HVAC SEO Demand Trends - April 2023 - Full Month

👋 Hey, Jon here. This week we are taking a look at SEO / organic HVAC demand trends for the full month of April. The last time I did an SEO analysis, it was through the first 12 days of April and revealed key insights about analyzing partial month performance. Demand seems to be back on the up-swing with more lead volume, but we really want to understand how well those leads progress to opportunities and ultimately revenue.

With that, let’s dive in!

HVAC SEO Lead Volume Increased 14% Month-Over-Month

Just like paid ads, we saw an up-tick in leads from organic channels with a pretty noticeable increase of 14%.

In the first 12 days of the month, lead volume was actually down 9% (from the prior 12-day period) but we attributed that to having two weekends in that period versus 1 in the prior period.

This turned out to be an accurate assessment, because as the month played out, lead volume caught up and overtook what came in the month prior.

This is a note for both agencies and contractors: If you are looking at partial-month performance, it can lead to false-positives or false-negatives, so when reviewing data like this, always go back and make sure you look at the full-month’s performance.

It Cost $102.50 to Acquire a Paying Customer From Organic Channels

Our cost-basis for organic are management fees to help us quantify a customer acquisition cost on otherwise “free” channels.

Despite higher lead volume, customer acquisition costs actually increased by 12% despite the management fees not changing.

When that happens, it is a clear signal that fewer leads are turning into paying customers than the prior period, and there’s likely an operational issue versus an organic strategy issue.

Match rate and paid customer rate confirm this 👇

Match Rate Dropped 20% and Paid Customer Rate Dropped 16% Month-over-Month

In April, we saw 14% more leads from organic than the prior month, but 9% fewer paid customers.

So, what happened?

20% fewer of those leads matched to a sellable opportunity in the CRM. The match rate of organic leads that converted via phone calls and form leads both dropped by about 18%.

We also saw fewer of those leads turn into paid customers (-16%).

Typically, whenever I see paid customer rate drop, I go right to unsold estimates to see if follow-up is the culprit (it usually is). But estimated revenue was down from the prior month so I rule that out.

However, when I filter by lead-only customers to look at what they submitted via form, chat, or the summary of the phone calls, I do see a lot of missed opportunity (the below are inquiries weren’t booked):

It’s very possible the influx of leads may be existing customers checking on appointments, etc. but within 30 seconds of going into customer details, I saw six opportunities likely lost because of response times or phone system issues.

This is nit-picky - even strong opportunities won’t always book or close.

However, for those looking to get 1% better every month, or figure out why lead volume went up and closed revenue went down, there are detailed avenues to explore that can help tighten processes and lose fewer opportunities as they come in.

Average Tickets Dropped 40% Month-Over-Month

Leads were up.

Fewer of them turned into paying customers.

And, average tickets were also down a whopping 40%.

There’s usually not a singular reason why closed revenue goes down (or up) month-over-month and/or year-over-year.

And sometimes, those reasons are out of your control.

Organic still brought in an 84x revenue potential, and a 32x ROI (closed revenue) but that’s noticeably lower than the prior month.

Average tickets had been rising in 2023 (masking a lot of the reduced demand) but in this month, they dropped significantly, which contributed to lower closed revenue.

Closed Revenue ROI Was 32.3x, But Decreased 49% Month-Over-Month

The grand finale, return on investment:

For every $1 spent on SEO management, it returned $32.35, which is hard to be upset with.

The prior month, though, was nearly double that!

Seasonality is a factor, but analyzing multiple data points to diagnose a problem (if there is one) is more effective than looking at the end output and deciding if it worked or it didn’t.

While the goal is to improve, each area of improvement (strategy, customer experience, lead management, follow-up, sales process) requires time, energy and effort, so tackling them all at once usually isn’t feasible.

Breaking this down into revenue flow Lead —> Matched —> Paid Customer —> Average Tickets —> Closed Revenue helps identify where the improvement energy should be spent.

Lead handling is likely the focus here, and has already improved in the first few days of May leading to closed revenue that is already at 40% of what was closed in April (!).

Until next time . . .

-Jon