Local HVAC companies spend $250 to $350 to acquire a single customer, and most of that goes to Google Ads competing against everyone else in town. The faster way to lower that cost is not to outbid competitors, it is to lean on the customers you already have. Referrals, repeat business and smart retention drop your blended acquisition cost far more than another dollar of ad spend.
The average local HVAC company spends anywhere from $250 to $350 to acquire a single customer. Customer acquisition involves more than just ad spend, but that's what we'll focus on in this post — Google ads specifically.
Some of our own HVAC clients spend as much as $80,000 per month on Google Ads. Granted, the return on that investment is significant. An A/C install, for instance, costs anywhere from $5,000 to $6,000.
Spending $300 to acquire a customer is nothing if that customer books a $6,000 job. Right?
The competition is fierce
Average local HVAC customer acquisition cost: $250–$350
An A/C install runs $5,000–$6,000, so a $300 acquisition cost pays off on the first job. The problem is that only about 3% of cold ad clicks convert, so most of that spend never lands a customer at all.
You're already painfully aware that you're not the only local HVAC company in town. You're competing with dozens of other businesses for the coveted top spot on Local Service Ads pages.
To illustrate, we've pulled industry keywords from a targeted location of Phoenix, AZ, where our company is based. The high end of the bid range for keywords like "HVAC company Phoenix" is around $50. Of course, you're targeting multiple keywords. Consider these keywords and their high-end bids:
- "ac repair Phoenix": $75
- "HVAC repair Phoenix": $75
- "heating and cooling Phoenix": $65
Looking at these numbers, you might assume the prize goes to the highest bidder. But it doesn't always work that way, which is good news for small HVAC companies with limited marketing budgets.
Google's Quality Score is key for determining which ad gets the top spot. Pay special attention to what Google calls "The Big 3": ad relevance, expected click-through rate, and landing page experience. If you're working with a limited budget, do everything you can to increase your Quality Score.
But you can bet your competitors are working hard to improve their Quality Scores too. So how do you stand out? Simple: don't put all your eggs in the Google Ads basket.
Customer retention > customer acquisition
Here's the problem: local HVAC companies are spending hundreds of dollars to attract a single lead who's likely never even heard of them.
Yes, brand visibility is important. But what are the chances that lead will convert into a customer?
Once you've landed that customer, you'll want to hold on to them. Repeat business is vital for local HVAC companies.
Of course, increasing the number of customers you serve is the goal — to an extent. But there's an easier way to attract new customers: leverage your existing ones.
Keep those customers happy, and they'll return the favor by recommending you to their friends and family. Which generates new customers. Those customers already trust you to get the job done, because they trust their friend or family member's judgment.
Sound familiar? Just 10 years ago, word-of-mouth reigned supreme in home service marketing. Local service companies relied on word-of-mouth to survive.
Now, home service companies have tons of shiny marketing tools at their disposal. SEO, SMS, email, content marketing, local services ads. (To name just a few.)
But word-of-mouth is still just as important today as it was back then. Remember that client we mentioned that spends $80k on Google Ads? They also generate 70% of their revenue from returning customers!
As the old saying goes, if it ain't broke, don't fix it.
Clever ways to decrease customer acquisition costs and keep current customers happy
Staying top-of-mind is one of the best ways to retain current customers and gain new ones. Here are a few clever ways you can do both.
Text your customers.
We're big believers in SMS marketing because it works. Text messages have higher open rates than emails. Your customers will appreciate text notifications on discounts, promotions, and reminders to schedule their annual service appointment.
Bucket your customers to create effective SMS campaigns. You might group customers by how much they spend ($200, $500, $1,000, etc.). Another option is to create a list of customers serviced within the past 2 years. Then, craft relevant, personalized messaging for each list.
Offer an incentive for referrals.
Everyone loves a good discount. Consider offering your customers a credit toward their next service when their referral books a job with you.
A $100 credit sounds more enticing than a 20% discount. Why? Because it feels more like they've received $100 instead of saving $100. Plus, it saves your customers from having to do mental math.
A/B test everything.
Landing page experience is a key factor in determining your Google Quality Score. If your ads or landing pages aren't converting as well as you'd like, experiment and test. Sometimes, increasing conversion is as simple as changing a word or two in your CTA.
Ask your customers for feedback.
The easiest way to find out why customers choose you over your competitors is to ask them. Create a quick survey asking customers to suggest improvements and describe your strengths and weaknesses. Then apply those suggestions to your business. Don't forget to add an incentive to encourage responses!
Are Google Ads still a good way to market my local HVAC business?
There's a reason why local HVAC companies spend so much on Google Ads. HVAC enjoys one of the best Google Ads conversion rates (3.3% on average) of all industries within home services.
So yes, you should advertise on Google. It's a smart way to boost brand visibility, especially if you're new to SEO.
Just like every other marketing strategy, advertising on Google is only one way to get new customers and maximize brand visibility. Although it's a worthwhile investment, it's a costly one. Especially when the competition is already stiff.
Focus on generating repeat business and the rest will fall into place.
Need to get those trucks moving and those phones ringing? Check out our guide on generating leads for local HVAC companies.
Customer acquisition cost FAQs
What is a typical customer acquisition cost for HVAC companies?
Most local HVAC companies spend between $250 and $350 to acquire a single new customer, largely through paid channels like Google Ads. The figure varies by market and competition, but paid search is expensive because so many companies bid on the same local keywords.
Why is my HVAC customer acquisition cost so high?
Usually because you are relying on paid ads to reach people who have never heard of you, and only a small share of those clicks convert. High keyword bids in competitive markets push the cost up further. Leaning more on referrals and repeat business lowers your blended cost.
How can I lower my customer acquisition cost without spending more on ads?
Focus on retention and referrals. Keeping existing customers happy generates repeat jobs and word-of-mouth leads that cost almost nothing. Text and email your past customers, offer referral incentives, and make sure you answer and book every lead you already pay to generate.
Are Google Ads still worth it for HVAC?
Yes, as one channel among several. HVAC has one of the stronger conversion rates in home services, so ads drive real jobs. The mistake is treating them as your only source of customers rather than balancing them with lower-cost retention and referral marketing.
Do referrals really cost less than paid ads?
Significantly less. A referred customer often costs only a small incentive, if anything, and they tend to convert at a higher rate because they already trust the person who referred them.
How does answering every call reduce acquisition cost?
Every missed call is a lead you paid to generate and then lost, which raises your effective cost per customer. Capturing and booking every inbound lead means more of your existing ad spend turns into actual jobs, lowering the cost of each one.
Lower your cost per customer
ZyraTalk answers, qualifies and books every lead your marketing brings in, and follows up with past customers automatically, so you get more jobs from the spend you already have.
Book a demo- Books every inbound lead
- Re-engages past customers
- Works 24/7, never misses a call
