Solved: Tracking ROI from Google LSA & Mailers for New HVAC Co.

Hi there,

Thanks for reaching out. Happy to give you some initial thoughts and guidance on getting your tracking set up for the HVAC business before you dive into spending money on ads. It's smart to get this sorted first, saves a lot of headaches down the line trying to figure out what worked and what didn't, and critically, if it was even profitable in the first place.

Setting up your tracking system...

Okay, so the absolute core of figuring out if your marketing spend is worth it is having a reliable way to connect a lead source (like a specific Google LSA campaign, or a particular batch of mailers you sent out) to the revenue or profit you make from a job that actually comes from that lead. You need to build a system to track every single lead that comes in from any of your marketing efforts.

Starting out, honestly, a simple spreadsheet can work perfectly fine. It might sound abit basic, but it's better to have a simple system you use diligently than a complex one that gets ignored. Or if you have a CRM, even better, make sure you configure it correctly for this.

You need to log the lead source immediately when it arrives – was it a call that you believe came from your LSA ad? Someone filling out a form linked from a mailer? Did they mention a unique code or offer from a specific mailer batch? Get that info down straight away in your chosen system. This first step is crucial; if you don't accurately tag the lead source at the very beginning, you won't be able to attribute anything later.

Tracking the lead lifecycle...

Next, you need to track key details about that lead as it moves through your sales process. This is where you'll add columns in your spreadsheet or fields in your CRM for things like the date you got the lead, their contact information, and crucially, their status. The status column is where you'll see if this lead is just sitting there as 'New', if you've 'Contacted' them, sent them a 'Quote', if they've 'Booked' a job, if the job's actually 'Completed', or if it went nowhere and got 'Cancelled' or marked as 'Lost'. Updating these statuses every time the lead progresses is vital.

Why track statuses? Because you need to know your conversion rate through each stage of your pipeline, specifically how many leads from each source actually make it all the way through to 'Job Completed'. This conversion rate is just as important as the cost per lead itself.

You also need to add the financial outcomes. If that lead turns into a completed job, you need to log the revenue from that job. If you're tracking profit per job, even better – add that too. Revenue is simpler to track initially and can give you a good idea, but profit is what really tells you if you're making money after your operational costs. Getting a solid handle on your average profit margin on a completed HVAC job is a big part of making sense of your ad spend.

Attributing the cost to each source...

The tricky bit, as you mentioned, is accurately attributing the cost you spent to get that lead. For something like Google LSA, it's fairly straightforward – you'll have a total spend in LSA for a given period (say, a month), and Google tells you how many leads (calls, messages) came from it. You can then calculate an average cost per lead for LSA for that period (Total LSA Spend / Number of LSA Leads). This is your CPL for LSA.

For mailers, it's a bit more manual and often requires estimation. You'll have the total cost of designing, printing, and distributing a specific mailer batch to a specific area. You then need a way to know how many leads *specifically* came from that batch. This might involve explicitly asking customers how they heard about you ("Did you receive our recent mailer?"), using unique phone numbers on different mailer designs or areas, or directing mailer recipients to unique landing pages on your website that only people with the mailer would see or use. Once you have the total cost for a batch and your best estimate of the number of leads that came *only* from it, you can calculate an estimated average cost per lead for that mailer batch (Mailer Batch Cost / Estimated Leads from Batch).

Putting it together: Calculating profitability...

So, your spreadsheet or CRM needs to have columns like:
Lead ID: (Unique identifier for each lead)
Date Received: (When they first contacted you)
Lead Source: (e.g., Google LSA Call, Mailer Batch A, Website Form, Referral)
Contact Name/Company:
Status: (e.g., New, Contacted, Quoted, Booked, Completed, Cancelled)
Date of Last Status Change: (Track when they move to the next stage)
Job Completion Date: (If applicable)
Revenue from Job: (If completed)
Profit from Job: (If you track this effectively)
Cost per Lead (Source): (This is usually calculated periodically for the source, like monthly CPL for LSA, not per individual lead)
Notes: (Any other useful info, like job type or size)

By tracking all this data for every lead, you can filter your list by 'Lead Source' and see summary metrics: Total leads from LSA, how many of those turned into quotes, how many ultimately turned into booked and completed jobs, and the total revenue or profit generated *only* from those completed jobs that originated from LSA. Then you compare that total profit to the total cost you spent on LSA to get those initial leads during that period. Same analysis for your mailers or any other source.

This is how you truly calculate the profitability or ROI per lead source. It takes discipline to log every lead like this, especially when you're busy running the business and doing jobs, but it's absolutely essential for making smart, profitable decisions about where to spend your marketing budget as you scale. Without this level of tracking, you're fundamentally just guessing which marketing efforts are actually making you money.

What kind of ROI or CPL to target from day one...

Now, regarding what kind of ROI or profitability you should target "from day one". This isn't a fixed, universal number like "aim for 3x ROI" that applies to everyone. It depends *entirely* on your specific business's unit economics for HVAC services. This means knowing your average profit per completed job, and knowing how efficiently you can turn a raw lead into a paying customer – what's called your lead-to-job conversion rate.

Let's think about the example of an HVAC company, as we're running a campaign for one right now. Based on what we're seeing for them in a competitive area, we're currently looking at costs of around £60 per lead from the ads. Now, what does that specific number, sixty quid a lead, mean for *their* profitability? It means every time the phone rings or a message/form comes in from those ads, it effectively cost them £60 on average just to generate that initial contact. Whether that's profitable or not for them depends completely on what happens *after* they get the lead.

Say, hypothetically for your business, your average profit margin on a typical HVAC service call or installation is £500. If a lead costs you £60, you need to convert enough of those £60 leads into £500 profit jobs to not only cover the cost of the leads that *don't* convert but also make a decent profit on top of your operational costs. To simply break even on the *ad cost* for that specific lead source (ignoring your time and other business costs for this simple calculation), you'd need the profit from the converted jobs to equal the total cost of all the leads you generated from that source.

If one job gives you £500 profit, and a lead costs you £60, you need to figure out how many £60 leads it takes, on average, to get just one £500 profitable job. If you convert 1 out of every X leads into a completed, profitable job, the average cost per *job acquired* from that source is X multiplied by the CPL (£60). For that Cost Per Job (CPJ) to be less than your Profit Per Job (£500), X multiplied by £60 needs to be less than £500. This means X needs to be less than 500 divided by 60, which is roughly 8.33. So, in this scenario, you would need to convert at least 1 out of every 8 or 9 leads that come in from that source into a completed, profitable job just to break even on the £60 marketing cost for that specific lead source.

If you want to make a decent profit *from* the ad spend itself, you need a significantly higher conversion rate through your pipeline than that breakeven point. Alternatively, your average profit per job needs to be much, much higher than £500. Or, you need to find ways to get leads for much cheaper than £60.

So, your target ROI or profitability from day one is really determined by two key internal metrics: 1) Your average profit per completed job, and 2) Your lead-to-job conversion rate for each specific lead source (LSA will likely have a different conversion rate to mailers, and both different again to referrals). You'll only truly know that second part with certainty once you start running campaigns and diligently tracking the leads through your sales process. The initial goal shouldn't necessarily be a specific ROI percentage number upfront, but rather to quickly start collecting the data needed to calculate your *actual* conversion rates and average job values for each source you test, so you can *then* determine confidently what CPL is sustainable and profitable for *your* unique business.

It's definately worth getting a really solid handle on your likely average profit margin per job *before* you start spending money on marketing. This gives you your benchmark for profitability. Then, run some initial, smaller tests with LSA and mailers, track everything religiously using the system described above, and see what conversion rates you actually get from those initial leads that come in. That real-world data will quickly tell you if a £60 CPL (or whatever the CPL turns out to be for your campaigns in your specific area) is viable and profitable for your HVAC business based on your conversion rates and job values.

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Moving forward and refining...

Once you start collecting this data consistently, the real work begins in terms of optimisation. You'll be able to clearly see which lead sources are performing best not just in terms of generating leads cheaply, but in terms of actually generating profitable jobs. A lead source with a lower CPL might have a terrible conversion rate through your sales pipeline, ultimately making it more expensive per *profitable job acquired* than a source with a higher CPL but much better conversion quality.

This tracking system gives you the objective numbers you need to make informed decisions about where to allocate your budget. If your data shows LSA leads are consistently converting into high-profit jobs at a sustainable CPL, great – you know you can potentially increase spend there. If mailers aren't generating enough volume, or the leads they bring in aren't converting well, you know you need to tweak the mailer strategy, targeting, or potentially pause that channel and re-evaluate. It allows for data-driven iteration, moving away from guesswork.

Getting this initial, robust tracking setup right is absolutely crucial before you scale your marketing efforts. It provides the fundamental foundation for everything else you'll do. Without it, you're essentailly flying blind, spending money on marketing without knowing with confidence if it's actually contributing positively to your bottom line in a predictable and scalable way.

Considering expert help...

Setting up robust tracking that accurately links different online (like LSA) and offline (like mailers) lead sources all the way through to actual job profit, and then being able to analyse that data effectively to make strategic decisions, can often be more complex and time-consuming than many business owners anticipate. Ensuring data accuracy, choosing the right metrics to focus on beyond just CPL, and building reliable reporting takes specific experience.

As your business grows and you look to scale your marketing efforts, perhaps adding more channels or expanding your service area, the tracking and analysis become even more critical and potentially more complicated. Understanding not just the raw numbers but *why* certain sources perform better, and knowing how to continuously optimise campaigns based on the true profitability or lifetime value of a customer rather than just lead volume or initial cost, often benefits significantly from having expert input.

If you find yourself getting bogged down in the technical aspects of the data setup, or if you want to accelerate the learning process and ensure you're extracting the maximum profitability from your campaigns right from the start without costly trial and error, working with someone who has proven experience setting up these exact types of systems and running profitable campaigns for service businesses like yours could be really beneficial and save you money and time in the long run.

Happy to chat through your specific situation in more detail if you think that would be helpful. We could hop on a free consultation call to discuss your setup, your initial goals, and how you can best approach this to ensure profitability from your marketing spend.

Regards,
Team @ Lukas Holschuh