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Case Study: Coronavirus (COVID-19) Ad Spend & Its Impact

While we all try to survive uncharted territory, a few tried-and-true business principles are more relevant than ever.

Social distancing and closures of most non-essential businesses have made the telephone our primary source of person-to-person interaction. Thus, it’s not a surprise that some organizations are seeing more phone calls.

As a call analytics company, one of our key barometers is the number of phone calls placed each day. We watch the volume and duration of calls closely. This practice is no different during the current pandemic.

Our indicators present several interesting findings.

First, times of crisis create challenges for almost every business. We observe companies saving their ad spend, postponing their marketing campaigns, and stopping marketing altogether. Phone numbers are being disconnected and returned to our inventory.

Second, leaders are pushing their teams to save money and minimize expenses. Often advertising can turn on and off, so ad spend is an easy cost to cut.

Third, COVID-19 is tricky. Organizations want to be sensitive to customers and communities. But they also have to stay afloat. Even marketing pros wonder if it’s appropriate to promote products and services.

Fourth, although we are in the middle of a pandemic, many businesses still are doing well.

This article will highlight how one home services company made pivotal decisions.

Ad Spend Options

A heating, ventilation, and air conditioning (HVAC) company based in the Midwest committed to hold steady and proceed with their ad spend plans in April. Cautiously optimistic, the HVAC group maintained their ad placement and schedule.

Something amazing happened.

People continued to call for repairs and service. In fact, during April 2020, the HVAC company saw 13% more inbound phone call volume than they had in 2019. These phone calls directly tied to their ads—the ads they kept running.

What was most intriguing is that the number of phone calls and leads grew year over year.

Ad Spend - A Coronavirus (COVID-19) Case Study

Pre-COVID Ad Spend

In April 2019, they had 1,414 phone calls. Of those calls, they tagged 929 people as leads. From the total callers last year, Conversation Analytics® noted the inbound callers that converted into customers. The conversion rate was 44% or 618 sales.
inbound calls, leads and conversions

April 2020 Ad Spend & Results

This year during the COVID-19 pandemic, 1,627 people still called their marketing tracking numbers. Each call was recorded and analyzed for lead score and conversion with Conversation Analytics®.

Three-quarters of the people responding to ads had high lead scores. In fact, analytics showed that 74% or 1,202 callers genuinely were interested in hiring the company. This was up from the 66% lead ratio last April.

Now more than ever, the conversion ratio is one of the most critical indicators. People have to know that ads are driving calls, and calls are producing revenue.

Calls Leads % Leads Conversions
April 2019 1,414 929 66% 618
April 2020 1,627 1,202 74% 570

Of the 1,600 plus phone calls, 570 people booked services.
2020 ad spend & ROAS
HVAC customers have an average value (ACV) of $2,575. A basic service appointment has an average sales ticket of approximately $200. Beyond that cost, HVAC techs often discover necessary repairs. The price tag on a complete HVAC system replacement is about $5,500. It doesn’t take too many system replacements to cover the advertising costs.

Unlike the HVAC company we wrote about last week, this business ran the $10,000 direct mail piece.

Return on Advertising Spend

Let’s break down the results. In April 2020, they received 1,202 inbound calls from their ad. Three-quarters of all callers were leads, and 35% became customers.

Again, the average customer value for HVAC is $2,575. So, projections from marketing are $1,467,596 in new revenue. The Return On Advertising Spend (ROAS) is 146. For every ad spend dollar, the home services company saw $146 in revenue.

Amazing! This mini case study affirms that companies that continue to advertise during COVID-19 can see positive results.

Recently, we explored the approach of a different heating and air conditioning business that pulled a $10k marketing mailer during April. The immediate savings in ad spend ended up injuring company sales to the tune of $330,000. 

When the cost to track your success is a fraction of the ad spend, it makes smart business sense.

Convirza proves marketing produces the results you need. We’d love to work together to ensure advertising is driving leads and calls are converting.

Until then, lean on the basics that have always worked.

If you like this article, please leave a comment or question below.

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