White Paper Brief: Lead Generation Is a Viable Revenue Enhancer for General Maintenance and Repair Businesses
The average house may need a 50% replacement over a period of 30 years. In each of the first 10 years of a house's existence, it will require 1% of it's cost in repairs. That would be $750 a year for a house that cost $100,000. That percentage rises to 3% in years 20 to 30.1 Where does all this money go? You know the answer.
Oftentimes, it goes to handymen or general maintenance workers. Over the past five years, the number of general maintenance franchises in the US has increased by 2.8%. It is expected to continue to grow.2 This means self-employed handymen will face competition from larger businesses and will also face the choice of whether to remain self-employed or to join a franchise.
This white paper is meant primarily for franchises employing large groups of workers. However, small businesses may certainly benefit from lead generation. We will discuss potential lead buyers later.
Potential Roadblocks to Consider
There is not much in the way of this particular industry. The housing market is accelerating, a large section of the housing market is aging and will require costlier repairs, and demand for energy efficiency has generated orders for solar panels and other "green" additions to homes.2 The big picture looks really good.
Potentially, lack of cash on hand could make lead generation economically unfeasible. However, even with low margins, greater sales means a chance for greater total profits. It's important for maintenance and repair businesses to seize market share while the shift to franchises is happening. Setting cash aside for marketing expenses is recommendable at this time.
Another potentially complicating aspect of the market is it's participation in "the sharing economy." By this we mean the tendency for maintenance clients to find a handyman on a directory website or app. Much like Uber has transformed transportation, websites like Angie's List and Field Nation have transformed the maintenance service industry. Still, there is a sizeable portion of the population that doesn't use directories to find service providers and there is always the option to supplement directory membership with lead generation.
2014 census data show that approximately two thirds of US residents own rather than rent. Of the owners, the majority have a household income of $50,000 or more, with few households earning $25,000 or less. 11% of home owners were below 35 years of age while just over 45% were between 45 and 64.4 Of course, the elderly population will continue to grow as baby boomers grow older. It's unclear what effect that change will have on the maintenance and repair industry.
In a similar industry, the remodeling industry, many homeowners postponed or cancelled renovations after the housing market crash of 2008.3 However, remodeling is not repairing or renovating. Maintenance and repair is more immune to recession than remodeling. Therefore, we expect continued growth in all demographics, even if the economy doesn't pick up as well as we'd like.
Lead Generation: Introducing Your Target Market to Your Maintenance and Repair Services via Search Queries
As the handyman market matures, leaders in the industry must look for ways to optimize sales and gain market share. One such way is by generating leads using targeted pay-per-click (PPC) advertising. Essentially, when consumers in your market search for services you offer and then provide their information, they become leads under this method.
Their information is gathered when they opt to fill out a form linked to from a number of landing pages. The process has been effective for countless businesses in countless industries, generating thousands, or even more, qualified leads for each one.
Handyman or general maintenance service providers may find the following information useful when weighing PPC lead gen against other options as supplements to their current marketing initiatives.
PPC Keyword Analysis
We've researched the top keywords used in the generation of leads for the maintenance and repair industry and found a definite opportunity for businesses and individuals to increase profits.
Based on Google data, competitor data and industry averages, the average cost per click (CPC) for the top general maintenance and repair keywords is predicted to be approximately $1. We predicted an average conversion rate (CVR) of 8% by reviewing industry data and found that the average cost per acquisition (CPA), or cost per lead, will probably range from $3 to $27. The average CPA for the top keywords will be around $17. This low cost is clearly attractive, considering the revenue to be generated.
The volume of clicks in the industry is predicted to be above moderate, with some keywords generating upwards of 20,000 clicks each month. The average keyword will generate around 3,600 clicks each month. Google data shows that a quantity of 287 leads per month or more is achievable with proper campaign management. This rate has the potential to grow as the economy continues to improve.
Optimal Ad Technology: Maximizing Leads & Profit
Handyman / General Maintenance and Repair Lead Buyers
Lead buyers in the industry include franchise businesses such as Michael and Son, Closets by Design and Fresh Coat. Small, local maintenance businesses may also benefit from lead buying. Apart from the obvious advantage of gaining qualified leads easily, there is an advantage to outsourcing this marketing process. Lead generation companies define the cost and manage the campaign. You simply decide if the investment is warranted. Then you can focus on what you do best, which is providing quality maintenance and repair services.
Based on our predictions, for which we gathered data from multiple sources, the average price per lead in the handyman industry ranges from $3 to $27.
Optimizing Conversion Rate (CVR)
Keep in mind that, by optimizing conversion rate (%CVR), the average PPL could potentially decline for a lead buyer. That is, through a PPC optimization and landing page optimization strategy, increasing the conversion rate can decrease the average CPA of a lead generation PPC campaign, potentially decreasing the average PPL for the lead buyer.
Current Industry Competition
Based on current competitor data, the average ranking difficulty for top keywords is approximately 51%. Essentially, the current competition within the handyman industry is rather moderate. As we've stated before, the maturing state of the industry indicates that it's a good time to gain market share by obtaining leads.
With regards to competitors, the average number currently competing for the top handyman industry keywords in PPC lead generation is 53. The top 10 competitors in handyman PPC management lead generation include:
As you can see, most of the top competitors are not local or regional businesses. Should you choose to employ a lead generation campaign, it will be targeted to your specific region if required.
Lead generation via precisely targeted PPC management is typically an effective means of increasing sales. It allows consumers to connect to your business as they are searching for your services or goods online. Leads tend to be highly qualified once they have submitted their information. Further, the cost of gathering these leads is expected to be low compared to the revenue they tend to generate.
Whether small businesses or dominant, regional service providers, general maintenance companies can benefit from PPC lead generation by increasing profits and buying time to focus on what really matters.
PPC lead generation campaigns are highly customized and optimized, by campaign managers, in order to reduce costs without losing leads. Now is a particularly strategic time to employ such a campaign, we believe, due to the transforming state of the industry. Before the sharing economy takes over and while the general economy is healthy, seizing market share is important.
Are you a handyman or general maintenance and repair leader who is interested in lead generation through precisely targeted PPC management? Contact us today to discuss how we can help you succeed.
Gibson, Scott. "How Long Stuff Lasts." This Old House. thisoldhouse.com. (link)
"Handyman Service Franchises in the US: Market Research Report." May 2016. IBISWorld. ibisworld.com (link)
"Remodeling in the US: Market Research Report." March 2016. IBISWorld. ibisworld.com. (link)
"American Fact Finder." United States Census Bureau. (link)