Lower Customer Acquisition Cost with These 5 Questions

As a local home service business, you're used to spending $300 or more on Google ads and other third-party platforms to acquire a single customer.

We've talked about customer acquisition costs (CAC) for local home service businesses in another post. Most case studies cite a CAC of $250 to $350 on average for local home service businesses.

Granted, your services typically cost anywhere from $100 for a maintenance appointment to a $20,000 sewer line replacement. (Depending on your industry and the clients you serve.) 

So if you spend $300 to acquire a customer who books a $20,000 job, it's all good, right?

Maybe. But here's the thing: high customer acquisition costs shouldn't be the norm.

And you shouldn't rely too heavily on Google to generate new customers.

Why you need to stop relying too heavily on third-party platforms to generate customers

What would happen if Google went bust? Sure, that's highly unlikely to happen. But it's something you should consider.

Plus, Google is saturated and highly competitive. Bids are increasing by the day. Of course, you don't need us to tell you that.

But maybe you do need us to tell you it's time to stop running on that treadmill.

It's time to rethink a strategy that relies too heavily on Google Ads and third-party platforms whose results you can't control.

It's time to re-evaluate how you communicate with your customers to deliver a 10-star customer experience.

It's time to work smarter, not harder.

Chasing after new customers on Google that have never heard of you is working hard, not smart.

Build better relationships with your past customers to generate repeat business from the people who already trust you.

How can you do that?

Branding is certainly an influence. But you also need to look inward, at your internal processes.

If you're looking to lower customer acquisition costs, your sales and marketing teams should ask themselves these 5 questions.

Do you provide an omnichannel experience?

That is, a frictionless experience with consistent messaging across all your channels, both digital and physical.

An omnichannel experience requires your brand to be present and engaged 24/7. It incorporates all channels and all departments.

Omnichannel marketing strategies might include:

• using live chat to contact a visitor on your product page
• retargeting customers who abandoned a product or service through Facebook ads
• deploying CSRs to call customers who engage with your marketing emails

To grow in 2020 and beyond, you need to open up every possible avenue of communication with your business. Your competitors probably already have.

We know managing all those channels — on top of running a business — is challenging. That's why integrations between platforms are crucial. Not just for analyzing the data, but also for staying on top of inbound messaging.

Do you respond instantly to customers?

If not, that's a problem.

Customers have come to expect instant responses. Even from the local businesses they support.

That's a direct result of the Amazon-level customer experience.

1-tap buy. Same-day delivery. Instant messaging. Your customers don't just want instant gratification. They expect it.

When a prospect is shopping around for a home service company or need an emergency repair, which one do you think they'll choose?

The company that replies instantly? Or the company that takes 5 hours to respond to an email?

The answer is pretty obvious.

For many consumers, home services are commoditized. That's why customer experience is crucial for growth.

Prioritize customer experience across all channels, and the rest will fall into place.

What are your lead response times?

If you don't know, that's a problem.

Set aside time to dig deep into your customer interactions. Pull data from across your channels. Phone calls. Facebook messages. Emails. Texts.

From there, identify weaknesses and areas of improvement. Then create an action plan to improve employee performance and minimize response times.

We know it sounds overwhelming and time-consuming. But fixing those slow response times is crucial for getting both new and existing customers in the door.

Lead response times matter. You're 21 times less likely to qualify leads you contact 30 minutes after submission. You're extremely more likely to make contact if you reply within 5 minutes.

Those stats come from a 2012 Forbes article. Automated and live chat have certainly decreased that optimal response time.

Who manages your customer communications now?

Whether your customer service department is a team of 1 or 25, inefficient customer service reps drain precious company time and resources.

If the business isn't coming in, you might be paying your CSRs to play solitaire or throw a ball against the wall.

We know because we've seen it happen to some of our own clients. (That is, before we came along and created smarter customer interactions and workflows to drive new and repeat business!)

It's not always the department's fault, though. So before you blame your CSRs or scrap the department, evaluate the internal processes behind that inefficiency. 

How could your CSRs better spend their time (and your marketing budget) to improve relationships with new and existing customers?

How much do you invest in time and labor for customer communications?

This goes hand-in-hand with the dilemma we just discussed: inefficient CSRs.

Those customer service reps are sitting on a goldmine of past customer data. And if they're not reviewing it and reconnecting with those past customers regularly, chances are you're throwing money down the drain.

Let's paint a picture for you. You spend $1,000 on Google Ads. You get 20 clicks. Even with a 10% conversion rate — which is pretty optimistic for most industries — you might book 1 or 2 jobs.

But let's stay optimistic here. Say you generate 2 jobs. Do you have a plan to re-engage those customers later on down the road? What are you doing to stay top-of-mind when they need a tune-up next year?

Don't make the mistake of assuming they'll come back just because they chose you in the first place. Do your best to provide a world-class customer experience to build trust and increase your chances of serving them again in the future.

How to reverse the treadmill effect and lower customer acquisition costs

If you're like many local home service businesses, you might be wondering how on earth you can be present and engaged on all your channels 24/7. How can you possibly respond instantly to all your customers when you've got your hands full running a business?

You might not think response times matter. Or that employing someone to manage communications is worth it.

We get it. You're strapped for resources as it is. You need to get those phones ringing and those trucks moving ASAP.

We know you likely don't have the time or budget to build your own omnichannel marketing strategy from the ground up.

You need a done-for-you, automated solution that requires minimal effort to set up and execute.

That's where we come in.

Build better relationships with your customers and unlock explosive growth with ZyraTalk. Create smarter customer interactions pre- and post-sale throughout the entire customer journey with automated messaging, email marketing, and so much more.

Our growth suite is tailor-made for home service industries. We serve over 2,000 clients in HVAC, plumbing, electrical, and carpet cleaning verticals. Some of those include the most trusted brands in home service, like Benjamin Franklin, Stanley Steemer, Roto-Rooter, and more.

Ready to turn off the treadmill? We'd love to join your team. Contact us today to discover how we can help you decrease customer acquisition costs and increase revenue from the loyal customers who already trust you.