As 2024 comes to a close and we look ahead to 2025, the home services industry is undergoing key shifts in how businesses connect with customers and convert leads into meaningful conversations. Recent Google data reveals a 19% overall increase in cost-per-conversion within Google Ads (defined as phone calls, form fills, chats, or web bookings). This increase varies by trade, with HVAC experiencing a 16% rise and electrical leads seeing a 23% jump.

Local Service Ads (LSA) have also seen significant cost increases, climbing from an average of $50.46 in 2023 to just over $60.50 in 2024. Alongside these rising costs, the average number of customer touchpoints has grown. Customers in the home services space now average 5.5 touchpoints —up from 4.9 — before completing a form or making a purchase. This increase highlights the evolving complexity of the purchasing journey.

Google’s research, echoed by client feedback, shows that 59% of customers who filled out a lead form or made a purchase spent a week or less on their purchasing journey. The takeaway? It’s costing companies more to acquire leads, customers are engaging with more touchpoints, and decision-making timelines are stretching out.

A New Year’s strategy: focus on better leads, not more leads

How should your business respond to these challenges in 2025? The answer lies in prioritizing better leads over sheer volume. Here’s how to do it.

Rather than pouring more money into lead generation, shift your focus to defining and optimizing lead value through strategic bidding. Many marketers struggle with this shift, often prioritizing lead volume over lead quality. But generating high call volume isn’t the goal — especially when up to 30% of calls are likely irrelevant based on our research. The key is to ensure that when the phone rings, it’s from a customer who is ready to convert.

Choosing quality over quantity might mean accepting fewer leads, but it will result in higher-value interactions. Ask yourself: “Am I generating quality job leads, or just attracting spammy calls?”

In 2025, “less is more” could be your winning strategy. While there’s a time and place for driving volume, the long-term goal should be securing high-value customers to achieve sustainable, profitable growth.

Unlocking success with smarter data and AI

Currently, fewer than 4% of home services advertisers go beyond basic conversion tracking in Google Ads. By focusing on deeper funnel metrics — like booked calls, revenue or return on ad spend (ROAS)—you can target higher-quality customers and optimize your campaigns more effectively.

Mapping the customer journey is a powerful tool in this process. Start by outlining every stage of the journey, integrating first-party data from both online and offline sources. This will provide better insights and enable you to assign key performance indicators (KPIs) to each step, from lead generation to final sale — and even post-sale engagement. This detailed view will reveal valuable opportunities to optimize lower-funnel conversions, ultimately improving lead quality and ROI.

In 2025, “less is more” could be your winning strategy. While there’s a time and place for driving volume, the long-term goal should be securing high-value customers to achieve sustainable, profitable growth.

With robust customer data in hand, leverage AI tools to maximize its potential. Think of data as the fuel for your AI-powered strategy. Without it, your efforts are like driving a race car stuck in second gear. AI can help you bid strategically for lower-funnel conversions. Instead of telling Google that success is just a phone call, you can redefine success as a booked job that’s been run for revenue

Real-world example: cutting costs with AI

One home services company faced a 45% cancellation rate for drain services. By implementing an AI dispatching tool, they reduced cancellations to 35% almost overnight — without increasing their marketing spend. This simple adjustment boosted profitability and demonstrated the power of AI-driven solutions.

Looking ahead to 2025

As sales cycles lengthen and customer journeys grow more complex, home service businesses face unique challenges, however, these obstacles also present opportunities. By implementing strategies like customer journey mapping, value-based bidding and integrating first-party data with AI, your business can gain a competitive edge and maximize revenue.

The path to success in 2025 lies in focusing on better leads, not just more, and leveraging data-driven strategies to win high-value customers. With these tools in hand, your business can turn challenges into victories.

Good luck in the year ahead!