One of the most powerful pieces of data a painting contractor should collect and track is the source of his leads. Without this information he is flying blind. He is spending money without the knowledge of its effectiveness or return.
You do not need an elaborate process to track leads. A simple form or spreadsheet will suffice. The important thing is to capture the data. Several pieces of information are important—the source of the lead, whether the job was sold or not, and the sale price.
Marketing is an investment, and like all investments it is prudent to calculate the return on that investment. Tracking our leads is a crucial part of making that calculation.
It takes time to accumulate meaningful data. Small samples can lead to erroneous conclusions. At least six months of data is needed for a reasonable analysis, and preferably a year of data would be used.
The most meaningful analysis is the return on investment. This is calculated by dividing the sales generated by an advertisement by the cost of that ad. For example, an ad costs $100 and generates $1,000 in sales—the return on investment is 10.
For most contracting businesses, a return on investment of 10 to 20 is desirable. Ads that fall below our target should be re-evaluated.
By tracking and analyzing our marketing, we can make wiser decisions. We can make decisions based on the facts rather than hunches.
© BEP Enterprises Incorporated 2008
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