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The James Harcourt Lead Generation Report
| WFI is pleased to present the James Harcourt Lead Generation Report. Previous reports have been published in The Installer Magazine every quarter since 1997. It features Key information on current trends and effectiveness of different methods of lead generation. |
Widespread Improvements Show Leads Are Up
Some highlights this quarter:
Jason Currall, Marketing Manager, James Harcourt |
Lead Flow
Just under two in five firms improved lead generation in the last three months compared with the previous three months. Just under one in five firms saw a decrease and just over two in five saw no change.The difference between the number of companies reporting an increase over those reporting a decrease is the net balance, expressed as a percentage. A positive net balance indicates growth, a net balance of zero implies little has changed.
On this basis a net 20% of firms improved lead generation in the last three months compared with the previous three months (chart 1). Medium-sized firms (net 33%) were ahead of small and large firms (19% and 6% respectively). Companies in the North (net 30%) reported more widespread improvement than those in the Midlands and the South (19% and 14%).
Year-on-year figures show lead flow improved with a net 29% of firms reporting increases in the last three months compared with the same three months of last year (chart 2). Again, medium-sized companies (net 48%) saw more widespread improvement compared with small and large companies (25% and 10% respectively). Firms in the South (net 33%) were just ahead of firms in the Midlands (30%) and the North (21%). Companies with weekly frame production of between 125-300 saw most improvement in lead flow.
Number of leads
The average number of leads per firm was down 20% across all sizes of firms from 113 in May to 90 in August, but it was 11% up on August last year.
Retail Orders
As with leads, a net 27% of firms improved orders in the three months July to August (chart 3). Medium-sized companies (45%) reported most widespread increases compared with small (24%) and large companies (10%). Firms in the North (net 40%) were ahead of those in the Midlands (26%) and the South (19%).
A net 40% of companies increased order volumes in the last three months compared with the same three months of last year (chart 3). Firms of all sizes reported orders were up on last year. Medium-sized and large companies (56% and 52% respectively) were ahead of small firms (27%). Companies in the Midlands (net 59%) were ahead of firms in the North (35%) and the South (31%). Companies producing between 125-300 frames per week saw most widespread increases (68%).
Conversion ratios
| SIZE | Average leads per firm in August | Average orders per firm in August | Calculated average conversion ratio in August* |
| Small | 54 | 23 | 1:2.35 (43%) |
| Medium | 98 | 44 | 1:2.23 (45%) |
| Large | 214 | 95 | 1:2.25 (44%) |
Average order values
Average order values were marginally down from £2693 in May, to £2663 in August but 6% up on August last year (chart 4). Companies of all sizes saw order values drop slightly in August compared with three months ago.Firms in the North saw average order values rise by 34% in the last three months, compared with those in the Midlands and the South who saw order values fall (-2% and -20% respectively).
Finance
The percentage of firms selling finance rose to 16% in August compared with 10% in May.The average order value of finance sales was 25% higher than non-finance sales (chart 4).
“We have created a market plan for lead generation by monitoring every lead we get by lead source and each promotion. Every month we calculate the cost of each lead by source and with this information we can easily monitor the success of a promotion and how best to spend our budget.“After 15 years of local radio we have created a strong brand. Yellow Pages and Thompson's Directory, a small amount of local press and a strong web site updated on a regular basis, support public awareness. Over 45% of all sales are recommendations and add on sales.
“With an average window order value of over £3,300 we sell to the higher end of the market and spend 9% of turnover to find the right customer.”
Mr Chas Hollis, Sales Director
Radley UPVC Ltd, Didcot
Budgets
The average proportion of turnover spent on lead generation was 4.2% in the months June to August, compared with 3.6% in March to May (chart 5). Just over eight out of ten firms still spend 5% or less of retail sales turnover on marketing.
Lead Sources
The average number of sources used to produce leads is down from 6.6 in May to 6.4 in August. Seventy nine percent of firms interviewed use five or more different sources compared with 85% last quarter. The three biggest sources of leads were referrals and recommendations (mentioned by everyone), add-ons (98%) and sign writing on vans (81%).The single biggest source is referrals and recommendations (60%) up from 55% in May, followed by press advertising at 14%.
The internet is a lead source many companies are keen to develop.
Sales Planning
Thirty four percent of firms plan to sell windows and doors on the first visit, an increase of 17% on May. Only 14% of firms plan to sell conservatories in this way (chart 7).
“We always monitor our leads by asking all potential customers how they heard of us. This helps us to find out what works and how well - after all there is no point in wasting money.“After referrals, recommends and add-ons from previous customers we find that local radio is a good lead source. People listen to the radio at home and in the car so there is a captive audience.”
Mr D Allen, Sales Manager
NAC Plastics Ltd, Northampton
Overview
“The economy grew twice as fast in the first six months of the year than previously thought according to statistics” says Mike Rigby whose company produced this report. “The 'slowdown' which contributed to the Bank of England's cut in interest in July may not have happened and this is fuelling speculation that interest rates will go up in the coming months.“Activity in the housing market appears to be recovering from the sharp slowdown in the first half of the year and house price growth remains strong. House prices rose 1% in September putting prices 15.5% higher than last year according to the Nationwide. Figures from the Bank of England show that the number of mortgages approved in August soared to the highest level in a decade. But the massive rise in the last two years has led economists to predict a sharp slowdown over the next year or so. The Bank of England expects it to slow to zero in the next two years.
“The construction sector has been boosted by government spending on hospitals, prisons, roads and rail. The spending spree has come as a relief to the industry. Homeowners too are still spending freely, funding home improvements with record levels of mortgage borrowing.”
Comment
Jason Currall, Marketing Manager of James Harcourt who sponsor this survey comments: “Every three months we ask fabricators and installers what they do to generate leads. Activity ranges from low cost one off promotions to high investment long-term campaigns. Methods of generating leads rise or fall in importance so, depending on a mix of factors including the economy, consumer trends and your competitors it's a good idea to see what your competitors are up to.“In each survey, word of mouth (referrals and recommendations) and add-ons from previous customers come top. These are naturally more passive leads. More proactive lead generators, some more expensive than others, include direct mail, card or leaflet drops. But more traditional methods of generating leads such as telecan- and door canvassing look set to decline as changes to EU legislation will be made public in October. You can still be proactive without canvassing. Many companies will find that canvassing is no longer in tune with the times. There are more sophisticated ways of generating leads.
“For this survey we've chosen to highlight one lead generator in particular -radio advertising. For many national and regional firms it has proven itself an effective way to reach audiences. It is expensive in the short term, but done well and used appropriately it can be extremely effective in brand building and awareness. More than any other it can deliver leads and action instantly with special offers on date driven promotions.”
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The James Harcourt Report, a quarterly trends survey, is produced by Michael Rigby Associates, and sponsored in conjunction with The Installer. The aim is to provide fabricators with key information on current trends and the effectiveness in practice of lead generation methods. Michael Rigby Associates is a management consultancy specialising in fact based marketing, PR, research and performance improvement for the window and home improvement markets. The survey covers a representative sample of 100 retail window fabricators. Telephone interviews took place between the 1st and the 8th September 2003 across a balanced spread of size of firm and geographical area. Numbers employed was used as an indication of company size. The categories are small (1-19 employees), medium (20-49) and large (over 50 employees).
Full report available free: call Kirsten Storgaard on (01453) 521621 or from www.521621.com |
