1) Value of Recurring Clean

What is the value of a new recurring clean customers? There are several ways of valuing new client acquisitions. You might value them according to an alternative acquisition cost metric. For example if you are presently paying a leads generation service $30 per lead, and you are converting half of those, then you might consider $60 to be the appropriate acquisition costs for your company. Consider quality. Maybe the clients from such a company are shabby bargain hunter types. Then maybe you'd be willing to pay a 50% premium for a better client, so then $90 would be the appropriate client acquisition cost for you. My favorite method of valuing new clients is the amount I would be willing to purchase them for at a bargain price of two month's revenue if I were buying them from a failed competitor. I think of it like this: 8 wks = 4 cleans (assume std every 2wk client) X average clean price of $120 = $500. Then I kind of dumb this number down some for a new client flake factor to arrive at something like $200 as being my target price for acquiring new recurring assignments.

2) Value of Initial Clean

What is the value of winning a one-time client (not a recurring client)? his depends on your pricing policy for initial cleans. Our philosophy was always to price initial cleans at break even. We would attack a house for the first time with an army, make it as clean as it could be, win a friendly client forever, and this is one of the reasons we were able to grow a $2 million company in seven years. So for us, the value of an initial clean was zero at best. If you price initial cleans on a per hour basis, then you might place a positive value on a one-off initial clean job.

3) Targeted Return on Ad Spending

Running Adwords involves some risk. What if you spend $100 tomorrow and nobody calls? Adwords for House Cleaning is supposed to be a slam dunk. If so, then I would like to earn a return on my ad spending investment dollars, aside from buying a customer for market rates.

4) Online Conversion Rate

what percent of clicks from Adwords complete your online form (you don't have a form?? Tsk, tsk!!). Keep in mind that this statistic only captures online conversions, not form conversions. You can get this number from Adwords, if you use conversion tracking.

5) Ratio of phone calls to form inquiries

How do customers contact you, once they reach your website? If you have a form on your site, then what is the ratio of those customers who use the form vs those who pick up the phone and call you? Our experience is that it's about a one-to-one ratio, with half of the customers using the form, and half just phoning us up directly. You can track this number if you are careful to ask each prospect how they heard about you. Some larger companies use a service for tracking the source of inbound phone calls. While we recommend this for some customers (like attorneys who are paying thousands for a new client), we do not recommend using such services for house cleaning companies.

6) Web inquiry to IC Conversion Rate

Of those customers who contact you from your website, what percent of them will you convince to give you a try? Generally, if we speak to a serious client, then we can convince them to hire us for an initial clean. However, if we fail to respond to prospects immediately, then they just keep contacting companies until they book a clean with someone. We plugged a rate of 66% here, just to be conservative. If you're quickest in your market at replying to prospects, then your conversion rate for Inquiry to IC may be better than this.

7) IC to RC Conversion Rate

When you undertake an Initial Clean, what are your chances of converting that initial clean to a regular recurring assignment? We would like to think our chances are about 75%, but we plugged 60% into the calculation, just to be conservative. Included in this conversion rate is a fudge factor for retention. If you can't retain a new customer for four to eight consecutive cleans, then you should reduce this conversion rate to reflect a lower retention. For more about this subject, read HCA articles referring to "How to Grow a House Cleaning Company.How Much Can You Afford to Pay Per Click? If you've answered the questions above, then this number is the result. You don't need to use the HCA CPC Calculator if you understand this formula.

Happy hunting . . .
For additional information about this topic, you can phone us at 303 975 2810. If you've read this article and still haven't a clue about what it all means, then you probably shouldn't be managing your own Adwords account. Even if you understand the above, you might consider hiring us to manage your Adwords for you anyway, since we are pretty efficient at it. To learn more about the service,phone us at 303 975 2810 or see Internet Marketing.