Last week, I made the case that you’re not Chick-fil-A.
Because nobody craves a plumber. Nobody lines up for an electrician. I talked about how you’re in the memory business and your whole job is to be the name people reach for on the bad day when something finally breaks.
This time, I want to put a number on that.
Because here’s the most expensive mistake I see contractors make, over and over, in every trade and every market:
They pour money into chasing strangers.
While the customers they already earned quietly walk out the door and forget they ever existed.
It feels productive. New leads, new calls, a digital agency cranking out cost-per-click. The dashboard lights up. Growth, right?
Except the math tells a different story.
A brand-new prospect costs you somewhere between 8 and 12 times more to acquire than a customer who already knows you. A repeat customer spends, on average, 33% more per visit. And according to Bain & Company and Harvard Business Review, nudging your customer retention up by just 5% can lift profitability by 25% or more.
Even Disney World, a place people genuinely dream about visiting, builds its entire year around the fact that roughly 70% of its business comes from repeat customers. They plan for it. On purpose. Every single year.
If the happiest place on earth obsesses over the customers it already has, what does it say that so many of us treat ours as “done” the moment the invoice is paid?
So let me introduce you to two customers. Our marketing coaches at Nexstar, Miles Bartoletti-Levy, built this out, and it’s the clearest version I’ve seen; he gave them names. Loyal Lisa and Stranger Sam.
By the time you’ve met both, I think you’ll spend your next marketing dollar very differently.
(Hat tip to Miles Bartoletti-Levy and our Nexstar marketing coaching team, who built the Loyal Lisa vs. Stranger Sam model the numbers above are drawn from. Stats: Bain & Company / Harvard Business Review on retention and profitability; Disney repeat-business figure via helpscout.com.)
Loyal Lisa, Stranger Sam, and the dollars nobody runs
Here’s how most contractors think about growth: more leads, more calls, more new faces in the pipeline. So the marketing budget gets pointed almost entirely at strangers. Cost-per-click. Pay-per-lead. The agency.
And the customer you already served? The one who let you into their home, watched your tech work, paid the bill, and was happy? They get nothing. No follow-up. No reason to remember you. You spent good money to earn them once, and then you let them go cold.
That’s the mistake. And the numbers behind it are brutal once you actually run them.
Meet Loyal Lisa. She’s worked with you before. To reach her again, you don’t need an room full of strangers; you need a postcard, a text, an email, a yard sign she already trusts. Reaching Lisa costs about $25.
Meet Stranger Sam. He’s never heard of you. To get him to call, you’re bidding against every other contractor in town for his click. Reaching Sam costs about $250.
That’s a 10x difference on the very first touch, before a truck has even left the shop.
Now watch what happens down the line.
When Lisa calls, she books at a high rate, because she already trusts you. She rarely cancels. And when your tech recommends the right repair, she says yes, because she’s said yes before and you didn’t burn her. On a typical service repair, Lisa spends around $998.
Sam? He’s shopping. He booked three companies. He cancels more. He second-guesses the tech he’s never met. And he spends less, about $750 on the same kind of job.
Put it together and one completed job looks like this. Lisa: $998 in revenue, $25 to reach her, about $973 in profitability. Sam: $750 in revenue, $250 to reach him, about $500.
Already lopsided. But the real gap doesn’t show up until you run it through your funnel.
Every job you complete survives a gauntlet: the booking rate, the run rate after cancellations, the tech’s conversion rate at the door. Lisa sails through it; she books at 90%, runs at 90%, converts at 70%. Sam stumbles at every stage, books at 50%, runs at 80%, converts at 50%.
Start each of them with the same 10,000 demand calls. Lisa turns into 5,670 completed jobs. Sam turns into 2,000.
Now layer the dollars on top. Across those 10,000 calls, Lisa generates over $5.4 million in profitability.
Sam loses you roughly a million dollars.
Read that again. At realistic, everyday conversion rates, chasing a funnel full of strangers isn’t just less profitable; it can put you underwater. You can run yourself ragged, keep every truck busy, hit your call count, and still go backward, simply because you aimed your money at the most expensive, least loyal customer you could find.
That’s the aha. And it connects straight back to the issue.
Staying top of mind in the memory business isn’t a soft, feel-good idea. It’s the single cheapest source of profit you have. Every customer you keep is a customer you don’t have to buy again at 10x the price. The well-timed spike of attention I talked about last time? This is what it’s for. It’s how Lisa stays Lisa instead of slowly turning back into a stranger.
So the question Nexstar’s team puts on the screen is the one I’ll put to you:
Are you prioritizing Sam over Lisa in the way you plan your marketing?
Most contractors are. Without ever deciding to.
How to keep Lisa before you chase Sam
Let me show you the part that should get you genuinely excited.
You don’t have to overhaul anything. You don’t need a 90% repeat rate overnight. Watch what a small move does.
In our modeling of a typical 10-truck shop, going from a 50% repeat customer rate to just 55% (five points) drops your lead costs about 9%, nudges revenue up, and lifts profitability by 32%. Five points. A third more profit.
And if you climbed all the way to the Nexstar benchmark of 80%? Profitability jumps by 192%. Nearly triple. Same trucks. Same techs. Same town. You just stopped letting the customers you already paid for slip away.
That’s the prize. Here’s how you go get it.
1. Pull Lisa and Sam apart in your own numbers
You can’t manage a customer you can’t see.
Right now, most shops blend everyone into one pile of “calls.” Stop. Split your funnel into two: repeat customers in one column, brand-new strangers in the other. Run each through booking rate, run rate, and tech conversion separately.
The first time you see Lisa’s column next to Sam’s, it stops being my opinion and becomes your spreadsheet. And nothing changes behavior like a business owner seeing their own money on the table.
2. Find your Repeat Customer %
This is the one number to rule them all: of every job you completed, what percentage came from someone who’d worked with you before?
That’s your Repeat Customer %. It’s the truest measure of whether you’re building an asset or just renting strangers from an ad platform.
If you don’t know it today, that’s not a failure; it’s your starting line. Go find it this week. Everything else keys off it.
3. Plan backward, not forward
Most marketing plans start with “how many leads can we buy?” That’s the wrong end of the telescope.
Start with the revenue you actually want. Work back to how many techs and trucks that takes. Then walk backward through your funnel, conversion, run rate, booking rate — to land on the number of demand calls you truly need. Set your budget against last year’s revenue, not against whatever the agency talks you into.
When you build from the goal backward, you stop buying calls you can’t profitably convert. The plan tells you what you need instead of the ad platform telling you what to spend.
4. Fund Lisa first
Here’s the discipline almost nobody has.
Before you hand a dime to the agency for strangers, estimate how many Loyal Lisa opportunities you have this year — every past customer who could call again. Then calculate what it costs to earn them back: the mail, the texts, the reminders, the occasional touch that makes them smile.
Fund that first. It’s your cheapest, highest-return marketing on the board. Then take whatever budget is left and go buy the Stranger Sam calls you still need to hit your number.
Lisa first. Sam with the leftovers. Not the other way around — which is how most shops do it today.
And remember what “earning Lisa back” actually looks like, from last issue: not a weekly email about pipes. Strangers get bought; Lisa gets remembered. A well-timed, genuinely useful, occasionally fun touch, the kind that lands inside that 15-month window before she forgets you. That’s retention marketing. The cheap kind. The kind that compounds.
5. Move the number five points
Don’t set out to triple your repeat rate this year. Set out to move it five points.
From 50 to 55. From 60 to 65. Wherever you are, plus five. We just saw what five points does to a 10-truck shop, roughly a third more profit, for work you’ve largely already done once.
Five points is achievable. Five points is measurable. And five points, repeated year over year, is how an ordinary shop quietly becomes the most profitable one in its market.
The real shift
Last issue I said the trades aren’t in the loyalty business; we’re in the memory business. This is the invoice for that idea.
Growth in our world was never about how many strangers you can afford to buy. It’s about how few of your own customers you let slip away.
The customers you’ve already earned are the cheapest growth you will ever get. They cost a tenth as much to reach, spend a third more, convert at every stage, and don’t need to be convinced you’re any good; they already know.
Stranger Sam will always be there when you need him. But if you’re spending your best dollars chasing him while Lisa quietly forgets your name, you’re making the most expensive mistake in the trades.
Keep Lisa first.
— Julian Scadden
CEO, Nexstar
P.S. Two things to do this week. One: find your Repeat Customer %. Just the number. Two: pick the five-point target you’ll chase this year. Hit reply and tell me where you’re starting. I read every one, and the gap between where shops start and where they end up is usually a lot bigger than five points.