How much are leads for your business?

All right, in this video, we're going to discuss how much do leads cost? And this could be for a carpet cleaning company, it could be for an air duct cleaning company, H vac, whatever type of service that you're doing, I'm going to show you how you can figure out how much a lead should cost for your business. So if you're doing digital advertising, I just pulled this example up here, but air duct cleaning near me, these are the ads that you could run. And I'm sure that you've, you've tried these, or maybe you're thinking about trying these if you're looking up how much leads should cost. So these right here are called Google local service ads. And this is actually how we're going to figure out how much leads should cost based on what Google is telling us. And these are your search ads. It's really hard to see what a lead is going to cost with these. This is your organic stuff, which has nothing to do. You can't pay to be here. You could pay for an ad, but you can't pay to actually be listed organically. And then you're going to see, like, Angie, you're going to see Yelp throw thumbtack. Some of these other ones on here, they're not on here. But in your market, you'll see other secondary advertising platforms. And a lot of times they'll say, like, oh, you'll get this many clicks, or they'll give you like, a budget and a range. But most of the times we get questions about, well, how much are leads actually going to cost me? What is my cost of acquiring a new customer? And if you're planning for a budget or you're trying to figure out, okay, if I spend X amount of dollars, I should get X amount of leads and then convert them into X X amount of jobs, this is a good exercise to do. So the baseline of how we do it with the companies that we work with is through Google local service ads. And so what you do is you go to ads.google.com localserviceads and I'll put this link down below. And when you go here, you can click on your cost, and right here you can put in your zip code. So I'm just gonna put in our zip code. And then let's say you want one lead a month. And then here's why it doesn't matter your industry, because you can just select your industry. So, and it's not for every single one. Like, for example, air duct cleaning, when you build out Google Local service ads. You can get very specific about the type of keywords that you want to rank for and that you don't want to rank for. But let's just say h vac. Then it's going to say for one lead in this zip code, it's going to be 25 to $38. So what that tells us is let's say we do carpet cleaning, air duct cleaning, and our average sale is $400. Then we're going to spend 10% of that in order to get the $400. Let's say $40 to make $400. Now we know that you're not going to close every single one. So let's say that you close 50%. Then you're going to need two of these leads, which is $80 to get $400, which is a 20% conversion, 20% revenue to marketing expense ratio. So you can figure out your numbers based on how much a lead is going to cost you. And maybe it costs you 25 bucks and you get two of them, it's 50 bucks and you charge $500. That's 10%. That's a 5x return on your money from spending $100 and getting $500 or whatever the math is. You can figure it out from there. So then let's say that in your market, because Google local service ads are new, they're rolling out. Let's say that you don't have these in your market yet. You can just pick something. A lot of times they're on the east coast and the west coast. They haven't made their way into central US So you can just pick like DC that's the market that we're in. They're pretty much all over. But I just want to show you this. So in H Vac you can see how it's 25 to 38 bucks. In carpet cleaning, let's see 23 to 35 bucks. But let me show you this one, typically with, well, movers is usually a little bit more expensive. You have 36 of 54. But this one, when we look at like remediation or water damage, these ones are usually a lot so and rightfully so. Right. A water damage job or a mold job could be thousands of tens of thousands of dollars. So that is how people are paying for leads. Now Google local service ads specifically, what we know is that if you see here they only show three people in this top area. However, 10 +H vac pros nearby, there's probably 30, 40, 50 people that are paying for Leads, and you only pay when you get a lead. So you literally only pay when someone calls and clicks you. They're not even paying right now. They only pay here when I, if I, if I interact with them. So that is how these works. But you can see there's going to be a bunch of them on here. So what can you do for your business? If you do want to run these Google Local Service ads, If you notice, they all have pretty good reviews and this company only has 24 reviews, but they have a decent ranking. So obviously getting reviews, which you talked about a lot on this channel before, but having a baseline here of even if it's on Angie, even if it's on thumbtack, Yelp, whatever. You know, if you, if you're going to get water damage leads and you're going to spend $1,000 on Yelp, then theoretically you should get maybe 10 to 15 leads on Yelp. And if you don't get that, then it's not performing properly based on what Google is telling you that it can get you. So that is how we use these numbers. Again, go right here, put this in. And it's a really cool tool. Some of the ones that we haven't, that haven't been on here is like. So we looked at water damage, but they don't have fire damage yet on here. So there are some that are not on here and then there's some that are. We've also ran these for law firms, handyman services, roofers, real estate agents. So it pretty much works for anyone you can see. Tax lawyer. Those are gonna be more expensive as well. But yeah, if you have any other ideas about leads and how you calculate what your lead, your lead costs would look like, I would definitely be curious. This is what we do and it's been very advantageous for our clients because we can tell them, hey, if you spend X amount of dollars, you should see X amount return. And they're happy with that because then we can show them the roi. Oh, one other thing I wanted to share about Google Local Service Ads. So on the back end of Google Local Service Ads, once you get them set up, all the calls are actually recorded. So you can log into your Google Local Service Ads account and listen to your leads. And if you deem that they're not good, you can actually tell Google like, hey, this wasn't a good lead and they'll credit you back the money usually. So it's a really nice way to blend that. We run these ads for our clients. So if that's something that you're interested in, we'd be happy to strategize with you and see if we might be able to help you. If not, no worries. Hope this helps and be sure to hit like and subscribe. We post content about growing local service businesses and we'll see you in the next video.