Dispatch #66 - Origin Story: Where Profitable Construction Jobs Begin
Construction projects originate with customer demand, but that’s largely outside our domain of control. We can, however, influence the moment when demand first touches our company ecosystem: the appearance of a qualified lead.
What counts as a qualified lead? A customer you want to work with, who needs the type of work you want to do, and has a job located somewhere you want to service. Generate enough of those and you’re well on your way to success in the “Sell work, do work, get paid” trinity.
I can’t speak to lead generation from a qualitative marketing perspective, but I can share some simple tracking numbers that provide valuable insight into the efficiency and efficacy of a contractor’s marketing system.
If it takes more than an hour to get your hands on the answer to these questions, consider adding these key performance indicators (KPIs) to your monthly financial review.
How many leads did you get—company-wide—last month (or quarter, or year)?
What was their (best guess) total contract value?
Where did they come from? Be both specific (Alfred E. Neuman) and categorical (Architect).
How many bids did you send out?
What was the total contract value of those bids?
What is your win rate?
Don’t nuance these questions to death. Use simple ways to consistently calculate these values and you’ll soon have meaningful trend data about your company’s lead generation performance. Get too complicated and I guarantee that a year from now you won’t be consistently reporting anything useful.
In your lead log, include fields that speak to your business plan, like these:
Customer name
Customer segment (residential vs. commercial, health care vs. warehouse)
End-user/owner (might be the same as your customer, might not)
Sales rep (the individual in your firm who generated or received the lead)
Cost estimator
Job location (city, state)
Job type (data center, swimming pool, highrise demo, boiler replacement)
Armed with these data, a little number crunching will let you zero in on the performance of your company’s lead gen system and its many contributors. Done with transparency, accountability, rewards, and recognition, this can be a game-changer to achieving long-term success.
Need help with this or other financial matters faced by construction contractors? Let’s talk!
David Stern CFO makes every effort to provide useful and accurate information. This content, however, is not intended as a substitute for specific business-related financial advice. We disclaim all warranties and liabilities from its use.