Knowing Your Numbers
How are you ensuring the scalability of your roofing and siding and ensuring growth in an ultra-competitive marketplace? It starts with knowing your numbers. The answer is to use essential numbers, called metrics, to measure how well you’re doing. These metrics can make the difference between growing and staying the same. By understanding and improving critical metrics like Cost Per Acquisition (CPA), Cost Per Lead (CPL), Appointment Conversion Rate, Appointment Kept Rate, and Closing Rate, you can take control of your business’s growth and make confident, informed decisions that can significantly impact your business.
This article originates in multiple swings and misses like the others that preceded it. As my brother and I grew our roofing and siding business, so did the complexity of doing business, adding overhead professional services such as accounting and attorneys. Our cost of doing business slowly changed over time, directly impacting on our profitability. The actual numbers made the most difference with the numbers aligned with our sales and marketing efforts, mainly in the controllable variables. Toward the end of year three, beginning in year four, we learned the following metrics and could scale our business. Your most important number is how much you have in the bank. But if you want to put more money in the bank, I will ask you to focus intently on the following metrics. Knowing them, understanding them, and manipulating them to get a better outcome can be the difference between barely making it one more year or being so profitable that you’re trying to decide how big you want to get, demonstrating the potential impact of these metrics on your business’s profitability.
Understanding Costs: CPA and CPL
Are you spending too much to get new customers?
Knowing your Cost Per Acquisition (CPA) is essential because it shows how much it costs to acquire a new customer. This number is crucial for roofing and siding businesses because it shows your marketing effectiveness. By monitoring and improving your CPA, you can ensure you’re not spending too much money and can change your strategy to save money.
Imagine you start a new marketing campaign to attract homeowners in your area. You might get a lot of interest, but you need to track your CPA to know if spending on ads brings in customers. How can you make sure your marketing money is being used wisely?
Are the leads you get worth the money?
The Cost Per Lead (CPL) shows how much it costs to get someone interested in your services. While CPL focuses on the number of leads you get, balancing the cost with the quality of those leads is crucial. For contractors, changing their target audience or improving their ads can lower their CPL without losing lead quality. Are they reaching the proper neighborhoods and using the best methods to maximize their investment?
If your CPL is low, but most of your leads aren’t severe or qualified, you might still be wasting resources. A higher CPL might be okay if the leads are excellent and likely to become paying customers. Are you focusing on the right balance between getting lots of leads and getting good leads?
Improving Conversion: Appointment Metrics
Are you turning leads into appointments effectively?
The Appointment Conversion Rate shows how well your business turns potential leads into actual appointments. This rate tells you how good your lead qualification process is. Improving this number by better nurturing or qualifying leads can make your operations more efficient and increase sales. Are your potential customers interested and qualified, or are you spending too much time on leads that don’t turn into appointments?
Think about the steps a lead takes. Each step needs to be optimized from the moment they show interest to when they schedule an appointment. Are your sales reps good at handling objections and scheduling appointments? Do you have a follow-up system to ensure no lead is forgotten?
Do most of your scheduled appointments happen?
The Appointment Kept Rate shows how many scheduled appointments are attended. A low rate might mean problems with customer engagement or scheduling. For roofing and siding contractors, reminder systems or flexible scheduling options can help improve this rate, ensuring fewer missed appointments and better resource use. Are you making it easy for your prospects to keep their appointments, or do they need them?
Think about missed appointments. Each missed appointment is a lost opportunity and a waste of resources. Are you sending reminders through email, text, or phone calls? Are you offering appointment times that fit your customers’ schedules? Improving your Appointment Kept Rate can lead to more closed deals and better resource use. Do you have client engagement tools like a virtual design center to increase show rates?
Closing the Deal: Improving Closing Rate
How good is your sales process at turning prospects into customers?
The Closing Rate shows how well your sales team turns prospects into paying customers. This metric shows how effective your sales strategies are. You should change your sales training, pricing strategies, or services based on customer feedback. Are your sales pitches connecting with prospects? Is your pricing competitive and profitable? Understanding your Closing Rate can help you find and fix weaknesses in your sales process.
Imagine your team is good at getting appointments but needs help to close deals. What does this say about your sales process? Your sales reps may need more training, or your pricing strategy needs adjustment. Are you getting feedback from lost sales to understand why prospects didn’t convert? Use this data to refine your approach and improve your closing rate.
Integrating and Monitoring for Success
Are you using the right tools to track your performance?
While each metric provides valuable insights, looking at them together can give you a complete picture of your business’s health. Using CRM and analytics tools allows for continuous monitoring and adjusting these metrics. Reviewing these metrics can help you find trends, pinpoint improvement areas, and quickly adapt strategies to take advantage of growth opportunities. Are you regularly reviewing your performance data and adjusting your strategy? With the right tools, you can be optimistic about your business’s growth potential.
Think about the benefits of a system that integrates all your metrics. This allows for real-time tracking and adjustments, helping you stay agile in a competitive market. Are you using technology to its fullest potential to streamline your processes and improve decision-making?
Practical Steps to Use These Metrics
How can you start using these metrics in your daily operations?
- Set Clear Goals: Decide your goals with each metric. Whether you want to lower your CPA or raise your Closing Rate, having clear, measurable goals is crucial.
- Invest in Technology: Use CRM systems and analytics tools to track these metrics in real-time. Make sure your team knows how to use these tools effectively.
- Regular Reviews: Schedule regular meetings to review these metrics. Depending on your business needs, this could be weekly, monthly, or quarterly.
- Adjust Strategies: Based on your review, make necessary adjustments to your marketing, sales, and operational strategies. Be flexible and ready to change when needed.
- Training and Development: Keep training your sales and marketing teams to ensure they have the latest strategies and tools to improve performance.
- Customer Feedback: Regularly gather feedback from your customers to understand their experience and identify areas for improvement.
Case Studies and Examples
What can you learn from other contractors who have successfully used these metrics?
Think about a small roofing company struggling with high CPA and low closing rates. Using a CRM system, they tracked and analyzed their marketing efforts. They found that their best leads came from referrals and local events, not online ads. They shifted their budget to focus more on community engagement and saw their CPA drop significantly while their closing rates improved.
Another siding contractor had a high rate of missed appointments. By using a reminder system that included emails, texts, and phone calls, they cut their missed appointment rate in half. This led to a direct increase in their closing rates because more appointments meant more chances to close deals.
Conclusion
What can you learn from other contractors who have successfully used these metrics?
For roofing and siding contractors, managing key metrics like CPA, CPL, Appointment Conversion Rates, Appointment Kept Rates, and Closing Rates is not just about numbers—it’s about understanding market dynamics, customer behavior, and internal efficiencies to drive sustainable growth. By managing these metrics well, you can gain a significant competitive advantage, ensuring your business survives and thrives in today’s market landscape.
Are you ready to grow your business?
Use these metrics as strategic tools and watch your business reach new heights. Start using these metrics in your business today and see the positive impact they can have. Remember, in the roofing and siding industry, where competition is tough and margins can be thin, every lead, appointment, and customer counts. Make each matter by using these key metrics to drive your business growth. Are you ready to use the power of data to grow your contracting business? The time to act is now; we can help.
Clint Klepp
Marketing Manager
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