How does a "roofing company" growth hacker generate $240,000 from a $7,000 marketing investment?
This week on The Inbound Success Podcast, roofing company marketing expert Adam Sand shares the marketing campaign formula he uses to regularly generate 3300% return on investment for his clients.
A roofing business owner himself, Adam has parlayed his success marketing his own business into a new career helping other roofing companies to use digital marketing and direct mail to grow their businesses.
Over time, Adam has refined an approach to combining Facebook ads, video marketing and direct mail into a proven formula for lead generation that works for any industry - not just roofing.
This week's episode of The Inbound Success Podcast is brought to you by our sponsor, IMPACT Live, the most immersive and high energy learning experience for marketers and business leaders. IMPACT Live takes place August 6-7, 2019 in Hartford Connecticut and is headlined by Marcus Sheridan along with special guests including world-renowned Facebook marketing expert Mari Smith and Drift CEO and Co-Founder David Cancel. Inbound Success Podcast listeners can save 10% off the price of tickets with the code "SUCCESS".
Some highlights from my conversation with Adam include:
Adam joined his friend's roofing business and used Facebook ads to grow the company's revenue. He was so successful at it that he began to get other roofers asking him for help with their own Facebook ad campaigns. From there, his business advising roofing companies on growth was born.
While Adam's business is focused on helping roofers grow their companies, nothing that he does is specific to the roofing business (and therefore is entirely applicable to other types of companies looking to grow their revenue).
Adam and his business partner have built a custom pixel that allows them to track website visitors and then enrich that data with the anonymous visitor's name, mailing address, and email address.
They use this data to build a simple, three-step funnel that incorporates Facebook ads to drive top-of-the-funnel traffic, direct mail retargeting, and then a bottom-of-the-funnel offer.
The campaign starts with a series of three educational videos that Adam boosts using Facebook ads.
Anyone who watches one of the first three videos is considered to be a qualified lead and then retargeted with a fourth video that is more bottom-of-the-funnel and offers them a free upgrade (such as a vent) with the purchase of a new roof.
Adam then uses his custom Dope 360 pixel to identify the visitors that have clicked through to get more information on the free upgrade offer and sends them a targeted direct mail postcard.
By adding the postcard into the campaign, Adam and his partner are getting a 15% to 70% increase in their conversion rates.
One way they measure ROI is by using call tracking software.
The way Adam has set up the Dope 360 platform allows the user to log in every morning and see the visitors that have come to their site on the prior day, along with their enriched contact information, and then simply hit a button and have the postcard sent to them. Importantly, mailing and fulfillment is included in the platform and there are not minimum order quantities.
This approach has enabled Adam to lower the cost per lead for roofers from $150 to $70.
The ROI is also astronomical on these campaigns. Adam estimates that a typical campaign costs around $7000 and generates approximately $240,000 in revenue (this is a 3300% ROI).
Resources from this episode:
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I'm Kathleen Booth and I'm your host, and today my guest is Adam Sand, who is best described as a roofing company growth hacker. Never heard that title before, can't wait to dig into it. Welcome, Adam.
Adam Sand (Guest): Thank you so much. I appreciate the opportunity to come on the show, and kind of see what I can offer the audience. I've looked into a bit of your episodes, and it looks like you have quite the advanced group of people and I'd love to contribute what I can and see if there's anything that might be taken away from it.
Adam and Kathleen recording this episode
Kathleen: Yeah, you know, what's fun for me about doing this podcast is obviously I get to talk to a different person each week because I'm interviewing somebody, but what I think is so much fun is some of them are like marketing luminaries, at least to me, people that I've looked up to and then I have the opportunity to speak with. And some are people I've never heard of, who are doing just amazing work. And I meet them and I interview them and I think, oh my gosh, how is this person not a luminary or are they a luminary in the making? And some of the most interesting conversations have been with people who are not marketers by trade or by training.
They come into it and they're very intuitive. They're voracious learners, and sometimes they're the best at marketing because they understand the customer the best.
So I was really intrigued when I saw your profile because you have this background in roofing, like literally companies that put new roofs on your house, and you've had tremendous success with that and now you're helping other roofers. You've become something of a marketing expert outside of roofing all together, so I can't wait to hear more about it.
But to start with, because you do have such an interesting background, I would love it if you could tell my listeners your story, and how you became to be the roofing company growth hacker.
About Adam Sand
Adam: Well, it's a very odd, and everything I've done, I call it the accidental career. Everything has come down from just a series of well-positioned accidents.
I owned a business before that had nothing to do with construction. I recognized an opportunity in that business that was basically in the app world. This was way back when apps were brand new and they were kind of a hot thing, and nobody was quite sure what to make of them. And what I found was when I closed this tanning business ... I had a couple of tanning salons, I sold them off, and I was no longer involved in it, I went in and I was like, you know what I want to do? I don't want to deal with people anymore.
I wanted to make an app. I wanted part of the app millionaire gold rush, right? And so I made an app for other tanning salon owners who had a challenge of taking phone calls and trying to run the business at the same time. You either had to pay for an extra person, or you had to literally duck out of a sale to go take an appointment. And I thought man, wouldn't it be nice if people could just book an appointment on their phone? Which today is such a duh thing, but back then I literally was trying to convince tanning salon owners that this would be a good idea.
And so I really dove into a different kind of business, like something totally outside of what I was doing before, you know, retail, service-based stuff. And I really kind of saw the power of technology and I spoke with a lot of tanning salon owners on Facebook, and so I really started to see and believe in the power of social media by trying to promote this app.
We ended up doing fairly well with it. I made the app, I sold it to a large franchise, and then they ended up and eventually turned it into an app that many people know and use today. Part of my code is still lingering around inside that app somewhere, and they've turned it into a thing that they could use to then book for all their people, and that kind of moved into everything and all tanning salons.
So from there I made some money, and my best friend, who he was about to have his second baby, he was not enjoying the company he worked for. The roofing company that he was at sold, so his bosses sold the company, and they made a bunch of money off of it, which intrigued me.
He went to go start his own roofing business after a while, because he didn't really like working for the new guy, because the new guy didn't know anything. So when him and I talked, I said, "You know, you're not really running a business." He was just subcontracting. A big company would sell the roof, and then he'd come do the work.
I was like, "You don't really own a business. You're just an employee that pays taxes differently." And so that's when I said, "How much did those guys sell that company for?" And he told me and I was like, I can live with that kind of exit strategy. So I said, "Let's do this together."
I jumped in, and we were doing a lot of the stuff that was conventional. Facebook was not ... like it had the ads on the sidebar, that was it. There were no Facebook ads as it exists today. But everyone was talking about Crackbook, they called it Crackbook, and I had seen the power of it in communicating and connecting with people on social media.
We hired the Google Ad Agency and all that, and I was like our account manager comes in, "Hey, can you run Facebook ads for us? I really think this would be a really good place to promote?"
And they were like, "No, stupid, you don't sell roofing on Facebook. Roofs are how much?" I was like, "I don't know, six, 10, 40000 dollars." He was like, "Yeah, you don't have a buy now button for a roof. You need to track conversions. You need a buy now button."
And then they were like, "And what's your lead magnet going to be?" And I was like, "What's a lead magnet?" Like if you're a dentist you give away a free tooth whitening and then you'd convince them to be full time clients. Or it's like, you gave away a free guide on how to lose weight, and then you sell online personal training or a fitness book or something. He was like, "That's what you use Facebook for, dummy." And I was like, "Okay."
So then I fired them, and went to try and hire another company. They said they would, and then when it came push to shove, they wouldn't do it.
I spent eight months trying to hire a Facebook ad marketer. And nowadays you can't throw a shingle off a roof without hitting 13 people with a ClickFunnels degree that are promising riches from leads from marketing on Facebook. But back then it didn't exist.
Eventually I decided I would learn myself. There was nobody who could tell me exactly what to do, but one instructor online who ran one of those online courses, he said, "Hey, you know, you're right, I can't tell you how to do it, but I can tell you how to test and how to run assumptions and how to operate Facebook."
And just then, the news feed ads started to come out, and he said, "And this is a great time to get into it." And so I went about learning, and when you learn, you spend a bunch of money losing and failing, but then eventually we had some massive success.
Now sharing that success in the group as I went, just kind of like ... they had a little private Facebook group for all the students, like all these online course people have, and as I was sharing ... and then all of a sudden we had our big hit, he was like, "Hey, you know, we should get you on the podcast." And he did, and this is where the accidental career thing comes in.
Because the minute I did that, all these other people, the other marketing guys, were like, "Hey, I want to try and make lots of money selling roofers Facebook ad marketing." Or it was like, "Hey, I own a roofing company, can you help me?" I was kind of flattered at first, and trying to just answer people's questions for free, and eventually it got so ... it was like another podcast interviewed me and then another podcast interviewed me.
And next thing you know, I so busy I was like, I should charge money for this. Not like neglecting my other business to answer these people that flatter me with this hey, can you help me thing.
And that blew up, and the next thing you know, it was like okay, fine, I'll run Facebook ads for you, 1500 bucks a month. And then there were others ... it was like, oh I don't have time, $5000 month, he won't say yes to that. And he says yes. Okay, $7000 a month. Okay, yeah, and I'm like holy smokes.
Kathleen: There's a business in that.
Adam: Yeah, and then I started to feel bad because some people obviously couldn't afford that and I know how hard working roofers are, because this is a trade that is not easy. It's a tough, tough job, and there are a lot of smaller companies that deserve to have success as much as the big ones.
And so I said, "Okay, well can't I just put all these lessons into something?" I mean, now we've hired teachers to actually create pedagogical learning so that we could actually ... Because, I mean, roofers are not easy to teach marketing to. So I hired people with education degrees to help me teach them, like, "Hey, you teach children? Perfect, that's exactly what I need to teach people my marketing."
And so we brought him on to help me create these courses. He was sort of like, "Hey, you know, I know you can't afford to hire me, but here, pay this 500 bucks a month and you can learn to do it yourself." It's exactly what I do in my roofing company and for a lot of these clients it helped.
And that's where this roofing company growth hacker kind of started. Then when it became ... all these roofing companies started having problems with having too much business, I found out that companies, even $10, $15 million dollar roofing companies, they've got technological problems. They're still stuck 10 years back behind the rest of us. I mean, they're using triplicate paper, they're using old systems, they're still using dot matrix printers.
So when they all of a sudden had too much business and wanted to fire the marketing guy because they don't need any more leads, it was either get fired or fix their problems. So I was like, "What's the problem you're having?" Too much business, we're not calling people back, and leads are leaving bad Google reviews. And I was like, "Okay, well I can fix that. I can fix that." Next thing you know, I became a CRM consultant, is what you call yourself now. And so with all the different stupid things that I do, for lack of a better word, growth hacker was the term that kind of seemed like it made the most sense.
Now it's like this cliché thing. But yeah, it's essentially helping roofing companies run their businesses a lot more like how we do run our businesses online, using things like Slack and Trello and project management, and thinking about things in terms of how do we scale and optimize and automate our businesses so that selling a roof is just like selling something through a funnel. That's all it is, it's just half the funnel exists out there in the real world on houses.
Kathleen: Yeah, and I love ... it seems like the real common theme underneath a lot of this is that you love to sink your teeth into a business problem and figure out a way to use technology and automation to solve it, and that was kind of one of the reasons I was excited to talk to you because when you and I first connected I felt like there were so many different topics we could cover in this interview. We could talk about your approach to Facebook ads, we could ... there are plenty of things we could do.
Adam's Approach to Combining Direct Mail With Digital Marketing
Kathleen: But what I thought was really interesting was how you strung together different elements of a marketing approach involving things like Facebook ads, but then also offline things, like a postcard, and a company's CRM and their back end data, in order to put together a 360 degree marketing campaign that really touches ... has those touch points with the customer in so many different ways. And it was very effective. So I'm excited to talk about that and dig into it a little bit.
Adam: Yeah, and I thought that would be really good because the audience that ... from what I've seen from your other guests, is that this is not Basics 123 here, have you heard about the Facebook pixel-type audience. I mean, this is an audience of people who are looking for an edge, who are looking to be more competitive with their agencies, or to try and find ways to actually perform better for their clients, and kind of have those disproportionate results that maybe Facebook is feeling for a lot of people, has lost is luster. Because it used to be, oh yeah, do an image ad and anybody who engages with that ad, re-target them.
Or like anybody who visits your website, just re-target them with an opportunity to purchase it again for 10% off. And that used to work like cookies, it was so simple. And we look at it now, it's kind of losing a little bit of its effectiveness, you need a little bit more strategy.
And I love what you said at the beginning about knowing your customer, and beginning with the end in mind, how really knowing that buyer's journey. That is something that's so heavy in what I do, because with ... I mean, the construction industry, the home services industry, margins are huge, right? It's a business that not a lot of people want to do.
Everybody wants to be a Gary V nowadays, they don't want to be a Bryan Bauemler or a Bob Vila or a Mike Holmes. They want to be like Gary V or Tim Ferriss.
So there's not a lot of people that want to do construction, so the work requires a good margin to make it worth it. And so the business, from a marketer's perspective, I mean, I'd rather be a marketer for the construction business than join the cult of chiropractic dentists, that whole side. Or, getting into the whole online marketing, selling, e-commerce construction is a very underserved, hugely profitable marketing industry, or I guess an industry for marketing to pursue.
And so for us it was how do we continue to maintain an edge and kind of perform in ways that roofing companies or construction companies or home services companies understood? And one thing that they really understand, and they already see value in, is direct mail and lawn science, right? Like these kinds of real life touch things that there's a tangible to it. And if you explain to a roofing company that you're going to send somebody a postcard, they're in. If you explain to a roofing company that anybody who hits their website you're going to re-target them with a digital postcard inside of Facebook, they get confused.
But when you show them that they're one and the same thing, essentially, where you can ad extra media, extra education, and you can reach people at scale for pennies, like you literally can't throw flyers out your window for as cheap as you can get video views on Facebook. Well, then they start to understand.
And as Facebook is starting to remove targeting options, most specifically home ownership, and then they did take away income for awhile, and now we know we've brought it back, but home ownership still doesn't exist.
Now, Facebook doesn't want you to not be successful with your Facebook ads. They just don't want to make it so that any one month graduate of an online marketing course by some 19 year old influencer is now suddenly able to target Hispanic homeowners for high interest mortgages. They don't want Facebook to be used in ways that land them in the Senate hearings.
Kathleen: Right, which is ... they're fighting an uphill battle, but they're working on it.
And I should note, before we get too deeply ... Even though what you do is specific to roofing, it is totally applicable to so many different industries. Like there's nothing so particular about this, other than probably you're targeting options in Facebook, that is specific to roofing. So if you're listening and you're not in the roofing industry, don't jump off, this is relevant to everybody.
Adam: Oh, absolutely. If you want to target people who like ... I mean, at the end of the day, this is all about targeting ... just allowing yourself to have every option. It's just about making sure you have choices.
Because Facebook wants to be successful, they just don't ... they almost just want to make it a little bit like you have to be kind of advanced, or you have to kind of invest in your business a little bit. The barrier to entry is just getting a little bit higher because you can't just ... They just don't want it so that these people can continuously ruin everything. It's like Seth Godin says, marketers ruin everything.
Adam: And so what we've found is that Facebook used to share and enable us to buy ... Or not buy, but they used to enable us to target data from Epsilon and Acxiom and all these other third party data providers, but then that allowed us to target things like Hispanic homeowners, stuff like that that was something that was a problem, especially in the finance industry. So then they had to remove that level of targeting.
Does not mean that we cannot still access that information when somebody hits our website, it doesn't mean that that information isn't still existing in that transaction of someone coming to a website.
And so what we tried doing is plugging into ... Me and an affiliate of mine, we decided we would try to plug in to that data still by creating our own pixel, so that we could continue to use our content marketing campaigns where we educate people on process, the people and the product of our home services companies ... because he owns another home services business and has a marketing agency as well.
But to continue to market our people, our process and our products, and then re-target the people who engage with those videos with another video talking about a very specific product and then offering a free upgrade to that product.
Very simple, three-stage funnel, nothing fancy. Works awesome, but we wanted to increase the effectiveness of that, and also improve the targeting of it.
And so with this pixel, what we found is that we were able to then still get the information, and then we can append that internet user data against the same data brokers that Facebook used to allow us to target from, Axiom, Epsilon, etc, etc, and when we run that internet user data against that waterfall, we could then, 24 hours later, have name, email and home address.
Kathleen: So let's back up for one second, because I want to make sure everyone understands exactly what we're talking about. So if you're a marketer, you're probably familiar with the concept of Facebook advertising and the notion that if you have an ad account with Facebook, you have a pixel, which is that little snippet of code that you put on your site that allows Facebook-
... Which is that little snippet of code that you put on your site that allows Facebook to feed ads to people that have been on your website. You said you built your own pixel. Is this something that is used in tandem with the Facebook pixel, or instead of it?
Adam: No, we still use the Facebook pixel because there's still a thousand other things that we can't do with ours. All this did was allow us to submit that information to our data provider and say anybody who hits this website, we want to know who they are so that we can then re-target them with a direct mail campaign if we want, or online marketing if we want.
Driving Qualified Website Traffic
Kathleen: Great, and so is there a part of this campaign that starts off the website? Are you using Facebook ads to drive people to the website first?
Adam: Absolutely. This is a campaign that I run for my clients all the time. I coin it a 30 day roof booster. Essentially it's where you run three videos that are purely educational, not salesy, they're just content. It's to talk about the people or something about the company that makes them good, the process, video, something about the roofing process that helps customers understand. Product video, something talking about the product. We do some other ones, thought reversal.
Kathleen: The very top of the funnel.
Adam: Yeah, very top of funnel stuff, just to basically build audience. Then we offer a free upgrade to some products. We talk about is when we record a fourth video. Three videos acquire audience. The second level, fourth video, and I script these videos for clients to kind of show them, this is how the videos work. I run it in all these markets. Just basically record yourself talking like this and be an expert in the industry and it will work.
The fourth video is talking about a product. We could talk about, in roofing, you talk about roof vents. In decks, you talk about those little light caps. In home, like washing your house, you talk about washing windows and how it's a great time to do it. There's something for literally every home services business. If you're talking about snow shoveling, talk about clearing the deck. There's something for every home services business. You're doing a basement, add in a smart home device. It works everywhere.
The fourth video is about a product, some kind of upgrade to the base level of service. Instead of talking about discounts, you're talking about upgrades and then giving away free upgrades, because you can usually price condition the value of an upgrade beyond the price of its actual product. A good example in the roofing industry is vents. Vents cost $250, but the value of having adequate ventilation on a house is thousands of dollars of either air conditioning bills saved over 25 years of the life of your roof, up to damages caused by humidity and condensation wrecking your house.
The value of a vent, when you educate them first, is thousands. The price to give it to them for free is hundreds. If you just say right out of the gate, "Hey, I'll give you free vents if you buy a roof," they're going to go, "Well, how much is a vent? $200? That's not that good of a deal."
But if you say, "Hey, these are vents. They're awesome. They save you thousands of dollars on your air conditioning bills over the life of your roof, plus they're going to prevent any kinds of damage from humidity and condensation. You know, these are really good things. You should know about those if you're ever planning on doing your house, wink wink."
Then a week later when they see an ad for free vents if you get a roof done, they're going to go, "Holy smokes, are those vents? Those are awesome. We go to make sure we have those vents." This is how that answered that lead magnet question a few years later after getting made fun of by these guys.
We're teaching first and selling second. You have to first educate people so they felt empowered to make a decision about something that otherwise, it's not sexy. They're not interested in roofing. They love having clean teeth. They love losing weight. They love a new car. Roofing is something you do when you have to. You never replace your roof 10 years early just because.
Kathleen: The videos really drove people, and the upgrade offer was what drove people to the website.
Adam: Right. So now, anybody who watches video four, so you're re-targeting the three videos audience. Anybody who watched those videos, engaged with one of those one to three videos, they've self-identified as homeowners.
So now, because who watches a video about roofing if they're not interested in roofing in the near future? Not renters. Not people who are 10 years away from needing to replace a roof. If they're going to watch a four minute video about a roof when they could watch a Trump video or a cat video or whatever, they're self-identifying as people who might be interested in roofing and obviously homeowners, so then they're re-targeted with video four to make sure they have the knowledge to value the free upgrade offer that we're going to re-target them with. Then we re-target them with that offer.
Now, anybody who lands on that page, we're then able to have their name and address and email address just from having landed on the page by running it against that waterfall, provided by data providers.
Now, 24 hours later within this dashboard, we just send them a postcard with that offer, free vents. Now in addition to targeting them in real life, we're also doing it on ...
Sorry, I guess I should say in addition to targeting them on Facebook, like is conventional, like we're all used to, we added that online thing, and now that, our statuses, I mean, we're matching people 30% to 60%, people who hit that site. We're getting 30% to 60% of them getting their name, address, phone number and email.
Kathleen: Based on their IP address?
Adam: There's a few different things. It's a bit of a proprietary thing, but there's a few different things that we use to do this. It's all legal and it's all Facebook terms of service legal and everything like that, but obviously you don't want to give away the secret sauce. There's going to be at least one really, really smart person out there listening to this podcast who I don't want them to figure it out just yet. I just got the numbers back this morning. We're getting, at the bottom, a 15% bump over running it without, up to 70% bump in conversions running this bump.
Kathleen: Sorry, clarify that. You're getting the bump from running the campaign with the postcards?
Adam: Yeah. Let's say we're running the ad in Halton, Burlington and Oakville in Ontario, right?
Kathleen: Because you are from Canada, if somebody has not already picked that up by his Canadian accent, which I love.
Adam: Say we're running ads there, or we've also ran this exact campaign in Minnesota. If we run this exact campaign to three cities, very similar income levels, very similar everything, similar home ages. All the demographics are the same. We run this 30 day roof booster as I've done it conventionally, and then we run that same 30 day roof booster in a neighborhood 30 kilometers away where it's very similar. 17 miles away, where everything about it is very similar, but you add in that re-targeting with the direct mail that's just automated.
We have no minimum orders. That's the thing. Data providers are now allowing people to build stuff like this and buy this information and access this data without having to order a list of 10,000 people. You can then append this data in a small amount.
Kathleen: You described it to me, just to be clear, you described it to me as literally everyone's traffic flow to their website is different. If I'm using this on my website, I might wake up tomorrow morning and have 10 people in my dashboard with their name, email and their address, and I could just push a button and have a postcard sent to them, or if I'm some other business who gets more traffic, I might wake up and have 150. It really doesn't matter. The point is whatever that number is from yesterday is the number that I get, no minimums, no maximums, and I can just automatically send them a postcard.
Adam: Exactly. The next day you just say, "Here. These are the 17 people that we were able to match or the 1,700 people that we were able to match. We've uploaded your design, your front and back of your seven by eight postcard, or seven by ten or whatever your postcard size is. You just pick the names you want to do or select all. Boom. Send. It's going to be, hi, Adam Sand. Here's your free offer. Here's a thing. Call us now. You got your own call.
We have our own call tracking numbers. Make it so that we can do attribution and all those things so we can actually test this, because this has all been one big, giant test for the last four months. With that, we've been getting on the low end 15%, on the high end, 70% bumps.
Kathleen: 70? Seven zero?
Adam: Seven zero. Now, those are extreme cases with really good offers. These are not save 10% kind of monkey, rinky dinky offers. These are real, tangible offers where everything went right. That's a video that I did where we really talk about the value of the roof upgrade, and I'm really good at these roof upgrade videos after doing so many of them, that when I produce the kind of content that I'm used to producing, we can really make it so people really value those vents.
When people really value the vents because we did a kickass job at audience generation with the level one videos, and we did a kickass value build video where people really understand and appreciate the value, and then on top of that we then have a good ad running people to that page, yes, then you get the 70%.
But when everything is kind of amateur and you're dealing with a client who's never recorded videos before, or they're very amateur at it, then you're getting the low end, the 15%, just by proxy. Just by the fact that you're hitting them again. And it's extremely, extremely cheap.
Kathleen: Is that 15% more people that contract and purchase their roof, or is that 15% more people who say, "Come out, I want a quote from you?"
Adam: 15% more people that say, "Come out, I want a quote from you."
Kathleen: But with the cost of a single new roof sale, the ROI, I have to imagine, is astronomical on that.
Adam: Basically, as long as you're not a complete moron in the construction industry and you have a half decent business, yeah. Your closing ratio should be 30% and you can pay $150, $200 a lead regularly every day. Actually, this is a real thing. Home Advisor charges $150 to send you a lead, and every time, you're one of three.
Kathleen: Yeah. I was going to say I bought a new roof last year so I do know how much that costs and what that means to the company. It's a lot of money.
Adam: Yeah. You're looking at 20%, 30% margins because there's a lot of stuff that goes wrong. On a per job basis, you need 25%, 20%, 30%. Some things even more, like air conditioning is big. Flat roofs are even more. There's a lot of things-
Kathleen: Yeah. I have a flat roof up top on part of my house. This is giving me bad memories of the check I had to write from last year.
Adam: But occasionally, those guys putting on a flat roof, some kid leaves a torch on the ground. Burns the whole building down, and now their insurance goes up $10,000 here. There's a reason for those margins. If you're running a good business and have half decent salespeople, I mean, on a pure margin basis, I mean, construction and home services businesses are regularly conditioned to paying $150 to $250 a lead. Not a sale, a lead, and those aren't even always exclusive.
Agency partners like myself who have some experience with their business can deliver leads for $70, $17 or something like, you know, something in that range. Then all of a sudden things get a lot better, especially when it's coupled with inbound marketing strategies, such as using content to create value in the product, and not just being, "Hey, we do this and here's 10% off." That's weak, right?
The Dope 360 Pixel
Kathleen: Yeah. Let's back up and talk about kind of the mechanics of this.
I think lots of my listeners are probably familiar with and have done Facebook advertising. They're familiar with using video to do it. They get the concept of creating top of the funnel videos, driving people back to your site, having an upgrade offer.
Where it gets more complicated is this notion of the pixel that you're talking about. When you and I talked, I was saying to you, my big goal from the podcast is for people to feel like they can walk away and do some of the stuff themselves.
When we were talking and you first told me this story, I was like, I don't know if this is good, because are people going to be able to do this? But you actually have commercialized this pixel.
Talk a little bit more about that, and the fact that somebody doesn't have to know how to build this in order to do it.
Adam: Yes, absolutely. Essentially this social enhancement program that me and Dope 360 is the pixel that we're calling it, have created this dashboard and commercialized this so you can put the Dope 360 pixel on there.
The whole fleet of stuff that we're doing that we've done that just, we couldn't even get into this podcast about. There's some stuff in there that two years from now, it's probably going to get ruined, because the success rates will be ... We were talking about that in the original call. The disproportionate success with some of the stuff that we're doing with this is going to eventually get reeled back, but right now everything is Facebook terms of service legal. We've created this pixel and allowed people to append this data and put this on their site and get into this dashboard.
We're allowed to take this information. Then the fact that users voluntarily share this information with us means that you can then create a custom audience of these people who visit your website. You've got their name, their email, their home address. You've got this information. This is essentially an offline event set.
Kathleen: You built the pixel, but what you're essentially providing to the user, does that include then the dashboard that delivers the addresses?
Adam: Mm-hmm (affirmative). Absolutely.
Kathleen: You talked about how you have a fulfillment house that's willing to do small batch orders. Is that included, the mailing?
Adam: Mm-hmm (affirmative). Absolutely. When you get into the dashboard, and obviously we're rolling this out. We've been rolling this out gently to some people that we know, or to big franchises who wanted to run tests. We're slowly rolling this out to some agency partners, but essentially right now today, if I was talking to the right kind of agency, it's like, yeah, yeah. Free access to the dashboard. Put these pixels on your clients' website, and then you just pay for the fulfillment. You get the data for pennies. We're talking five to 15 cents per hit. You're talking nothing as far as running it against that waterfall. Five to 15 pennies and you're getting an enormous amount of data on the customer. Then the fulfillment, again, you're talking pennies. Nothing is a dollar. We're talking pennies. Some of the printing, some of the printing-
Kathleen: Right, but you're going to have that regardless if you're doing postcards.
Adam: Exactly. The pixel is free right now. If the right person is around, the dashboard is free. The data costs pennies, and the printing and fulfillment, the mail and delivery targeting is pennies, because again, nobody is doing this yet. All these companies that offer ...
This information is available to Ford. It's available to IBM. These people have, they have the ability to directly partner with Axiom and Epsilon and all these other huge data providers.
Right now the little guy doesn't have access to it. This is our way of getting access to it ourselves. We've built it for ourselves. Then essentially we're rebuilding the investment and the time and the testing and the energy by eventually rolling this out to US agency partners or to US clients.
It's been a very, very cool journey, but I have to say that now that the consumer market is kind of used to being re-targeted online, they're getting, I guess, maybe slightly desensitized to it, but the psychology still works.
It's just I guess the competition for re-targeting is just gone up, so the cost of getting ad performance has gone up, but because of the success of digital marketing, the cost of print and direct mail and all that kind of stuff has gone way, way, way down. The competition is way, way, way down. The number of junk mail you get is way, way, way down.
When you can combine the timing, the personalization, the relevance of online digital marketing such as Facebook by re-targeting them with an offer based on some content that they've seen, which you can't do with direct mail right now. You just kind of say, "Yeah, give everybody in this postal code this offer and see if it works."
Now you can say, "Send the person who watched this video and this video and went to this page, send them this postcard for this offer." When you can do that and then give that tangible thing in their hands, at least in home services, we're seeing a conversion rate that's almost like cheating.
Kathleen: Yeah. That's great. It's funny too, timing-wise, because I just interviewed Oli Bilson, who's an amazing marketer. And he talked about combining digital with postcards and direct mail for a-
Adam: Really? I never... I started listening to that one, but I didn't get a chance to get it fully done.
Kathleen: Yeah, it wasn't exactly the same way you've done it, but he just talked about how direct mail is a part of his process for driving people to events, and how effective it was. I think it's one of those things that digital marketers can... It's very easy to brush off direct mail and think it shouldn't be a part of your process, but there still is definitely a role for it.
Reducing The Cost Per Lead
Kathleen: What I'm interested in hearing a little bit more from you about is the actual math and the ROI. So you talked about how roofers are used to paying $150 a lead. When you use this kind of an approach, how far down can you get the cost per lead for them?
Adam: Again, so a lot of this has been preliminary testing, so there's still... We're still talking hundreds of thousands of impressions. We're seeing success in the range of, I want to be over zealous, I would say $70 a lead is easy.
Kathleen: So like about half?
Adam: Yeah, easily half. $70 a lead is easy. I mean, have we had small campaigns where I did the content for my company and yeah we got much lower? Yeah, sure, but I want to talk about what I was able to...
What we were able to get for people within a variety of industries who didn't have the experience in digital marketing and knowing how to create a video that was really effective on Facebook, or more so hey this is the kind of video we need to do, and they could create the kind of content we're kid of looking for. We go, "eh it's okay."
Those guys, we're able to get cut in half. We were able to cut the lead cost in half and more importantly, we're exclusive and they're nurtured clients. It's not like a lead from Home Advisor where you're one of three contractors that's being contacted where Home Advisor is the protective person, and they're giving you to three contractors of which are the best of the crappy bunch.
Where it's not like oh, you're on Yelp or Angie's List or something like that, or just another Google ad click. It's not a conversion based on a Google ad click, remarketing thing on Adsense where they saw a picture for 10% off.
I mean, this is a person who has watched at least two videos of you or someone with your company talking about your service and your product, and building value in some kind of upgrade that now they're getting for free. And the cost to providing that upgrade we target to be around 5% of the total price of the service, which is dramatically less than the usual offers which are 10, 15, 25% off early season special type stuff, right?
Kathleen: And the cool thing about what you did was that the postcard goes out in such a timely fashion, especially if it's in the local area that you're hitting them at that point of highest interest.
So, from a ROI standpoint, earlier you talked about how adding the postcard into the mix, you already had a good formula with your videos, and then you add the postcard into the mix and that an improve results by anywhere from 17 to 70%.
But when you look big picture at the ROI, taking the investment that a company has to make into a campaign such as this versus the return that they can potentially see, any ballpark data there?
Adam: Yeah. Essentially, one campaign, $7,000 including marketing agency fees. I guess you should look at is as $2,500 ad spend, $2,000 in data and print and mailing. The whole thing where as far as like the hard cost, not including management, $5,000, $4,500. That there you're looking at 113 opportunities. I mean, the client reported that they're getting around 30% as far as closing rates show. Average ticket price, $8,000. Average margin, 20%.
Oh, a puppy.
Kathleen: Oh, there goes my dogs.
Adam: No problem. So then you're looking around, let's say, 30 sold opportunities at a $2,000 profit margin. So when you're looking at $60,000 in profit... What is that? 130 times 80, or 30 times 8,000. What's that?
Kathleen: I'm glad you're doing math so I don't have to. That's why I'm a marketer.
Adam: $240,000 as revenue and then $60,000 in profit off of roughly a $5,000 or $4,500 hard cost in. And then your management fees if you're not doing it yourself, right?
Kathleen: Well, by any standard, that's a pretty incredible ROI.
Adam: That's why I tell more people that they should stop trying to get... They should stop joining the bandwagon of people going after dentists and yoga studios, and maybe try looking at helping the construction industry, because they're good hard working people and they need our help.
Kathleen: Yeah, I've always said, especially with the economy they way it's been the past several years, it's almost worth if I could go back and do college over. Instead of doing college I might become a plumber or an electrician, because if you're in that trade and you know what you're doing, and you show up on time, I think there's a gold mine to be made.
Adam: Cream rises... We always say the cream rises to the top. We don't have to be perfect. We just have to be less crappy.
Kathleen: That's exactly right. Or what is that? It's like the equivalent of if you're being chased by a lion, just run faster than the next guy.
Adam: Right. I mean, it is not... The competition is there, but it is not... I mean, we're not talking about the competition amongst dentists or realtors or personal trainers. The competition in the construction industry is lower just because less people want to do it. Less people want to be a roofer, or a siding washer, or a gutter cleaner, or an ice dam remover, or all these different kinds of businesses. Not a lot of people want to pour concrete or do landscaping.
It's hard work, but because it's hard work you don't want to do it yourself. So you have to pay someone else to do it. And if you want to pay someone else to do it then you got to make sure you're paying the right price or else they're going to screw up your house and now you're going to have to redo it.
It's a business where there is... It is a good business to be in. And the problem with this industry has been frequently client acquisition. How to stand out. How to present a unique selling point, your unique market position. How do you get customers to value your time? How do you get customers to appreciate the fact that you promised good quality?
Well, you can't do any of that with a yellow pages ad, or a Google ad, or... I mean, you can try and run a flyer and jam a bunch of information from people, but they're just going to go, "Ah, too long. Didn't read," and they're going to move on to the next thing.
By using the content strategies that I've learned over the last five years in teaching, in my case, roofers, and in my partner's case, a variety of home services industries, how to actually drive traffic using these specific video scripts that are two to four minutes long that all of a sudden make people pop down a funnel and then come out the bottom and educate a consumer that values your time; Then all of a sudden your prices are going up 30% in your market because people are willing to pay an extra 10, 15, 20% for a contractor knowing that they're not going to burn your house down, destroy your lawn, wreck your house, or cause you to have to call them back time and time again for you to not answer.
These are huge, huge pain points and concerns for home owners, so home owners are willing to pay the price, especially if they're planning on living in their home.
So if you can help customers understand what to value, and then empower them to make it an educated decision through a little bit of free content that you record once and put out at scale at digital, and then use the power of Facebook, and then use the power of the Dope 360 Pixels who really hammer them with your value proposition and your upgrade offers... This is not tough stuff. This is just simple marketing.
Kathleen: Cool. Well, I love the whole system. It sounds super interesting, and there's a clear ROI case there for adding some old school direct mail back into your inbound campaigns.
Kathleen's Two Questions
Kathleen: Before we wrap up I want to ask you the two questions that I ask all my guests. I'm curious to hear what you have to say. One of them is: When it comes to inbound marketing, company or individual, who do you think is really killing it right now?
Adam: Well, I hate her politically, and I'm sure I'll split the tide on this one, but AOC. I can't stand her policies, but that girl is killing it. I mean, she's got Netflix going on. I'm like, when you asked the question I really thought long and hard about it. I was like who am I going to say? Am I going to say Nike? Am I going to say Ford? Or am I going to talk about somebody everybody else has talked about? And I thought who is really killing it right now? And I said someone who I don't like that's constantly in my ear and constantly gets my attention, and constantly keeps challenging me to think about cauliflowers being a racist vegetable. That is someone who's killing it with inbound marketing, because she is using content marketing. She is using digital. She's using Twitter. She's even got her own Netflix special.
Kathleen: She has a strong Twitter game, I'll give her that for sure.
Adam: She's the one that's battling the other guy that's got the best Twitter game, President Trump who she goes up against every other day. I mean, I know I'm from Canada so I got no horse in the race either way, but I got to say if you want to see someone who is doing a good job at communicating online and using it to attract people to her thing she will very likely be, as much as I'm not a very big fan of her, she will very likely be a person who could challenge a presidency at some point.
And she'll say, "I'm not showing up to a debate. Debate me online. I'm not showing up to a debate, living within the structure that was pre agreed upon by a bunch of stodgy old white pale stale men and we'll just go... No, I'm just going to run on my campaign and I'll get voted in and I'll win."
Kathleen: I love that example. You're the first guest I've had to name a politician in that answer, and I love it. I am not afraid for people to stir the pot a little, so bring it.
All right, that's a great one. Another question is, and this is particularly interesting with you because again you're not necessarily a marketer by trade, you're more of an entrepreneur, but you've become quite a savvy self taught marketer, so with the world of digital marketing changing so quickly... You know, everyone always describes it like drinking from a fire hose. How do you stay up to date and educate yourself about all this stuff?
Adam: Obviously I have a podcast on... I listen to podcasts because I'm always trying to stay educated on that. I would say that I frequently listen to a lot of podcasts, right? I love the... What is it? The Marketing School podcast.
And then I find some gems. You know what I mean? Something like your podcast. I listened to a couple of episodes in the last few days and it's been interesting. I mean, for me, I try and just really wander the field a lot with podcasts because it's an environment where people are forced into knowing their stuff, right? Because you're now trying to communicate... You're trying to communicate a subject where you don't have the power of video, you don't have any infographics, you don't have an animation, you don't have a PDF, you don't have anything to work with.
And then people are on the other end with just their ears, and you have to try and convey ideas about something that for a large part is pretty dry, right? I mean, compared to some other stuff. It's not Sportsnet, it's not... But you can...
The things that I've learned... I mean, what we're doing with this direct mail stuff... I mean, we didn't invent this stuff. We took it from real estate and from big box retail. And we just found a way to make it work for home services and use the technology.
A lot stuff that I use for my marketing has come from personal trainers and people like Gary Vaynerchuk. I learn stuff from Amy Porterfield, which is what webinars, and I learned... I take little tips from every different type of marketing and try and expose myself to new ideas because sometimes you run into a good idea that's like huh, I wonder if that'll work in the home sales niche, or the home services niche.
The amount of stuff I've ripped off from realtors because their industry has got to constantly be super super competitive, super cutting edge. I steal stuff from realtors al the time because there are a few things that work for me. They're high competition. They deal with home owners. And their super high margin, high price type stuff that are focused around a knowledge difference, or a knowledge incompetence.
That's me. That's podcasts. And that's a lot of showing up in a lot of different places.
Kathleen: I like that tip of sort of observing adjacent industries that maybe cater to the same audience and taking a page out of their playbooks. Some of the best marketers I know are just really keen observers, so that's great.
Adam: An unexamined life isn't worth leading, right?
How to Connect With Adam
Kathleen: Exactly. So if someone's listening to this and wants to learn more about you or do the work you do or is intrigued by the Pixel and wants to learn more about that, what's the best way for them to get more information online?
Adam: They can find me as Adam Sand pretty much anywhere, but when you Google that that comes up with a lot of Adam Sandler stuff, which is great for all the stuff I did in my younger years growing up, washing that down the drain.
But then you can also do Roofing Business Partner, so you can hit me up on roofingbusinesspartner.com and generally I have a lot of different little PDFs and blueprints that people can download to implement a lot of the stuff that I talk about here. And then if they want to talk to me more there, they're going to know how to reach me.
Kathleen: Great. Well, thanks so much, Adam.
Adam: It's not hard to find on the internet. I mean, this has been a really fun experience and you're a hell of an interviewer so thank you so much for...
Kathleen: Aw, you're very sweet. Thank you so much. I will take all the compliments and I love hearing them, as I said, in your Canadian accent. I'm a fan.