HVAC Leads – When It Comes To In-Bound Email Leads, Time Is Definitely Of The Essence
Industry Study Reveals 36% of Leads Are Never Contacted
by Michael Haines, Founder of ACDirect.com
If you think this never happens in your HVAC business, you might want to think again…
Recently I wrote an article titled How To Design HVAC Landing Pages That Deliver Customers. This article outlines the 7 most important elements your website pages must possess to convert shoppers into actual leads.
The trick, I stated, was creating enough interest to get your shoppers to actually call or email your company.
Assuming you’ve taken these steps (or even if you haven’t), now what? You have an email from a potential prospect asking for more information. (We’ll discuss proper call handling in an upcoming article).
And, for the purposes of this discussion let’s confine inbound email leads to mean replacement system leads for now.
Let’s face it…
We live in the new “digital age” whether we like it or not. Our customers can now contact 3-5 HVAC contractors in minutes simply by going online. Our industry has always focused on closing rates, average sale revenue, accessory add-ons, etc.
But I have never, in my 25 years in the HVAC marketing industry, heard a single discussion concerning the proper handling of inbound email sales leads.
It turns out that, according to a comprehensive study conducted by Dr. James Oldroyd, Original Researcher on a 2007 Lead Response Management Study, that the response time to these email leads is more critical than most of us have ever imagined.
“Since my groundbreaking study first published in 2007,” said Oldroyd. “I have periodically been monitoring the speed of response of online sales leads. Five years and thousands of leads later, I again partnered with Insidesales.com to assess the state of the industry.”
“Based on this year’s results”, continued Oldroyd, “I began to wonder how firms were responding to these leads. Digging deeper into the data demonstrated a shocking discovery: while at first glance companies seem to be doing OK at online lead response, separating automated email response from human-directed phone and email response revealed they are actually very poor in rapidly responding to online leads.”
The Great HVAC Marketing/Sales Disconnect: Industry Study Reveals 36% of Email Leads Are Never Contacted
This year’s annual study of lead response behavior was conducted by enlisting and tracking 696 companies. The study authors submitted “test” inquiries via inbound, online lead forms to these 696 companies. The data revealed by studying their response times to these email inquiries uncovered some enlightening facts:
- Only 29% of companies in the survey had attempted first contact within the first four hours.
- Nearly 36% of those audited never responded to a submitted test lead during the entire two-week tracking period.
- Of the 696 audited companies, less than 1% responded to a web-generated lead (auto-email responders were excluded from the study) within the high value, five-minute window.
- The odds of actually making contact with a lead decrease by over 10 times in the first hour
- The odds of actually making contact with a lead if called in 5 minutes versus 30 minutes is 100 times greater
The High-Value, Five Minute Window
According to this study:
“A sales rep is 100x more likely to make contact with a new lead and 21x more likely to progress that lead into the sales pipeline if live contact is attempted within the first five minutes of a lead being submitted.”
The most dramatic finding from the 2007 study had to do with the time it takes to respond to an inbound, marketing generated email sales lead. “The study revealed that the odds of making contact with a new lead are extremely high if you call within the first 5 minutes of submission.”
“The odds drop off dramatically by the first 30 minutes. Specifically, a rep is 100x less likely to make contact if the first call is made 30 minutes after submission. The odds of making contact drop by 3000x if the first call is made 5 hours after lead submission.”
“We call it the ‘wow effect’ as in wow, that was fast! You are impressive.” says the study author, referring to the reaction a person has when contacted so soon after submitting a lead.
So it turns out that we have just 5 minutes if we want to achieve near 100% success in making contact with interested customers. The odds of actually reaching a customer fall by 69% if we wait just 4 hours.
A 30 Minute Response to Email Leads Just Doesn’t Cut it
Personally, I always assumed that a 30 minute average response time to emails was pretty good. Turns out that good enough is, well, not nearly good enough. Let’s assume that you receive 40 email inquiries per month and convert 15 of those into an actual replacement system appointment. We’ll leave out service call inquiries for the time being.
And let’s also assume you close replacement system appointments at a rate of 33% with an average gross margin of 38% on each sale. Your average gross revenue from each sale is $5000.
So here’s how it works out:
15 appointments X 33% closing rate = 5 sales
Each sale is worth $5000 X 5 sales = $25,000 gross revenue
$25,000 gross revenue X 38% gross margin = $9500 gross profit
If we assume you are like most businesses and wait an average of 2 hours to reach out to email inquiries currently, let’s see what can happen if you respond within 5 minutes or less.
40 email inquiries responded to in 5 minutes or less
We double our actual contact percentage and now set 30 appointments instead of 15
30 appointments X 33% closing rate = 10 sales
Each sale is worth $5000 X 10 sales = $50,000 gross revenue
$50,000 gross revenue X 38% gross margin = $19,000 gross profit
As you can see, you’ve just doubled your revenue and gross profit. And, you’ve spent nothing additional on marketing or infrastructure. You’ve simply responded more quickly than your competitors. If you’re like most HVAC contractors, exhaustively hunting down more incoming leads has always been the primary focus of your HVAC marketing efforts.
Responding More Quickly to Your Existing Email Leads Can Provide the Single Highest ROI of any of Your Marketing Efforts.
Let’s say I’m sitting at my desk when an inbound email arrives. I notice it in the inbox, pick up the phone and call the customer right at that very moment. Often this response time is measured in seconds, not minutes. Usually, the customer is right at the phone and would often seem a little surprised at the super-fast reply.
It was fun to start the call by apologizing for the delay in responding by saying “I realize it’s been almost 45 seconds since you sent in the email. I’ll make sure that sort of delay doesn’t happen in the future.”
Inevitably, I would get a chuckle from the customer. Some customers would go on to share a story about a really good or really poor customer service they had experienced in the past. This gave me a chance to empathize and let them know that great service seems like it should be common sense but all too often it gets lost in the day-to-day elements of running a service business.
I never bragged about my company (at least at this moment) or maligned my competition. It isn’t necessary. I simply let our actions speak for us. Of course, this sort of positive interaction in the early moments of the customer’s experience with our company always results in exaggerated closing rates on these appointments simply because I created a whole different feel during this all important “getting to know you” phase.
If you set up an initiative within your HVAC organization to reach out to incoming email inquiries within 5 minutes or less, there will be a significant impact on your bottom line.
According to the lead response management research conducted in 2007, These original findings have since been updated and later published in Inc. magazine and Harvard Business Review in 2011, and on Forbes.com in 2012.
P.S. Get your free copy of https://tripleyourclicks.com/secrets-to-hvac-sales-lead-call-handling/ You need to read this eye-opening article before you let one more inbound phone lead slip away.
Prospects that respond to your website by calling in are serious buyers but rarely get treated that way. This article provides the solution…
Question: Would your customers respond better using this method rather than your typical approach? What else works well for you? Share your comments now
This article is written by Michael Haines, the founder of AC Direct, the oldest and most visited HVAC e-commerce site in the country. Michael has generated over $40,000,000 in HVAC revenue using web based marketing from this and other sites, including local service and installation sites.
His websites have generated over 17,000,000 visitors and were featured in the INC 5000 list of fastest growing companies in America, 2 years in a row.
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407-459-8804 or email info@TripleYourClicks.com