Many HVAC companies make the mistake of using a linear sales approach that focuses specifically on driving sales. There's no denying the fact that sales are important, but there are other metrics that affect the performance and success of a HVAC company. If you own or manage an HVAC company, you should consider tracking the following sales metrics. Doing so will provide a deeper level of insight into the effectiveness of your sales strategy while subsequently revealing new ways to optimize and improve your sales efforts.
Lead Velocity Rate
Lead Velocity Rate (LVR) reveals the growth or contraction of your heating company's lead generation efforts for a given period (typically per month). If you secure 100 leads in January and 130 leads in February, for instance, your company's LVR for February is 30%. A positive LVR indicates that your heating company is generating more leads than in previous months. If you have a negative LVR, it indicates that your furnace company is generating fewer leads than in previous months. Focus on increasing your HVAC company's LVR to fill the top of your sales funnel with lots of leads.
Lead Response Time
This metric refers to the average time it takes your HVAC's sales team to reach out to a lead after acquiring his or her contact information. Ideally, HVAC sales reps should contact leads immediately after obtaining their contact information, but this doesn't always happen. It can take hours, days or even weeks for a sales rep to contact a new lead. According to a study cited by Vendesta, fewer than one in 10 companies have an average lead response time of five minutes or less.
Arguably the single most important HVAC sales metric is closing rate. This refers to the percentage of HVAC leads or prospects to whom you pitch your company's product or service that actually buy it. If you pitch a product to 500 leads and 100 of those leads buy it, for example, your closing rate is 20%. Closing rate is essentially another name for conversion rate. Most HVAC companies, however, use the term closing rate because it more accurately reflects the selling environment in which they operate.
Customer Acquisition Cost
How much money does your HVAC company spend on average to acquire a customer? Known as customer acquisition cost (CAC), this is an essential sales metric you need to track. There are both direct and indirect expenses associated CAC. Direct costs include marketing and advertising, whereas indirect costs include sales reps' time. By maintaining a low CAC, your HVAC company will generate higher profits and achieve greater success.
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Lifetime Value of Customer
In addition to CAC, you should also track the average lifetime value of your HVAC customers. What is the lifetime value of HVAC customers exactly, and why does it matter? The lifetime value of a customer refers to the average amount of money an HVAC customer typically spends with your company over the course of his or her professional relationship with your HVAC company. Some customers may only make a single, initial purchases. Others, however, may return to make a half-dozen or more purchases. The lifetime value of an HVAC customer refers to the average amount of money that a typical customer spends with your company over time.
Lead Acquisition Cost
Lead acquisition cost is a key performance metric (KPI) that reflects the average cost of securing an HVAC lead. It's similar to CAC, with the primary difference being that CPC is the average cost of acquiring an HVAC customer, whereas lead acquisition cost is the average cost of acquiring an HVAC lead. Regardless of which channel or channels your HVAC company uses, it will probably incur costs when acquiring an HVAC lead. Rather than turning a blind eye to these costs, you should track them to determine your HVAC lead acquisition cost. If it's too high, consider using different channels or methods so that it doesn't hurt your company's financial health.
Time Per Sale
Time per sale is a metric that reflects the average time it takes your heating and air conditioning company to generate a sale. The longer your time per sale, the fewer sales, overall, you'll generate. Therefore, you should focus on speeding up your HVAC sales strategy to achieve a lower time per sale.
Qualified Lead Rate
You can't expect to qualify all furnace leads that your HVAC company secures. Qualified leads are leads that have been vetted for quality purposes. Some air conditioning leads are more likely to convert than others, which is why many HVAC companies use a qualification system. This involves analyzing the lead for certain characteristics, such as budget, level of interest and accuracy of contact information. Only HVAC leads that have passes this test are considered qualified. Qualified lead rate is the percentage of leads your HVAC company acquires that have been qualified. If your company attracts 600 leads in a month, 300 of which have been qualified, your qualified lead rate for that month is 50%.
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