Understanding HVAC demand in Q1
April 8, 2024
We talked to SearchLight’s Jonathan Torrey, who recently analyzed Q1 demand trends among a sample of HVAC contractors nationwide, about what happened and what’s next.
The numbers: From January to March, unique leads were down 11%; customer acquisition costs (CAC) from organic channels decreased by 13% to ~$85; and average tickets fell 8% to ~$2,200.
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Sold revenue from organic leads, however, was up 16% from February to March. “This is sold work not yet completed and collected, so April will start with a strong pipeline,” Torrey wrote.
What happened: On unique leads and CAC being down, Torrey noted via email, “Spend on management fees came down. Organic is unique in that you don't pay for clicks to the website, but you usually pay someone to manage your SEO strategy.”
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Average tickets decreased as expected given shoulder season and fewer replacement opportunities.
Looking ahead, Torrey shared his thoughts:
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On unique leads: “I expect, based on historical data, unique leads to increase sharply [in Q2] and peaking around June/July, then tapering off and flattening in Oct/Nov.”
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On CAC: “I expect CAC to come down [in Q2] and hit its lowest cost in June, before steadily rising again and hitting highs in Nov/December.”
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On the best-performing channels in Q2 and Q3: “PPC gets really cheap in the summer months — a lot of times because people pull back because there’s more demand. I know people hate it because it’s expensive, but if it’s 90 degrees and your AC stops working, you’re Googling ‘AC repair near me.’ Like, I need this fixed. If I had to pick one, it’s PPC.”
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