The 5 Hidden Reasons Your Leads Aren’t Turning Into Customers!

In 2010 I worked for a company that sold phone calls to local businesses (think plumbers, chiropractors, electricians and other types of local businesses). The business model was pretty simple - the company stood up a directory and instead of the actual business phone number, they used unique local phone numbers that were forwarded to the actual business.

When the company answered the phone, they didn’t know that the customer called a different phone number (since it was forwarded to their direct line). Then, the business could log in into a dashboard and see which phone calls were generated from this company and they were charged for the “good” phone calls (the ones that resulted in potential business or a “lead”).

I thought this approach was interesting and I wanted to see if I could set up something up on my own that achieved a similar objective - generate leads (via phone calls) and sell those leads to businesses.

This blog post isn’t focused on “how” I was able to set all this up (I’ll write about that in detail in another post) so I’m going to skip a lot of the tactics used to get this up and running.

How I Generated Phone Leads

What I ultimately did was set up local listings on Google and other directories with the goal to generate leads via organic search (read: free) that could then be sold to actual local businesses.

I created a listing for a company called “Plumbers New York” and a company called “Appliance Repair New York”. When I originally did this I lived in New York so I used my apartment as the address for “Plumbers New York”. Google sends a physical postcard to the address of the business to verify that it’s a real address. When I received the postcard, I entered a unique code and it verified the listing. I had to use my friend’s apartment for “Appliance Repair New York” so that we wouldn’t have 2 businesses at the same exact address.

I used a tracked phone number as the main business phone number on the listing. This allowed me to track and record all the phone calls to see how many people were calling my new businesses. It also allowed me to update where the number gets forwarded without having the change the listing. This was important because I was planning on forwarding these to a business once I started generating a decent amount of phone calls.

To be honest, I set all this up and then forgot about it. About 10 months after I set it all up I started getting phone calls from people looking for a plumber in New York. I also wasn’t answering a lot of unknown numbers. Once I realized what was going on, I checked the call tracking system I was using and noticed that I was getting about 90 calls per month. I then went over to Google and noticed that “Plumbers New York” was the top result on Google places for some really good search terms like “plumber new york” and “plumbers NYC”.

The Leads Were Amazing

I was getting almost 100 leads per month, via phone calls, from people looking for a plumber. This was awesome news. I then found a plumber to sell the leads to. We agreed that he would pay me $20 per phone call for all calls over 60 seconds (since some of the calls were bad numbers, telemarketers, etc).

I would send him monthly email updates like this:

I began listening to some of the phone calls to make sure he was getting good quality leads and that he was booking appointments. After about 10 phone calls I noticed a pattern that was absolutely shocking to me.

Why The Leads Weren’t Converting

The quality of phone calls was unbelievably good. They were people looking for a service that he provided (plumbing repairs), they were in his service area (NYC), they were asking buying questions, and they were asking him to come out to them for either an estimate or to perform the job. And even with these exceptionally qualified leads, he was still unable to close them.

It was frustrating for me because I was doing everything that was expected - generating high-quality leads - and they were getting wasted since he wasn’t able to close them.

Start listening to this call at 2:30:

This is uncomfortable to listen to. So many things went wrong in this conversation. The customer is a lawyer in New York City, lives on the Upper East Side, and needs a plumber ASAP.

How much hotter of a lead can you possibly get?

For reference, I’m going to breakdown this phone call and explain what went wrong and offer a script on what this plumber could have done to close this lead.

2:30 - After explain her plumbing issue, the prospect proceeds to give her location and explain how she’s close to the plumber. The plumber replies that the way he works is that he charges $200 per hour for the first hour and then $100 per hour after that, plus materials.

2:45 - The prospect replies “well that’s expensive” to which the plumber answers “it’s because Manhattan is expensive”.

2:55 - The prospect then proposes that the plumber come out and “asses the situation and give an estimate” (typically this is exactly what you want to hear from a prospect). The plumber replies that “the person coming out to see you gets paid salary” and then he continues to be passive-aggressive and says “unless you can convince the person to work for free” (yes, he actually said this). He then proceeds to explain how the technicians are on salary and why that customer should pay for them to come out and look at her situation.

3:55 - The plumber goes on to say “it’s the same as you, you expect to get paid if you are working” to which the prospect replies “well I’m a lawyer and it’s different”. The plumber then responds “I’ve had tons of meetings with lawyers - you guys charge for consultations. It’s the same as you.”

This call is particularly difficult to listen to. Not only did he not close a very hot lead, but the conversation was hostile and awkward.

The conversation could have gone drastically different if the plumber used a different approach and a different script.

The first thing you need to do when selling is to establish credibility.

In this example the plumber never sold himself or his company, meaning he never gave the customer a reason to want to hire him. The conversation went from her explaining her plumbing issue to a discussion about price. The plumber didn’t build any value around why the customer should pay the price he charges.

Here are 5 things the plumber could have said to close the lead

These 5 tactics would have turned this lead into a paying customer.

Empathize with customers

"Oh wow, I totally understand what you’re going through and I can personally relate to the frustrations of having plumbing issues. It’s something you never really plan for and can be a bit annoying trying to find a reliable plumber in the city that can accommodate your schedule. I get that.”

Establish Credibility

“That said, we are one of the top-rated plumbers in New York City and have been servicing Manhattan for over 12 years. Our customers come back to us time and time again because we offer fast, quality service that they can count on. We are fully licensed and insured which allows us to service nearly any building in New York.”

Address Competitors

“There are a lot of uninsured plumbers out there who may give you a low rate, but your building won’t allow them to service you, and to be honest, I’m not sure you’d want to count on them for your plumbing needs anyway.”

Provide Estimate (Without Disclosing Hourly Rate)

“I’d love to come out and take a look at your issue. I can give you a ballpark price but it might change a bit based on the actual problem we find. Based on what you told me, it should be about $400-$800 total, which includes labor, materials, and tax.”

Build Value Around Price

“Of course we are going to send out one of our best technicians who is licensed and insured and will make sure that everything is perfect before he leaves. We also back our work up with a 2 year warranty in case anything unexpected happens, we will send someone out to fix it free of charge.”

This call is frustrating and there were hundreds of calls like this. Offering advice to business owners is one way we can help them turn more prospects into paying customers.

I was doing this in a couple of different industries including appliance repair. The problem that I was running into with the appliance repair business owner was that he wasn’t answering his phone.

One day I even sent him this email:

I was logging into the call tracking system and finding a lot of missed calls and unreturned voicemails. This isn’t surprising when the data shows that 40% of phone calls to small businesses go unanswered. Billions of dollars in revenue are lost every year simply because no one is answering the phone.

Conclusion

Businesses aren’t answering 40% of their phone calls. When they do answer the phone, they are not closing a lot of the leads that they could be closing. Businesses aren’t building value around their pricing and are pricing their jobs differently than one another (hourly vs fixed rate). This leaves the customer confused and frustrated.

One solution to this problem is to set up a call tracking system like PhoneWagon that rings multiple phones or ring different people during different times of the day. That way if the business owner is on a job or busy, other people can also answer the phone, ensuring no call goes unanswered. Call tracking also gives you insight into what is happening and how your customers are finding you. Very powerful.