customers increased 26% from the prior two weeks
Paying Customers increased 13% from the prior two weeks
Closed Revenue increased 30% from the prior two weeks
It’s far too early to tell the impacts of SGE on Google Organic listings performance, especially because of the season we’re in, but this is something we will report monthly to see if and how listings performance changes in light of the new generative AI search results from Google.
It Cost $81.27 to Acquire a Paying Customer From Organic Channels in May
It cost about $3 less to acquire a paying customer from organic in May than it did in April, and customer acquisition costs have been on a steady decline since its peak in February.
I’d expect CAC to drop even lower in June (and possibly July) before it begins to increase again.
Average Tickets Increased by 8% From The Prior Period
Average tickets increased again this month to $2,858, up $658 from March.
This is expected in the summer months, with more install/replacements at higher average tickets, but it’s still nice to see tickets rise for two straight months.
Sold Revenue from Organic Leads Increased 65% from the Prior Period
In April, sold revenue was down 15% month-over-month, leaving a smaller pipeline to begin May.
However, sold revenue bounced back strong in May, with a 65% increase, boding well for a strong start to June.
It’s also worth noting that 61% of revenue opportunity converted to sold or closed revenue in May, up substantially from just 49% in April.
Closed Revenue from Organic Leads Increased by 27% from the Prior Period
Total revenue opportunities from organic channels increased 3% from April to May and closed revenue increased 27% in that same period.
For every $1 spent on organic channels, $57.80 of revenue opportunity and $30.40 in closed revenue were generated.
The Q2 growth continues, but it will be interesting to see if and how Google’s new generative AI search impacts lead volume and revenue generated.
Until next time . . .
-Jon