Lead
A prospect who provides their name, email, and phone number in order to get a quote or claim an offer from your company.
SQL (Sales Qualified Lead)
A lead who has the ability and the desire to pay for your service.
If you offer kitchen remodels and you’re talking to a prospective customer who’s in the market and can afford your service, they are a sales qualified lead for you. Not every sales qualified lead will buy from you; some will choose to work with competitors.
Booking Rate (or Set Rate)
The percentage of leads that you turn into sales appointments. If you get 10 leads and set 3 in-home appointments, your booking rate is 30%.
Close Rate
How many sales appointments turn into sold jobs. If you provide estimates for 10 homeowners, and 4 move forward with you, your close rate is 40%.
CRM (Customer Relationship Management)
A software platform that allows you to keep track of your customers and leads in one place. CRMs often utilize a sales pipeline feature, so you can prioritize your best leads. Most CRMs include automatic email and texting features as well.
Lead Nurturing
Building a relationship and staying connected with your leads. This can be done through manual follow-up or automatic emails and texts.
Some leads won’t be ready to buy just yet. Nurturing these leads over time improves your chances of earning their business.
CAC (or CPA)
Stands for Cost to Acquire a Customer (CAC) or Cost Per Acquisition (CPA). The total advertising investment it takes to acquire a single customer. If you spend $10,000 in advertising to get 10 jobs, your cost to acquire a customer is $1,000.
ROI
Return on investment. Sometimes ROI is written as a percentage and sometimes as a ratio. If you invest $100,000 in marketing that results in $1,000,000 in revenue, you have a 10:1 ROI.
USP (Unique Selling Proposition)
Also called UVP (Unique Value Proposition). The main things that set your company apart from other local contractors. Some owners of contracting companies work directly with homeowners, but don’t offer preliminary 3D designs. Others offer 3D designs, but the customer doesn’t get to work directly with the owner. Each company has something to offer that not everyone else does - a unique proposition for why customers should choose them.
ICP (Ideal Customer Profile)
A description of your ideal customer. This can be based on demographics, psychographics, or both. The ICP for remodelers who offer 2-day shower installations is a homeowner who values having the project completed quickly, is in the market for a walk-in shower, and who has the money to pay or can qualify for financing.
ToFu (Top of Funnel)
Customers who are early on in the buying journey. They aren’t ready to get quotes yet, and may or may not go through with the project. But they start gathering information and trying to understand their options.
Providing information via your website, YouTube, or email campaigns will help you connect with Top of Funnel prospects. You will have a better chance to earn their business as they get closer to a decision.
MoFu (Middle of Funnel)
Middle of Funnel prospects are closer to a buying decision and may have a general idea of what they want. Some homeowners start getting quotes at this stage, but they may take a while to move forward.
A good sales funnel with lead nurturing will help you walk with customers as they get closer to buying.
BoFu (Bottom of Funnel)
These prospects are ready to buy right away, barring any major disruptions to their plans. It’s important to move quickly
Demographics
Demographics describe the physical characteristics of your audience, like age, gender, income, etc.
Psychographics
Pyschographics describe how your audience is thinking. Understanding how your customers think will help you know how to advertise. For example, if you start an ad with “are you considering a kitchen remodel?” you are more likely to connect with homeowners who are high in the funnel and not quite ready to buy yet.
Buyer’s Journey
The entire process someone goes through that leads them to a purchase.
Let’s make up a customer and call her Sally. She is visiting with her friend, who mentions another friend who had some hardscape work done in her backyard. After seeing pictures, the idea is planted in Sally’s mind. Eventually she will do her own research, get a few quotes, and hire a contractor. Understanding the typical buyer’s journey your customers take can help you be more effective with your marketing efforts.
Marketing Funnel
A multi-stage system designed to attract and convert your customers. They might see an ad on Facebook, and then visit your website and read reviews. Later, they’ll come back to the website and fill out their contact information. They are then redirected to a “Thank You” page with a video about your company, which helps nurture the lead. This entire process is called your marketing funnel.
Sales Funnel
Your internal process for moving your leads closer to becoming new customers. It may include automatic email and text follow up, and a written process for calling your leads, and a sales presentation. It could also include upsells or cross-sells.
Upsell
Offering additional services and benefits to a customer to increase the revenue you generate from a project. For example, this could be an extended warranty or more expensive material options.
Cross-Sell
If your company provides both HVAC and plumbing services, for example, you have an opportunity to cross-sell. For example, you may get called out to a customer’s home for a plumbing repair, and find out that they’re looking to replace their HVAC system as well. Selling the additional service is called cross-selling.
