Lead Generation for HOA Management Companies

One of the most neglected (and yet critically important!) areas of operating an HOA management company is Lead Generation.

Lead Generation is the process of creating (i.e., generating) new business leads (i.e., inquiries).

Of course, there are the standard ways that new HOA management companies get leads – personal referrals, friends and family, and from other HOA vendors.

While those standard ways might be enough to get your company started, they’re not enough to keep you growing and building a business that can make you wealthy.

Let me tell you the secrets of the Big Boys . . . .

The largest HOA management companies in the country use proven sales and marketing techniques to generate a consistent pipeline of new clients.

Now you could spend tens of thousands of dollars (or more!) figuring out all these techniques and which supplies to use. You could even invest the 5-6 years that I did learning the techniques yourself. Or you can keep reading . . .

Besides, you paid for a VIP Membership with HOA Profit Gurus so you might as well take advantage of that smart decision!

Ok, here’s how the Big Boys do it.

First, they use statistics, math, and cash to generate the lead flow that they want.

Second, they continuously refine and perfect their statistics (or ‘performance’) to get more out of their money.

Here’s a great example from our industry on how this works:

- The average cost per inquiry (often also called a “lead”) is $70.00

- The average closing ratio from inquiry (lead) to signed contract is 10%

- The average cost to get someone to “click” on your internet advertisement is $1.75

So let’s say that the Big Boys want to get 1 new HOA client this month (I know this is a low number, just go with it for now as it’s easier to make my point).

They advertise on the internet using the fastest and easiest method – Google AdWords (see Google AdWords ).

They tell Google that they will pay an average of $1.75 per click because they’ve calculated that for every 40 clicks on their ad, someone will contact the company for a management proposal. (Note: $1.75 x 40 = $70.00)

Now that Big Boy company is generating leads at $70.00 each, they calculate how many leads they need to get a signed contract.

They track their internal information for a few months and realize that they win 10% of the deals that they propose on.

This means that a new HOA contract costs them $700.00 (i.e., $70 per lead times 10 tries to win a new client) in lead generation expense.

Knowing this $700.00 cost helps the Bog Boy company to price it’s services and contract length so that it can recoup it’s $700.00 investment from each and every new client as fast as possible.

Note: some Big Boy companies even charge a “set-up fee” to recoup this investment before they even start working with the new HOA client.

So, no you know how the Big Boys generate leads. Wanna know how to do it MUCH cheaper?

Ok, ok. Here are the best ways I’ve found to invest less and win more new clients:

- Reduce your average cost per click on Google’s AdWords from $1.75 to $1.50 (this alone will get you almost 15% more leads for the same total cost)

- Increase the percentage of people that contact you about a proposal after clicking on your ad (this can be done with “free” offers, education programs, etc). A change from 10% to 15% will save you 33% while generating the same number of new clients.