3 Marketing KPIs You Can't Afford to Ignore Blog Header
February 24, 2020 by Matt Buchanan

3 KPIs You Can't Afford To Ignore

How challenging is it for you to answer the following questions?

  • How much does it cost you to acquire a new customer?
  • What is your ROI?
  • What percentage of opportunities do you turn into customers?

If you can’t answer these fundamental questions about your existing marketing efforts, you are shooting free throws in the dark. Sure you may make a shot every once in awhile, but it’s unlikely that you will and you won’t even know it if you did.

It’s the exact same thing with your marketing efforts. Without knowing the answer to those core questions, and understanding what a KPI is in your marketing strategy, it’s impossible to maximize your existing marketing efforts and make wise marketing decisions in the future.

So do yourself a favor and stop taking blind shots, put the ball down, and go turn on the lights.

We speak with thousands of local service companies each year, all of whom have an earnest desire to grow their business. Yet the majority of them have a very hard time answering those questions.

Let’s break down the implications of that knowledge gap and discuss things you can do to answer these questions and make more informed marketing decisions.

Download Now: Guide to Lead Generation for Home Service Businesses

KPI #1: Cost Per New Customer (CPA)

How much does it cost you to acquire a new customer?

When it comes to analyzing your marketing efforts, you have to have a starting point. For most companies, the simplest starting point is identifying how much it costs them to acquire a customer.

Here is the simple equation:

CPA Formula

It seems simple, right? Like we said, very few companies we talk to know that number. And when they think they do, after doing some deeper digging it becomes obvious they don’t have an accurate number.


Because oftentimes companies don’t distinguish between new customers and returning customers.

As an example, you may have some tracking capabilities on your website and determine that you spend $5,000/month advertising your website and it results in 25 jobs. But if you dig deeper, you may come to realize that 10 of those jobs were from existing customers that you had already paid to acquire through previous marketing efforts. So what initially looked like a $200 “cost to acquire” number was actually $333.

Using a CRM tool that allows you to know with certainty whether or not the customer calling for service is new or existing is crucial when trying to calculate your cost to acquire a new customer and evaluate any marketing service. By investing in a tool like Service Titan, that allows to accurately track these figures, you’re not only able to compare various marketing efforts to understand which is producing the lowest cost to acquire a customer, you’re also able to optimize each marketing effort to drive down that cost across all channels.

Service Direct Lead Management

Knowing this KPI gives you a solid apples-to-apples comparison to judge all of your marketing efforts. Some services may seem expensive to you based on how much you spend with them each month, but once you use better tracking, it may be the case that service is the most cost-effective channel you have to get new customers. Conversely, you may pay less for other services, but what if they’re not really producing new customers? Wouldn’t that money be better spent elsewhere?

Secondly, once you know your cost to acquire a customer by your various marketing channels, you can begin to decide whether or not those channels make sense for your business. At some point, you can’t justify the cost of the customer when comparing it to the value of that customer to your business. But until you actually know your cost to acquire that customer and the average ticket price from that customer, it’s difficult to make the right decision from one marketing channel to the next.

Download Now: Guide to Lead Generation for Home Service Businesses

KPI #2: Return On Investment

What is your ROI from your marketing efforts?

It seems like such a simple calculation. How much did you spend on a certain marketing campaign and how much revenue did that marketing spend generate? Here is the calculation:

ROI Formula

Yet very few service companies can assign an accurate ROI figure to their marketing efforts.


It comes down to poor attribution. While it’s impossible to accurately track every single new customer engagement and assign it to the appropriate marketing channel (through email, text, live chat, social media and phone), the majority of these interactions are still done via a phone call. This is great news because you can cost-effectively assign a tracking phone number to every single marketing channel you utilize.

In fact, you can even have the number on your website dynamically display based on which marketing channel the visitor arrive from. If you’re still having your CSR ask ‘how did you hear about us?’ and using that as your tracking mechanism, understand that the information you’re collecting is inaccurate to the point that, at best, it’s completely useless to your business and at worst, it’s causing you to make the wrong marketing decisions based on bad information.

By investing in a call tracking solution that allows you to assign a number to every one of your marketing channels, you can begin to understand your ROI across these channels.

KPI #3: Win Rate

What percentage of opportunities turn into customers?

This is perhaps one of the most crucial questions you have to be able to answer about your business. Why? Because no matter what marketing you are paying for, it’s only as good as your ability to take the opportunities produced from that marketing and turn it into revenue from paying customers.

Booked Appointment Rate Formula

Here’s an example that we see every day when reviewing the leads that we generate for our clients. We see that some clients are able to turn 80% of our calls into appointments and, in the same industry and city, we have another client that only turns 30% of our calls into appointments.


Some companies are better than others at taking opportunities and turning them into customers.

Average Booked Appointment Rates of SD Clients

Where do you fall on the spectrum? It’s important to know what your win rate is for several reasons. Firstly, you need to identify if that is a problem or not. Secondly, you are never going to see a strong return from any marketing efforts if you are on the low end of the spectrum. Lastly, you will be wasting any additional spending on other marketing efforts.

You are much better off improving your phone habits and your in-home sales efforts. This way, you can extract more revenue from your existing marketing efforts instead of just throwing more money at marketing in an effort to keep your call log full and your techs busy.

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