My firm deals mostly with service firms. We help to leverage their website and (to a lesser degree) other internet channels to help with their overall marketing efforts. In short, we try and get them more leads and more sales via the web.
With an e-commerce site the conversion process is rather simple.
1) Traffic comes to the website.
2) They either buy or don’t buy.
With a service company, the site’s purpose is typically to generate inquiries or leads, since services don’t frequently completely sell themselves on a website with no personal human interaction. Thus, the process is:
1) Traffic comes to the website.
2) They either become a lead or they don’t (by contacting the company).
3) They either buy or they don’t.
That’s one more step, and its an important one. I once heard something saying that each time you make a person click a link you’ll lose 50% of your traffic. I think that was more true in the early days of the internet, but probably still holds at least some weight. In the lead-generation model there’s one more step where you’ll lose someone.
While I love to count the leads my clients receive, I realize the quantity of leads is meaningless to them. The quantity of quality leads, however, matters a great deal. It is the same for my business – if I can get 3 sales off of 4 leads that is much preferred to 3 sales off of 20 leads. It saves me time, and as we know – time is money.
Thus, the quest is getting high quality leads – those that are more likely to convert to actual sales. If you run an e-commerce site this is similar to the quest for traffic. Quantity is fine, but what you really covet is the high quality traffic that is more likely to convert.
Anyhow, what got me onto this is a new side-venture I have going, a website that serves to help homeowners find local home improvement professionals in Maryland and Virginia. The general service model for home improvement lead generation sites is to get a lead and sell it to a half-dozen firms. The problem is that these are then low-quality leads, because now at least 5 of your competitors also have the lead. As a best case, the lead-to-sale conversion rate for the group would be 1 in 6, or just under 17%.
Our solution – aka the business model of this new venture – is to match customers one-to-one with contractors. Only sell the lead to one contractor. “But wait Jon, that means you’ll make less money!” Eh, maybe initially. But I believe the users and the contractors will be happier with the service. I’ve learned that happy customers lead to good things.
