HVAC Marketing Case Study: $18 Profit for Every $1 Spent On Google Ads

Ben Levesque • July 12, 2018

 

 

There are a million and one ways to tackle HVAC marketing.

But if there’s one thing I learned from almost making it as a professional hockey player, it’s that you’re better off focusing on your strengths than trying to do it all.

That’s exactly what we told Max (owner of a family business specializing in residential heating & cooling) when he sat down with our team to discuss his HVAC marketing plan.

We tried to make him realize that his time was better spent servicing customers and building systems than trying to learn the latest and greatest HVAC marketing strategies from scratch.

He finally agreed, and as soon as he handed over the keys to his marketing, it was game time…

Free Download: Get the Contractor PPC Profitability Calculator to see what kind of growth you can achieve with pay per click advertising.

The following HVAC marketing case study walks you through the exact steps we took to grow Max’s business to the point where he now gets an influx of 125 leads per month, at a cost per lead of less than $15, in less than 24 months—with the help of Google pay per click and custom-built landing pages.

If you’re looking for HVAC marketing ideas, or if you’re contemplating whether or not pay per click is an effective growth strategy, then this case study is for you…

1. Setting the foundation

We always kick off our marketing projects the same way, and that’s by establishing what success looks likes.

After chatting with Max about his business, we came up with the following important bits of information:

  • We came to the conclusion that he could take on a maximum of 20 new customers per month to start
  • We estimated that his sales closing rate was 25%
  • We calculated that the most he could afford to pay to acquire a new lead was $500 (based on his average sale price, sales closing rate, and profit margins)
  • We agreed to spend $1,000 per month on ads to start

Recommended reading: If you’re in the same situation as Max and you’re not sure how to come up with the numbers above, read our Pay Per Click for Contractors blog post.

Armed with this information, we were able to establish some targets, along with what success can or should look like within 3 months:

  • In Month 1, our goal was to at least break even by getting leads for less than $500
  • In Month 2, our goal was to chop Month 1’s cost per lead roughly in half
  • In Month 3, our goal was to get enough leads for max within his budget so that he could sign on 20 new customers

It doesn’t always happen exactly as planned (sometimes we lose money the first month, other times we’re profitable right from day 1), but setting targets lets us know where we are today and where we need to be in 3 months.

With success clearly defined, we had all we needed to get started.

2. Auditing the AdWords account

Max, our new HVAC marketing customer, already had an existing Google Ads account from a few months back when he tried to give pay per click a shot on his own.

He mentioned to us that it didn’t go too well, and we saw why as soon as we dug our hands through is account.

He had an okay account structure, but his campaigns and ad groups were way too generalized. This meant his quality scores suffered big time, which resulted in higher click costs and essentially leads that were costing him way too much.

And the worst part is, we didn’t even know this for sure—because he wasn’t even using conversion tracking!

Here’s how we prepared his ad account for launch:

  1. We installed conversion tracking for form submissions and phone calls. Running pay per click ads without accurate tracking is useless (please don’t do this).
  2. We did keyword research and leveraged keywords from our other HVAC customers that we knew would be profitable.
  3. We added in our own negative keyword list that we’ve built up over the years so as to not waste money on useless clicks
  4. We split his account up by territory so that we could modify our bids accordingly once we started to get some data in.
  5. We got specific. Instead of catch-all ad groups like AC, Heating, and HVAC, we opted for ad groups by specific unit type (ex: air conditioning wall unit, central air conditioning, heat pump, etc.)

That last point allowed us to create really specific ad groups, with really specific keywords, and send the traffic to really specific landing pages based on what people were searching for, which allowed us to hit 9 and 10 (out of 10) Quality scores.

impact of quality score

A study done by ClickEquations found that a Quality Score of 10 provided a 30% discount on cost per click over a Quality score of 7! – source

This led to lower cost per clicks, which had a drastic impact on our average cost per lead down the line.

Long story short, there was no way we were going to hit our targets without making the 5 changes above.

Once that was done, we tagged our design team in to start creating custom landing pages.

3. Building custom landing pages

Choosing the right keywords, using compelling offers, and crafting juicy Google Ads is important, but wanna know what’s just as (if not more) important?

WHERE you send the traffic.

Max initially wanted to send the traffic to his website’s homepage.

Here’s what we said to that…

It was for his own good – source

You see, websites are filled with a ton of information.

That’s great when someone isn’t sure what they’re looking for and they need to browse, but for someone that knows what they want—which is the case with pay per click traffic from Google—you best give people what they need right away.

landing pages vs websites

That’s the power of a landing page. You show someone an ad about wall mounted AC units, they click through and see a page all about wall mounted AC units, and social proof (testimonials, reviews, etc.) about a recent purchase of a wall mounted AC unit.

That’s way more powerful than sending people to a general web page.

Now, I know what you’re thinking…

“But we’ve got a page on our website for each specific product. Won’t that work?”

It might, but it probably won’t.

Landing pages are a more tailored experience for the user, and they lead to higher conversion rates because we’re able to rapidly test different page variations against each other to see which perform better.

Landing pages = higher conversion rates = more leads = lower average cost per lead = a better HVAC marketing plan.

You want that, don’t you?

Max did.

So we built landing pages, and then launched his Google ads to flood them with targeted traffic.

But that was just the beginning…

4. Ongoing optimization

When it comes to driving leads with pay per click, many people stop once the campaigns are live and hope for the best.

Optimization is where the magic happens, and it’s how you turn mediocre pay per click results into ‘holy shit this really works‘ kind of results.

It’s about improving everything.

improving hvac marketing results

With a few days of campaign data under our belts, we noticed Max was getting a lot of leads from people looking for maintenance & repair services.

We regrouped with Max and decided to go all-in on new installations rather than service calls because that’s where his profit margins were highest:

  • We revised his negative keyword list to add in some maintenance & repair-related keywords that were costing him money
  • We tweaked ad text to make it clear he didn’t offer maintenance & repair services
  • We modified the text on his landing pages to make it apparent that his focus was on new units & installs

These 3 changes boosted results almost overnight, and Max started getting more of what we like to call ‘good fit’ leads—leads that turned into profitable new installation jobs for his HVAC business.

Pro tip: Even if you offer many different services, you’re better off focusing your ad budget on high-profit margin services. Choosing to market a service with slim profit margins when starting out is a recipe for PPC failure.

We also kept adding new keywords every month, killing off ads with low clickthrough rates, and kept testing landing page variations against each other to find out which converted best.

This is an ongoing process, which is why it takes at least 3 months before an HVAC marketing plan driven by pay per click hits full steam (leads come in as soon as you start, but the best results happen at the 3+ month mark).

5. Striking when the iron is hot (literally)

At this point, Max was already seeing a solid return on his investment (roughly $9 for every $1 spent).

But then things got even better…

Max’s business was blessed with a heat wave, and inquiries for new AC units nearly tripled overnight (it doesn’t take an HVAC expert to know that warm weather can drastically boost your HVAC marketing results!).

 

Seeing an opportunity, and knowing that the heat was here to stay for the Summer, we doubled-down on all of his AC-related campaigns:

  • We increased bids on all important keywords so that Max showed up first as often as possible
  • We shifted budget from less performing campaigns to his moneymakers
  • We tweaked his ads and landing pages to mention a special ‘heatwave’ offer—even though it was the same promotion as usual, conversion rates skyrocketed because it was more relevant and timely.

We wouldn’t have been able to take advantage of the warm weather if we hadn’t re-structured his Google Ads account and created unique landing pages for his AC-related products.

Pro tip: Some contractors see seasonality as a bad thing, but it can be a good thing if you’re prepared. With proper bidding and budget management, you can dominate your local area during your peak season and take on as much new business as you can handle.

Speaking of success, here’s Max’s situation a little less than two years after working with our team.

The Results: HVAC Marketing Case Study

Being that Max was committed to growing his business, he had no issues sharing revenue figures with us each time he booked a new job.

This made proving Max’s return on investment very simple, and as long as Max kept his lead sheet up to date (an excel document for sharing revenue figures tied to new leads), we’d know exactly how much he was earning for every dollar spent in marketing.

Here are the numbers:

  • In Month 1, we generated 7 leads at a cost per lead of $83
  • In Month 2, we generated 25 leads at a cost per lead of $33
  • In Month 3, we hit our cost per lead goal of $30
  • After 12 months, we had generated a total of 375 leads, and based on Max’s revenue figures, he earned $13.24 profit for every $1 spent (after media budget and our agency fees).
  • Today, 24 months later, Max is now getting an average of 125 leads per month for under $15 each and is earning roughly $18.38 profit for every $1 spent (after media budget and our agency fees)

Here’s what June 2018 looked like for Max:

hvac marketing case study stats

Because of the success of his HVAC marketing plan, Max had to purchase more trucks and hire more people in order to keep up with demand.

He’s excited to kick things up a notch moving forward, and we’ll be increasing his monthly media budget so that we can start investing in other marketing channels like Facebook ads, Instagram ads, and Google Display ads.

NOTE: Want to learn how you can get similar results and grow your HVAC business? Book a free demo of our contractor marketing system and we’ll show you exactly how it works so that you can decide if it’s for you.

HVAC marketing plan

Ben is our Facebook Ads Specialist and is responsible for generating thousands of quality leads for our customers in the replacement & remodeling industries. When he’s not busy launching new campaigns, he squeezes in time to write helpful posts on the Webrunner blog.