Mover Metrics: Marketing Cost Per Booked Move
Efficient organizations meticulously measure and monitor their marketing metrics, and moving marketers know them off the top of their head. Movers that don’t know these metrics can be wasteful with their spending and miss out on opportunities. At P4P, we work with hundreds of moving companies to help them optimize their marketing channels and streamline their sales funnel, and we share some of what we have learned here.
Defining the Metric
The first metric we will dive into is “marketing cost per booked move”. This metric will include all of the costs incurred to generate the lead and schedule an inventory. It will not include the sales cost, which we will cover in another post.
How to Calculate
Figure out each of the following numbers for the last calendar year:
- Total number of consumer moves booked.
- Direct marketing spend: Total spend on leads from lead aggregators, advertising, search or PPC marketing, etc. You can probably pull this number directly from the Marketing line item on your P&L.
- Marketing allocation shared with the van line: This one is more complicated since you probably don’t have a line item for it. In most van line contracts, there is a stipulation that a percentage of the revenue of every move goes into a marketing fund, which the van line then spends on advertising and other leads which it sends back to you. You might need to dig up your contract to find this number. Once you have the percent, multiply it by the gross revenue (or net line haul, whichever the contract stipulates) of consumer moves.
- Contact center costs: The all-in salary cost of anyone whose job it is to answer the phone (or make outbound calls) and set appointments. If someone performs this task in addition to others, estimate the percentage of their time spent performing these contact center activities. If you use an outsourced contact center such as P4P, this number is the cost of appointments (excluding non-sales inbound) spent with P4P.
- Website fees related to marketing: We don’t advise including the total cost of your website, but if you are spending on an SEO firm or any other services with the goal of driving consumer leads, include this cost.
- Management cost: The all-in salary cost and total consulting cost for anyone spending time on any of the above items. If you are the owner and you are spending time on this directly (you should be), estimate the opportunity cost of your time ($50 / hour is roughly equivalent to $100,000 per year salary) and the amount of time you spend on marketing. If you spend 8 hours a week reviewing marketing metrics, working with your contact center team, talking to your website vendor, etc., then your annual management cost is roughly $20,800. If you work with P4P, include your time spent on your weekly or monthly review call with your Account Rep.
Sum up your direct marketing spend, marketing allocation shared with the van line, contact center costs, website fees related to marketing, and management costs. Your marketing cost per booked move will be this number divided by the total number of consumer moves booked.
In our experience, companies that can keep their marketing costs under $375 including management cost or $300 excluding management cost, per long distance move (averaged over a 12-month period to remove seasonality) are in a healthy, sustainable marketing position. (Note that this number may be 20% higher or lower depending on how competitive your market is.) Moving companies that are spending more than that should take a look at each of the above numbers and determine where they are over-spending.
Once you know your marketing cost per booked move, the next step is to calculate it for each marketing channel. The process is roughly the same, but you will need to make sure that you know which channel each of your booked moves came from and then appropriately allocate expenses.
Example Tracking Spreadsheet
If you want some help getting started, download this cost per booked move excel spreadsheet with an example of what these numbers may look like. You can use this tool to generate the chart at the top of the page for your own business.