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What is the value of a lead?

Jonathan Bryant

I had two conversations this week - one with a client, one with an interested party - who weren't quite sure why we do what we do.  

After thinking through the conversations in my head today, it made sense to me.  Our industry is very one-dimensional.  In fact, it always has been.  We've served our client for over a year, and they're thrilled with our professionalism, lead generation and service...but they don't know (or perhaps it rarely crosses their mind) why we charge per lead instead of the standard industry protocol of charging by the minute.  That begs the question...

WHAT IS THE VALUE OF A LEAD?

AnswerHVAC charges only for the qualified leads we generate, and a nominal fee monthly.  We serve all non-lead conversations as well, but those minutes accrued by satisfied (and sometimes dissatisfied) commercial business and homeowners can add up.

Let me offer up some simple scenario.

Client A is a commercial HVAC company in Los Angeles.  They are a $2M operation averaging 2000 minutes a month, with the occasional spike due to odd weather patterns (you know what I'm talking about).  Client A is billed for a 2500-per-minute block monthly, and that equals $2200 per month, or $1.13 per minute.  Every month, same bill, unless they go over the allowance.  When that happens, they pay $1.50 per minute, or $2500 for said month.

Now, 9 of 12 months, that 500 minutes is unused but charged, at a value of $565.  That x 9 months is a whopping $5K a year, on top of what Client A pays for three months of overages.  Client A understands that these are the rules, and sends a check.  I ask you...does it sting?  It should.

Client B is an AnswerHVAC client in Dallas.  They're also a $2M annual revenue business averaging the same 2000 minutes per month.  At $10 each, they invest $2000 a month in LEADS.  Those leads are worth an average of $600 each, and they close half of them.  They receive outstanding service from a company whose agents understand their business and the industry, and their customers feel comfortable, educated and appreciated.  

Client B has generated approximately $60,000 in revenue from AnswerHVAC at the end of the month, and hasn't paid a dime for minutes, or UNUSED minutes.  That equates to a 30:1 ROI.  

Now, Client A might have great service as well.  They might even have agents that understand the industry a bit.  But can you track the ROI?  Can you track the lost minutes ROI?  Your call center sure can...it's 100% of what you paid.

We've put this on paper, so if you'd like to see it in graph form, let us know...we're happy to send it along!

 

Jonathan

Service Guy