The Back-End Numbers of Canvassing
I’ve said it before and I’ll say it again, most companies who’ve never canvassed before try to treat canvass leads like any other lead they capture, and you can’t. Most owners know these backend numbers cold for their lead sources. I think it’s important to cover these numbers, especially with the canvass manager. So they understand how this works, most canvass manager’s compensation plan are affected by sales demonstrations (demos) and net business.
Putting The Cart Before The Horse
When I work with a company new to canvassing the first thing I do is have a conversation with the phone room manager and the sales manager. The reason is I want to find out how they’re going to handle the canvass leads. It does no one any good if I can show them how to recruit canvassers and get leads if they’re not going to confirm, issue, demo and close the leads properly. I mention this here because most companies often look at the back-end numbers, they know those, but if the leads aren’t handled properly at this point then these numbers can paint the wrong picture for your canvassing efforts.
Secondly, for the most part, if the aquired lead qualifies the back-end numbers are out of the hands of the canvassing team. There are 4 aspects we’ll look at in this article:
- Confirming/Issuing the lead
- Conducting a Demo on the lead
- Closing the lead
- The Net (fall out from the sale)
Before I go any further understand that the numbers shown here are based on averages. They can change with your product offering, demonstration policy and sales training. For example, the difference in the average sale of a sunroom is significantly more than that of a gutter leaf protection system.
Once a lead is captured and brought back to the office, I recommend a full confirmation be conducted on the lead the day before its scheduled appointment. This is the most common confirmation policy. You want to make sure that both homeowners are going to be present (if that’s your policy) and that they are the actual homeowners, qualify that the product scheduled for the demonstration is a product they have a need for; not just a repair, or the minimum amount of work your company requires; also that they will have sufficient time for the demonstration. This is an opportunity to “smoke out” the serious leads from the time-wasters.
The confirmation is the biggest adjustment for most companies. The percentage of the confirmation to issued canvass leads is usually lower than most lead sources.
The common reasons leads won’t confirm include:
- Cannot get a hold of the homeowner to confirm the appointment
- Spouse-kill (when the second homeowner finds out about the appointment and decides not to have the appointment)
- A stall by the homeowner to put the appointment off until a later date
Issuing The Lead To Conducting The Demo
Once the lead is confirmed it’s handed over to the sales rep for a demonstration. For example purposes, let’s say you issue 10 leads for demo. Once the rep gets to the home there are a percentage of those leads the sale rep won’t be able to demo on. The factors that can cause these leads to fall out at the demo is:
- Both homeowners aren’t present for the demo (on companies that require both be present)
- Lead doesn’t meet the minimum work requirements of your company
- Not enough time to complete the demonstration
- The sales rep never shows up for the demo
Let’s go back to our original expample of the 10 leads that were issued. Of those you can expect 2-3 to fall out before the demo. It’s typical that only 70-80% of the leads issued actually get a demo through a typical confirmation.
At this point there are two numbers that most companies will want to track:
- Leads closed off issue
- Leads closed off demo
It’s important to watch both of these because the percentage difference between them is a clear indicator that the sales rep or confirmer is not handling the lead properly. For example if 10 leads are issued and 70% of them demo and 2 sales are made then your close to issue rate is 20% and your close to demo rate is 28%.
If you see a difference greater than 30% between the closed to issue and closed to demo rate then it’s a clear indicator something is wrong.
It’s likely sales is prequalifying the homeowners before the demo or confirmation is not qualifying the leads properly.
If the appointment qualifies and the homeowners have time for the complete demo, there’s no reason that the sales rep shouldn’t give the demo.
Any good sales rep becomes impervious to the homeowner’s rants about “not doing anything for a year” or any other stall tactic and pushes through the demo to close the sale.
The goal is:
“Every Lead Issued Gets A Demo!”
Another reason you’ll see a percentage increase in separation is when the rep is cherry picking the leads prior to getting to the home. In any event, if you see those numbers differ by more than 30% you need to take action.
From the closed deals you can expect a certain percentage to become Net; that’s to say those deals that fall out after they’re closed. For example, a homeowner who seeks financing but doesn’t qualify, one that pulls out of the contract after they closed, or the project runs up against extenuating circumstances like a regulation issue that would prevent it from moving forward. You can anticipate a 20% fall out rate on those closed deals.
The next scenario is to determine your average sale. You can do this by adding your total gross sales at the end of the month and dividing it by the total number of sales you closed.
$100,000.00 total gross sales / 20 sales = $5,000.00 (your average sales amount)
With respect to profit, you can then determine your net by subtracting your total canvassing expenses, such as payroll, vehicles and fuel, from your gross sales. If your canvassing/marketing costs are 10% or lower then you’re running a profitable canvassing department. Another way to look at your canvassing expenses is to figure out the cost of leads issued.
You would take your total canvassing expenses to the total leads issued and come up with your cost per lead issued.
I highly recommend that you compare these percentages to your other top lead sources.
Most companies will be familiar with the back-end numbers, but they’re always curious about the front-end numbers. As you’ve seen from last month’s article and this month’s the drastic changes don’t occur on the back-end, they happen on the front-end. Next month I’ll wrap the numbers up by tying it all together.