HVAC Organic Demand Trends - October 2024
NEW DATA SET + Service Nation Members: Welcome!
Welcome Service Nation Members!
👋 Hey, Jon here! This week, we are exploring October’s Organic revenue performance with a new and much larger data set. The organic channels in this sample include Google and Bing Organic Listings, Google Business Profile, Organic Facebook, Yelp Organic, DuckDuckGo, and YouTube Organic.
I want to give a BIG THANK YOU to Josh Crouch at Relentless Digital, who let us use his data for over a year to share benchmarks with you. Not many companies would be so transparent and willing to share data with thousands of readers to help improve their businesses. Now that we have a bigger sample, the data from these accounts comes from multiple agencies across even more locations in the US, with different spend levels, branding investment, etc.
Before we get into the October data, I’ll summarize September’s data from the larger business sample to reset our comparisons.
For every $1 spent on Organic in September, $46.70 in closed revenue was generated across new and existing customers, and $20.70 from new customers only (using total spend as the cost basis).
Below are the YoY trends comparing September 2024 to September 2023:
Unique Lead Volume: +12% YoY
Average Ticket: +8% YoY ($3,178)
Sold Revenue: +28% YoY
Customer Acquisition Cost: $55.95 (-8% YoY)
Closed Revenue New Customers: +15% YoY (20.7x return on investment)
Closed Revenue Total Customers: +21% YoY (46.70x return on investment)
Note that organic spend (based on SEO management fee) increased by 3% year-over-year in September and October.
Let’s dive into our new sample data for October 2024!
Organic Unique Lead Volume Increased by 20% Year-over-Year
With just a 3% increase in spend on SEO management, lead volume across new and existing customers grew 20% year over year.
Booked customers also increased (+18%), with a booking rate of 49%.
The rest of the downstream effects of increased lead volume also improved with a 10% YoY increase in run jobs and a 20% YoY increase in paying customers.
The match/run job rate was 46%, and the paying customer rate was 24%.
New Customer Only:
Looking at just new customers, unique lead volume increased 13%, with a 13% increase in booked customers, a 9% increase in run jobs, and a 14% increase in paying customers.
50% of new customer leads converted via the Google Business Profile*, generating 45% of new customer revenue.
Google organic listings generated the second-most leads, accounting for 27% of new customer leads and 28% of new customer revenue.
*38% of the total closed revenue generated by the Google Business Profile came from new customers. 52% of the total closed revenue generated by Google Organic came from new customers.
It Cost $47.71 to Acquire a Paying Customer From Organic Channels in October, Down 14% Year-over-Year
More paying customers from organic channels usually means a decrease in customer acquisition costs, so despite the increased spend on SEO management, costs came down year over year because of the increases in lead volume, booked customers, run jobs, and paying customers.
It cost $141 to acquire a new customer from organic channels (total spend divided by the number of new paying customers) but those customers spent more on average ($3,818 from new vs. $2,560 vs. existing).
Rising CACs aren’t always bad, especially if your efficiency metrics hold strong and customers spend more on average, but it’s critical to monitor these metrics together to make sure you aren’t overspending for what you’re getting in return.
Average Tickets Increased by 1% Year-over-Year
Across new and existing customers converted by organic channels, average tickets increased just 1% year-over-year to $2,981.
As I wrote above, new customers spent more money ($3,818) than existing customers ($2,560), but there wasn’t much change year over year for either group.
Conversion Tool Average Ticket Performance:
I am always curious if customers who convert differently (for example, filling out a form rather than calling the business) spend differently, and the data for this was pretty interesting.
The highest average tickets were generated from . . .
Chat tools.
Chat tool conversion volume was much lower than phone calls and forms, but Schedule Engine chat-converted customers spent an average of $8,200, and Zyratalk chat-converted customers spent nearly $6,000.
Regarding volume and average tickets, organic leads converted via forms had the highest average tickets, with $4,900 across more than 4,200 conversions.
Organic Channel Average Ticket Performance:
Yelp Organic and Duckduckgo drove the highest average tickets of organic channels, although they generated the lowest unique lead volume.
Sold Revenue from Organic Leads Increased 18% Year-over-Year
Across new and existing customers, sold revenue was up 18% in October 2024 compared to October 2023. This indicates that November ‘24 will start stronger than the prior year.
Revenue potential was also up 16% year over year ($498,323 per business in this sample), and 54% of that total revenue opportunity generated by Organic channels converted to sold/closed revenue.
For new customers only, sold revenue was up 4% year over year, and total revenue opportunity was up 14% year over year ($259,459 per business in this sample).
46% of the total revenue opportunity from new customers converted to sold/closed revenue, lower than the average across all customers but expected because new customers are likely shopping around a bit more and aren’t quite brand loyal* just yet.
*Regarding loyalty and branding, we recently partnered with Dan Antonelli to dig into before/afters of businesses who have worked with him to overhaul their brand. This is very anecdotal at this stage, but here’s a peak at early numbers of organic performance comparing two months before rebrand and two months post rebrand:
Closed revenue from new customers up 37%
Unique leads from new customer up 54%
Paying customer rate new customer up 7% (67%!)
Cost per new paying customer down 28%
77% revenue from new customer
This is data we’ll monitor and share more with you, but investing in brand has shown an impact on new customer lead and revenue generation during the early stages of our research.
Closed Revenue from Organic Leads Increased by 22% Year-over-Year
Across new and existing customers, closed revenue increased 22% year-over-year.
In October 2024, organic channels generated $222,924 in closed revenue per business in this sample across new and existing customers and $95,551 in closed revenue from new customers only per business.
Looking at new customers only, Organic channels drove a 22x return on investment in October.
Across new and existing customers, the total ROI was 51.3x (+18% year-over-year).
The October ‘24 data across the board is very positive—almost everything is trending up from last year, and sold data indicates a good start to November.
Until next time . . .
-Jon