The 5 Numbers Every Home Service Owner Must Know Before Running A Single Ad

IF YOU DO NOT TRACK THESE 5 NUMBERS, STOP RUNNING ADS

I have audited thousands of dollars a month in ad spend on behalf of home service operators who could not answer a single basic question about their own funnel. How much do you pay per lead? What is your close rate? What does a customer pay you over their lifetime?

No answer. No answer. No answer.

If that is you, here is the rule. Before you spend another dollar on ads, lock in tracking on these 5 numbers. Without them, you are just handing money to platforms and hoping something works. With them, you can tell within 30 days whether a campaign is actually profitable, and you can scale the winners and kill the losers with precision.

NUMBER 1: COST PER LEAD (CPL)

Definition: How much you pay on average to generate one lead.

Formula: Total ad spend divided by total leads generated.

Example: You spent $3,000 on Meta ads last month and the campaign produced 120 form leads. Your CPL is $25.

CPL is the first number every owner wants to look at, because it is the easiest to calculate. But it is also the most overrated number in home service marketing. A low CPL with a bad close rate is a worse business than a higher CPL with a great close rate.

Healthy CPL ranges vary a lot by category. As a rough guide for Meta ads:

• Pest control: $20 to $35
• Lawn care and landscaping: $15 to $30
• Roofing: $40 to $80
• HVAC: $35 to $70
• Electrical: $40 to $75
• Garage doors: $30 to $60

Use those as anchors, not absolutes. Your market, your offer, and your targeting will move the number up or down.

NUMBER 2: CLOSE PERCENTAGE ON LEADS

Definition: The percent of leads that turn into booked, paying jobs.

Formula: Booked jobs divided by total leads, times 100.

Example: 120 leads came in last month and 36 of them became booked jobs. Close rate is 30 percent.

Close rate is where most home service businesses bleed money without realizing it. A campaign with a $25 CPL and a 10 percent close rate produces a $250 cost per booked job. A campaign with a $40 CPL and a 40 percent close rate produces a $100 cost per booked job. Same market. Same ad spend. Completely different outcome, all because of what happens after the lead comes in.

Healthy close rate targets by lead source:

• Meta form leads with fast follow up: 20 to 40 percent
• Google search leads: 40 to 60 percent
• Referrals: 60 to 80 percent
• Cold outbound leads: 5 to 15 percent

NUMBER 3: CUSTOMER ACQUISITION COST (CAC)

Definition: The full, loaded cost to acquire one paying customer, not just one lead.

Formula: Total ad spend divided by total new customers acquired. Or, CPL divided by close rate.

Example: $3,000 spent, 36 new customers booked. CAC is $83.

CAC is what CPL pretends to be. CPL only tells you how much a lead costs. CAC tells you how much a paying customer actually costs, which is the number that determines whether your business is profitable.

The rule every home service owner should burn into their brain: your CAC must be significantly lower than your average first job revenue, and much lower than your LTV. If CAC is $83 and your average first job is $300, you are in great shape. If CAC is $350 and your average first job is $300, you are losing money on every new customer and hoping the backend saves you.

NUMBER 4: RETURN ON AD SPEND (ROAS)

Definition: The total revenue generated for every dollar spent on advertising.

Formula: Revenue generated from ads divided by ad spend.

Example: $3,000 spent on ads, $12,000 in booked revenue from those leads. ROAS is 4x.

ROAS is how owners tell whether a campaign is actually making money. At SSG, every ad client operates under a 2.5x ROAS guarantee as the minimum acceptable target. If a campaign is not at least producing 2.5 dollars for every 1 dollar spent, it is not sustainable. Below that, you are paying for vanity leads. Above that, and especially above 4x, you are in scale territory.

Quick targets by business type:

• Low ticket, high repeat businesses (pest, lawn, cleaning): 2.5x to 5x ROAS on first job, with LTV doing the heavy lifting
• High ticket, one time jobs (roofing, HVAC install, electrical panel): 3x to 6x on the single job
• Subscription or recurring revenue models: can run at lower ROAS if the LTV multiple is strong

NUMBER 5: LIFETIME VALUE (LTV)

Definition: The total revenue one customer brings in across the entire time they stay a customer.

Formula: Average revenue per visit, times average number of visits per year, times average customer retention in years.

Example: A pest control customer pays $89 a quarter and stays a customer for 3.5 years on average. LTV is roughly $89 times 4 times 3.5, which is about $1,246.

LTV is the single most underrated number in home service marketing. Owners who know their LTV can confidently pay CACs that look expensive on the surface, because they know the backend will repay them many times over. Owners who do not know their LTV either underpay for leads and lose market share to competitors who understand the math, or they overpay and go out of business.

The LTV to CAC ratio is the single biggest driver of long term profitability in home service. A 3 to 1 ratio is okay. A 5 to 1 ratio is healthy. A 10 to 1 ratio is category dominance.

THE SIMPLE TRACKING SYSTEM TO START THIS WEEK

You do not need enterprise software to start tracking all five numbers. Here is the stripped down version any home service owner can set up in under 2 hours:

1. CPL: Pull weekly totals from every ad platform. Divide spend by leads.
2. Close percentage: Keep a simple spreadsheet of every lead, the source, and whether it turned into a booked job.
3. CAC: Divide ad spend by booked jobs from that spend.
4. ROAS: Track revenue from each ad lead in your CRM, pipe it back to the campaign.
5. LTV: Pull 12 months of customer data. Average first job revenue plus expected repeat revenue over the average retention window.

If you do not know these 5 numbers at a glance every Monday morning, you are flying blind. If you do know them, almost every marketing decision becomes obvious.

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