We're going to create a campaign for a roofing company that operates in a few different markets. Has a few different services in commercials, in residentials and solar. We put this together based on some real data that I have. We're going to go through the campaign creation process as if it were new. Then we're going to look at the few optimizations based on some actual data that they've had through their legacy accounts. Before you get started, you want to make sure you've done your homework to make sure that these campaigns will make sense. We want to take our own advice and look at the economics of this before we get started. The company that we're talking about helping to promote, they offer commercial roofing, so think big warehouses and things like that. They have residential roofing, which is both repairs and maybe you had hail damage and you need the whole roof replaced or it's been 20 years. They also offer residential solar, so a growing field for them, people want solar on their homes, going a little bit greener. So we need to figure out on a limited budget, which one of these we would prioritize to make search campaigns for. >> Got it, so this is that first step of know your business, know your customer. >> Yep. >> And then, tell me about these customers. >> The commercial roof customers are obviously business owners. So they are probably going to operate a little differently, they're going to be very specific. They're going to want local contractors. They're going to probably be doing their searching during business hours. They think of it as something on their to do list as a business person. They're typically going to be more costly projects, so they probably do a little more research. And they're not doing it in a panic. Typically, commercial roofs, it's like, I've had this building for ten years. I've got to make sure I'm keeping up on the maintenance, I've planned for this. Whereas the residential customer, could be a little bit more of a panic, if all of the sudden, you've got water leaking. >> Right. >> You're going to do less research, you need to get somebody out there really quickly. >> Put yourself in the shoes of your customer when they're in the situation where you can help them. Exactly. And then for solar, you're probably doing again, more long lead research, not as panicked. And they've got a different set of values if they're thinking green like that, it may not be as cost sensitive and things like that. >> So that's understanding the business and the customer. Now the actual goals of what you're trying to accomplish from your marketing campaign, looks like it was consistent. >> With all of them, you don't buy a new roof, put it in your shopping cart and click buy. >> Right. >> This is really a lead system. Those leads then go to an estimator. The estimator meets with the business owner, the home owner. Looks at their specific project, gives them a quote, and then you secure the business. >> So the math part of the economics of the business looks like there's a pretty big variation here. >> A commercial roof on average can be $120,000 to replace. Obviously, building size a big function of the cost and they're also done at typically high margin. The types of materials you use are a little different, doesn't have to look as nice as a residential roof. Whereas a residential roof, lower price and a little bit lower margin. It's highly competitive so everyone's had to keep those prices super low because you've got a lot of contractors that do residential roofing. And lastly, you've got solar, where it's both a little better priced and it's kind of mid-margin. It's not as lucrative as say commercial, but there's less competition, so a little more lucrative than a regular residential. >> So big variation in the economics that you're going to get and the value of these leads. But again, these are only leads and you still have to sell the to the customer. >> How are we going to know that the search campaign was worth it? What's our close rate on these leads? So again, I like to think of it in base 100, so it's easy to do the math. If we get 100 of these, can we close six commercial roofs, and how do the economics work out there? So we want a close rate of 6% for commercial, 4% for residential. Again, that's because there's all of that competition. And solar, we've got a really compelling case for solar. We've got some really good case studies and good guys on our team that have done good solar, so closing at 90% on solar leads. >> So clearly, the commercial roofing is pretty attractive because of those margins in the price point. Solar is very attractive because of the close rate. >> So we were tossing around an $8,000 budget. This is how we would split it up just based on taking a good pen to paper on our numbers. We're not going to do any for residential roof repair and replacement. The competition's too much, search is too expensive. We're going to focus on commercial and residential solar, that 5K for the commercial roofing and 3K solar. >> Got it. And that then leads to your campaign structure so now you're already starting to think about how you're going to build these campaigns. >> Exactly. >> Against these customers with these kind of budgets, and campaign structure. >> In terms of goals, so you've gotta be able to have something to optimize it too? >> Yep. >> It looks like you've got all of the math, and you put all of the numbers up here. >> I did the math, I allowed a little padding because we don't know exactly every project, we're working with averages. But on those commercial roofs where we'll focus for this first campaign, the average project revenue is 120,000. But then the net margin when you get through all the expenses, paying the labor, the materials, all that. You get down to about a 22% margin, which yields you about 26,000 in profit. >> Pretty good. It feels like a lot of money, we're doing pretty well. We're saying theoretically, we'd like to get the leads as cheap as we can. It would be a lot nicer to get, >> Keep some of that margin. >> Keep some of that margin so the business is profitable. The most we would ever pay for a closed project is 15k. That gives us that padding for both profitability, but also, varying project sizes, complications, things like that. >> But that's a signed deal, you still need to close those leads. >> Got to close those leads, so if we're only closing 6% of the leads, a max we could ever pay for a lead is about $900. >> Which is still pretty good. >> Still big numbers, but as we'll see, I think that click costs are pretty expensive in the space. >> Got it, you eat that up pretty quickly. Now we've done all our preparation, we've got our idea about our structure and our customers and who we're going to target. We've got our CPA target calculated, I think we're ready to build some campaigns. >> Let's build some campaigns. A builder, it's campaign construction. >> Awesome.
