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Alrighty, guys. In this video, we're gonna cover how to look at your marketing numbers, plan ahead for the year in marketing, and have perfect control over your business — to know when you need to put your foot on the gas to get more projects coming in, and when you need to ease up to stabilize and handle the projects you already have.
This marketing discussion is going to be based on lead generation sources. So this includes platforms like Thumbtack, HomeAdvisor, Angi’s List, Networks — all those guys.
This isn’t going to have much to do with branding or SEO, because that’s longer term and harder to track.
However, we’re going to look at how to keep track of the leads you’re getting, how many you’re closing, and just give you an idea of the business numbers you want to pay attention to so you can plan things out.
Alright, let’s dive right into it.
So, on the top column here, you see we have Leads, then we have the Booking Rate. If you get 10 people to reach out through HomeAdvisor, Facebook Ads, YouTube, or wherever you’re advertising, and you book one-third of them, that means your booking rate is 33%. Pretty simple math.
That means, if we had 20 leads, we’re running about 6.6 estimates. If you close a third of those jobs, that means you close about 2 deals. So, 20 leads equals 2 deals. Not too bad.
Let’s say your average ticket is $10,000. Your gross profit after materials and labor is $5,000. Now, we’re going to put that into formulas on the spreadsheet — average revenue per job, gross profit per job, and total gross profit by multiplying the number of jobs closed by profit per job. This way you can see your totals clearly month to month.
Now, let’s add in overhead. Overhead is things like your salary as the owner, rent for your shop, marketing costs like ongoing SEO or social media retainers, office staff, insurance, trucks — basically, everything you have to pay whether jobs are happening or not.
Let’s say your overhead is $15,000 per month. That means just to break even, you need to have at least 3 jobs coming in per month. And since you’re paying for lead generation and other costs, you want to be above break even. You want net profit left over.
If you get 40 leads a month and your booking rate is 33%, that’s 13 estimates. With a 33% closing rate, you close 4 jobs. At $10,000 per job, that’s $40,000 in total revenue. At 50% gross profit, that’s $20,000 gross profit. Subtracting $15,000 in overhead, you’re left with $5,000 net profit.
The game of marketing and growing your business is really simple math: how many leads you’re getting, how many you’re booking, and how many you’re closing. That’s what you have to focus on.
The problem is, most contractors don’t track this stuff. They know they’re getting some leads from HomeAdvisor, some from Facebook, some from referrals — but they’re not actually tracking how many, how many booked, and how many closed. Without tracking, you don’t know what your metrics are, how much to spend on marketing, or which lead sources are producing the best return.
To start tracking, it’s really simple. You can grab a notebook or spreadsheet and write down every single lead: name, email, phone number, address, where you got them from, whether you booked them, whether you sent the estimate, whether you sold the deal, and what the deal size was. This simple tracking can make you thousands, if not millions, of dollars over time.
Once you’ve tracked a few hundred leads across different platforms — HomeAdvisor, Thumbtack, Facebook, Angi’s List, Modernize, Networks, etc. — you’ll see which ones work best in your market. And when you see the booking and closing rates clearly, you gain control. You’ll know where to spend, what to cut back on, and how to hit your goals.
And remember, your internal process matters. If you respond fast, follow up often, and stay on top of communication, you’ll close more leads — regardless of the platform. The magic formula isn’t the platform, it’s tracking your numbers and improving little by little.
Hopefully this helps, and gives you some ideas. If you agree or disagree, drop a comment below. Thanks so much for watching, and I’ll see you in the next video.