Although relatively new ways of generating business—such as company web sites and online review services—tend to get a lot of attention, the best source of leads for remodelers are still the traditional ones, according to NAHB’s Remodeling Market Index (RMI)  survey.

In answer to special questions on the third quarter 2013 RMI survey, NAHB’s professional remodelers on average attributed 37 percent of their leads to “Existing and Returning Clients” and another 37 percent to “Referrals from Clients.”  No other source was responsible for more than 8 percent.  (The questionnaire was developed after extensive consultation with remodelers, to make sure it captured the important sources of leads).

Not only are returns and referrals the most common source of leads, they’re also the best in terms of close rates.   In the same survey, professional remodelers on average said they closed 53 percent of their leads based on existing and returning clients, and 45 percent of their leads based on referrals from clients.  Again, these percentages are considerably higher than for leads generated from any other source.

The large share of business from customer returns and referrals doesn’t mean remodelers can neglect web sites and other means of advertising altogether.  The alternatives  offer newer companies that haven’t built up a customer base a way to generate businesses, and the close rates on leads generated from signage  and company web sites is a respectable 10 percent-plus.  An earlier post has shown that remodelers and builders can, in fact, generate substantial business from their company web sites, especially if the sites offer the right kind of information.

Tags: close rates, economics, home building, housing, leads, remodeling