Question: What should the average sale and closing ratio be for a tech lead?
Gary Elekes; Founder, EPC Training:
Well, it depends on the type of lead it is. I think there are service agreement club leads and then there are crisis demand service type leads – those are two different animals. The closure rate should be north of 80% on a tech lead. I think that the type of sales process that you use: Are you selling with your techs or are you selling with comfort advisors? Or are you a hybrid? We do both, so we have some selling techs and we have some comfort advisors that the techs pass the leads over to. The closure rates are also going to vary by month. The average is going to be 80% or above. You’re going to run some months where you’re closing 95% and you’re going to run some months where you’re closing 50 or 60%. I think the question is, overall, what should it be? Average tickets are a tricky thing because the type of product mix that you’re selling. We have some companies in the EGIA family that are ductless only. We have some companies in the EGIA family, like ours, we’ve got package units, split e-pumps, split-system air conditioners, we’re mostly an air-conditioner-only market. So, our average ticket is north of $14,000 today. A few years ago, it was about $8,000. One of the things you want to do with your technician generated leads is you want to track the type of lead, the medium that it came from, and you want to track the closing rates by tech, by department. You’re going to get some variance from that but those are basically the metrics. I think the most important part of that question is that you’re actually identifying that you need to track it. When you measure it, you can listen to guys like this on the other side of this call and they’re going to help you figure out how to improve that closure rate and how to improve the technique in terms of being able to close more transactions at a higher ticket. A maintenance agreement ticket is going to be a different ticket. I would break those down in our business as over-tens and under-tens. That’s just a threshold of the demographic age of the equipment. Over-tens, we expect that to be an opportunity for us, we track it that way. Under-ten, we don’t necessarily feel like the closing rates are going to be quite as high. If we’re offering a special promotion in say, the Phoenix market, where the weather pattern isn’t working in our favor, there isn’t a need. There’s no consumption going on, so it’s not a crisis. The closure rates are going to be much lower. We’re looking at 50% closure rates in our maintenance agreement club program on the under-ten-year-old equipment. On the over-ten, we’re closer to 75%. So, it’s a dramatic difference based on how you’re looking at the age and demographics. I think it’s a pretty sophisticated approach for a lot of contractors to be able to look in the database but I do believe it’s the evolution of what you want to get to. So, instead of just looking at one big number as one big bucket, you begin separating your customer list and you begin analyzing that just a little differently.