Midsize to large home improvement companies love canvassing for one reason: The leads just keep on coming.
Any face-to-face marketing program—that is, one that directly connects with homeowners to locate those who are potentially interested in the product—can generate a predictable number of leads. But canvassing isn’t stuck in the shopping mall or limited to whatever shows and events are available. It can be done any day of the week, barring interference by local authorities or inclement weather.
But ask the owner of one of the many companies that have tried to canvass and haven’t succeeded if it isn’t harder than it looks. Canvassing can blow a hole in your marketing budget, says Chris Thompson, president of Canvass King, an Ohio company that helps home improvement companies and other businesses generate canvassed leads.
Labor: the Major Expense
So how is it that canvassing has the potential to be such a marketing budget disaster? Say you’ve set your marketing budget at 10% of sales. That means the cost of all the ways that you generate leads will average out to 10% of whatever sales you bring in. But if you’re new to canvassing, those efforts could cost more than 10%—possibly a lot more. Especially as you get started and are still creating systems to manage your canvassing efforts.
“In the beginning, it may cost you 15% to 17%,” says Dave Yoho, president of Dave Yoho Associates, the oldest, largest consulting group in the home improvement industry, which recently presented a webinar called “The Science of Successful Canvassing.” If compensation is properly structured, Yoho says, “you can get that cost down to a 10% fully loaded cost.” But that depends on many variables, he points out. For instance, is a van essential? A canvassing manager? Uniforms, printed materials, a call center?
Actually, acquiring all those elements for your canvassing effort won’t guarantee you the leads you’ve budgeted for. The key metrics, says Charles Gindele, president of Renewal by Andersen of Orange County, in California, all involve time, as in man-hours. “The biggest out-of-pocket expense is actual labor,” he says—how many hours of “knock time” it will take to produce a set appointment.
Gindele, whose company began canvassing at the beginning of this year and expects to generate a $1 million in sales from the effort, describes set leads as “a metric that matters.” He says that a reasonable estimate of your marketing cost comes by calculating the man-hours it takes to produce a certain number of leads that in turn convert to a certain percentage of presentations that close X percent of the time. “When you’re in the range of $18 to $20 per demo, that number pencils,” Gindele says.
Three Possible Pitfalls
Companies sometimes shy away from canvassing because of the time and effort involved in endless recruiting.
The recruiting is, indeed, continuous, as Gindele found out. But the key is not to keep the van full, it’s to fill it with the right people. “The good results come from some of the people but not all of them,” Gindele points out. Don’t hesitate to regularly replace those who aren’t meeting expectations.
Thompson says that companies new to canvassing make three big mistakes that can crush their budget. “First, they don’t understand the numbers, and second, they don’t understand the need to follow-up with that lead,” he says. He suggests making not one but two phone calls to set the lead, which will increase the number of appointments and presentations that result. The third budget crusher involves converting those leads to sales. If they don’t sell, you’ve spent money for nothing.
Salespeople who are used to inbound leads need to know that they may have to “canvass their way back in” with a canvassed lead—that is, sell homeowners on the importance of the appointment—and that selling should pinpoint the homeowner’s pain or problem rather than focusing on price and competitors.
Jim Gehm, sales and marketing manager for Holmes Custom Renovations, in Cincinnati, is just now launching a canvassing program, which he hopes to build into a substantial lead source. Gehm expects to close at around 20% because prospects are so far in the front end of the buying cycle. But as time goes on and canvassing leads increase, he expects close rates to move closer to the 35% or more that the company closes on referral and Internet leads. “Right now it’s way too soon to tell,” he says.