Know If PPC Advertising Is Right for Your Contracting Business

Is Google Pay Per Click platform a good solution for your contracting business? Find out in this article where we dive into an easy way to see if PPC may be worthwhile!

Pay-per-click (PPC) advertising is ineffective for unfamiliar contractors, especially when they don’t have the proper data to back up their campaigns. With the right analytics and understanding of their target audience, contractors can save money on clicks that will generate long-term benefits or growth. 

So as a whole, it does work, but only if you have the right information. Here are five surefire ways to ensure PPC advertising will work for you:

First, Find Out Your Average Ticket Price

If you have multiple products or services with different prices, you must calculate an average price for all of your products. This average price will represent the average amount of money customers tend to spend on your products. This works much easier if you only sell one product or service.

Instead of guessing, you can use simple math to calculate your average sale price. To do so, take the total value of your sales, say about $1,000,000, and divide it by the number of transactions/products sold, in this case, 54 roofs. This means your average sale price for the quarter and ticket price is $18,518!

Second, Find Out Your Average Profit Margin

You’ve got to know how much you make as a profit on average once you subtract the costs of labour, materials, equipment, and other related costs. Consider the percentage of profit made on each sale, and come up with an average that is more conservative than the highest percentage.

If you need to figure out what the best decision is, it would be beneficial to take the time to calculate the numbers and come to a conclusion. This will help you better understand the business.

  •  Profit – Costs = Average Profit Margin

Third, Find Out Your Sales Closing Rate

Look at the leads you’ve gotten over the past three months. Eliminate any leads sent to you by a client, a partner you already work with, or someone you trust. From the remaining leads, calculate how many ended up becoming customers.

  • Signed Customers / Leads (excluding referrals) = Closing Rate

Fourth, Determine the Average Cost Per Lead

This number can be significantly increased with the help of certain modifications in PPC advertising. These modifications include raising the Google Ads quality scores, altering the bids and positions, discovering new keywords, and increasing the conversion rates of landing pages.

  • Total Marketing Expense / Total New Leads = Average Cost Per Lead

Fifth and Finally, Set a Monthly Budget

To ensure you’re profitable, begin with an amount you’re comfortable with and adjust as you witness results. Eventually, you’ll arrive at a cost per lead that works for your business. This figure will consider the ticket’s average price, profit margins, and sales closing rate. Once this number is established, you can increase your budget if the leads come in at or below this amount.

The Final Say

While PPC advertising can greatly generate leads and grow your business, it requires careful planning and a sound strategy to guarantee ROI. So always calculate your costs and expected returns to ensure you’re getting a positive return. You can increase your ad budget and grow your business if you do that.

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