Phil Risher warns that doubling leads without the systems to handle them wastes money and creates chaos. An electrical contractor went from 70 to 140 leads in two months but closed the same 30 jobs. Before scaling lead acquisition, track your booking rate and closing rate to see if your team can actually convert them.
There's a point where getting more leads makes your business worse. We had an electrical contractor we were working with about $1.5 to $2 million, and he hired us. 2 months in, we doubled his leads. He went from 70 leads to 140 leads, and we got on the phone with him and he's like, dude, it's chaos. I can't keep up with all these leads. And the worst part was that he was still closing the same amount that he did last year. So he closed 30 of the 70 opportunities last year. This year he closed 30 of the 140 opportunities. And the problem is that, yes, more leads is what everyone thinks that they want. But when you put more leads into a bucket that is not big enough or has holes in it, it's going to be a waste of money and it's going to be a waste of time because you have to have the infrastructure to achieve the outcome that you want. Maybe you're thinking to yourself, oh yeah, I just need more leads in my business and then I'm going to grow. And that might be true, but you have to look at downstream. Do I have the capacity to turn those leads into jobs? And do I have the fulfillment opportunity? And also, do I have the infrastructure to make sure that all the leads that come in actually turn into jobs? Because you could get cheap leads, but are they actually booking into opportunities? That's a real question. So here's what you can do today. Number 1, know what your booking rate is. If I gave you 10 leads, how many of them are you booking into jobs? You can pull this from your CRM, but if you know it's 40%, 50%, then it's like, cool. I know that if I get more leads, then my booking rate will hold. Then know your closing rate. If I ran 20 estimates and I closed 10, that's 50%. Now you know the numbers. So if you add more water into the bucket, does your booking rate get worse or does it stay the same? This is how you know if you're ready to grow or not.
