How to Reduce Cost in Google Local Service Ads for HVAC Contractors

Google Local Service Ads can be one of your best lead sources or one of your biggest budget drains. The difference comes down to how well you optimize your account.

Most HVAC contractors set up their LSA profile, turn it on, and hope for the best. Then they watch their budget disappear on leads that don’t convert, customers who ghost them, or calls from people outside their service area.

Sound familiar?

The good news is you have more control over your LSA costs than you think. Small optimizations can reduce your cost per lead by 30-40% while actually improving lead quality.

This guide shows you exactly how to cut your Google Local Service Ads spending without sacrificing the leads you need to grow your business.

Understanding How Google Local Service Ads Pricing Works

Before you can reduce costs, you need to understand what you’re actually paying for.

Unlike traditional Google Ads where you pay per click, Local Service Ads charge you per lead. A lead is counted when someone either calls you directly through the ad or sends you a message.

According to Google’s own data, HVAC contractors typically pay between $15 and $40 per lead depending on their market, though some competitive areas see costs as high as $60-$80 per lead.

Your actual cost depends on several factors:

Market competition determines baseline pricing. Major metropolitan areas with dozens of HVAC contractors cost more than smaller markets with less competition.

Your ad rank affects how often your ad shows and in what position. Higher-ranked ads appear more prominently and get more leads, but Google uses a quality-based system rather than pure auction bidding.

Lead type matters too. Emergency service calls during peak season cost more than routine maintenance inquiries in the off-season.

The key insight here is that while you can’t control market rates, you can absolutely control your ad rank and lead quality through strategic optimization.

Strategy #1: Dispute Invalid Leads Aggressively

This is the fastest way to reduce your effective cost per lead, yet most contractors leave money on the table by not doing it.

Google allows you to dispute leads that don’t meet their quality standards. When a dispute is approved, you get credited back the cost of that lead.

What qualifies as a disputable lead:

• Wrong service area (caller is outside your defined zones)
• Wrong service type (they need electrical work, not HVAC)
• Spam or solicitation calls
• Accidental calls (they hung up immediately or dialed wrong number)
• Duplicate calls from the same customer about the same issue

According to research from Sterling Sky, contractors who actively dispute invalid leads save an average of 15-25% on their monthly LSA spending.

Here’s the catch: you have 30 days to dispute a lead, and Google reviews disputes within 3-5 business days. Set a weekly reminder to review your leads and dispute anything questionable.

How to dispute leads effectively:

Log into your Local Services dashboard at https://ads.google.com/localservices, go to your leads section, and click on any lead you want to dispute. Select the appropriate reason and provide specific details about why it doesn’t qualify.

Be honest in your disputes. If it was a legitimate lead and you just didn’t close the deal, don’t dispute it. Google tracks dispute patterns, and accounts that abuse the system can face penalties.

But if someone called asking about electrical work or they’re located 50 miles outside your service area, absolutely dispute it. That’s money you shouldn’t be paying.

Strategy #2: Tighten Your Service Area

One of the biggest money-wasters in LSA campaigns is serving areas that aren’t profitable for your business.

When you first set up your account, you probably cast a wide net, thinking more coverage equals more leads. But here’s what actually happens: you get leads from areas that are too far away, require excessive drive time, or don’t match your ideal customer profile.

Take a hard look at your service area settings and ask yourself:

• Which zip codes produce your most profitable jobs?
• Where do your best customers live?
• Which areas require so much drive time that jobs barely break even?
• Are there neighborhoods where you consistently struggle to close leads?

Remove or reduce coverage in areas that don’t make business sense. Yes, you’ll get fewer leads, but the leads you do get will be more valuable.

The geographic sweet spot:

Most HVAC contractors find their optimal service radius is 15-25 miles from their location. Beyond that, drive time eats into profitability and you’re competing with contractors who are closer to the customer.

According to data from ServiceTitan, jobs within 10 miles of your location typically have 23% higher profit margins than jobs 25+ miles away simply due to reduced travel time and fuel costs.

Adjust your LSA service area quarterly based on where you’re actually booking and completing profitable work.

Strategy #3: Optimize Your Weekly Budget Strategically

Your weekly budget controls how many leads Google sends your way, but most contractors set it once and forget it.

Smart budget management means adjusting based on:

Seasonal demand fluctuations – Increase your budget before peak season (summer for cooling, winter for heating) when customer intent is highest and leads convert better. Reduce it during shoulder seasons when people are less likely to need emergency service.

Your current capacity – If your schedule is packed for the next two weeks, lower your budget temporarily. Why pay for leads you can’t service quickly? Conversely, if you have availability, increase your budget to fill those gaps.

Day of week patterns – Review your lead data to see which days produce the best quality leads. Many contractors find weekday leads convert better than weekend leads. Consider reducing your weekend budget if that matches your experience.

Your booking rate – If you’re converting 40% of leads, you can afford to spend more. If you’re only converting 15%, pause and fix your conversion problems before throwing more money at lead generation.

Start with a conservative weekly budget (maybe $200-$300) and increase by 20-30% each week until you find your sweet spot where you’re getting quality leads without overwhelming your capacity.

Strategy #4: Maximize Your Review Score

Your Google review rating is the single biggest factor affecting your LSA performance that you can actually control.

Google uses reviews to determine your ad rank. Higher ratings mean better ad positioning, more visibility, and ultimately more leads at a lower effective cost because you’re showing up in front of more potential customers.

The math is simple: if you’re paying $40 per lead but only showing for 50% of relevant searches because your review score is mediocre, you’re missing half the available leads. Improve your review score, show for 80% of searches, and your effective cost per opportunity drops significantly.

Review benchmarks that matter:

• 4.5+ stars: Excellent positioning, maximum visibility
• 4.0-4.4 stars: Average positioning, moderate visibility
• Below 4.0 stars: Poor positioning, limited visibility

According to BrightLocal’s research, 77% of consumers won’t consider a business with less than a 4-star rating, so your review score affects both your LSA performance and your overall conversion rate.

Building your review score systematically:

Create a review generation system that runs automatically after every completed job:

1. Send a text message within 2 hours of job completion thanking the customer
2. Follow up 24 hours later with an email including a direct link to your Google Business Profile review page
3. Train technicians to ask satisfied customers for reviews before they leave the job site
4. Make it ridiculously easy by providing a QR code that goes straight to your review page

Aim to collect 3-5 new reviews per week. This consistent flow of fresh reviews signals to Google that your business is active and maintaining high customer satisfaction.

For a complete guide on improving your Google rankings and review strategy, check out our article on how HVAC companies can rank #1 on Google.

Strategy #5: Respond to Every Lead Within Minutes

Your response time directly impacts both your conversion rate and your LSA costs.

Google tracks how quickly you respond to leads and factors this into your ad rank. Contractors who consistently respond within 5 minutes get better positioning than those who take hours to follow up.

Better positioning means more leads at the same budget, which effectively reduces your cost per lead.

But response time matters beyond just Google’s algorithm. Harvard Business Review found that companies who contacted leads within 5 minutes were 100 times more likely to connect than those who waited 30 minutes.

Think about it from the customer’s perspective: their AC just died in the middle of summer. They need help now. They’re calling multiple contractors, and whoever answers first with a helpful attitude often wins the job.

Setting up for rapid response:

• Enable call forwarding so LSA calls ring multiple phones (office, mobile, tech line)
• Use call routing rules to ensure someone always answers during business hours
• Set up auto-reply text messages for after-hours leads: “Thanks for contacting [Your Company]. We received your request and will call you first thing tomorrow morning at [time].”
• Assign backup responders for when your primary contact is unavailable

If you’re getting leads but struggling to convert them, the problem might not be lead quality. It might be that competitors are simply answering faster. Speed wins in service businesses.

Strategy #6: Pause When You’re Fully Booked

This sounds obvious, but you’d be surprised how many contractors keep their LSA ads running even when they’re booked solid for weeks.

If you can’t service new customers for 10-14 days, pause your ads temporarily. Every lead you pay for but can’t service quickly is wasted money, and those frustrated customers will leave negative reviews that hurt your long-term performance.

Google makes it easy to pause and resume your ads. You can do it right from the Local Services app on your phone in under 30 seconds.

When to pause your ads:

• You’re fully booked for more than 5 business days
• You’re short-staffed due to vacations, illness, or hiring challenges
• You’re dealing with an unexpected crisis that’s consuming all your attention
• Your top technicians are unavailable and you can’t maintain service quality

When to resume:

• Your schedule has openings in the next 2-3 days
• You’ve hired additional technicians and can handle more volume
• You’re entering slow season and need to fill your calendar

Think of your LSA budget as a faucet you can turn on and off based on capacity. This level of control is one of LSA’s biggest advantages over traditional advertising.

Strategy #7: Get Granular With Service Categories

Google Local Service Ads let you choose which specific services you want to receive leads for. Most contractors select everything they’re licensed to do, which leads to getting calls for services that aren’t profitable or that they don’t really want to focus on.

Take time to evaluate which services actually make you money and which ones are time-wasters.

For example, maybe you get a lot of leads for duct cleaning at $30 per lead, but your duct cleaning conversion rate is only 10% because homeowners are extremely price-sensitive about this service. Meanwhile, your AC repair leads cost $45 but convert at 35% because people need immediate help.

Do the math:

• Duct cleaning: $30 per lead ÷ 10% conversion = $300 cost per customer
• AC repair: $45 per lead ÷ 35% conversion = $129 cost per customer

In this scenario, you should pause duct cleaning leads and focus your budget on AC repair, even though each individual lead costs more.

Review your service category performance monthly and adjust based on:

• Conversion rates by service type
• Average job value by service type
• Profit margin by service type
• Technician preference and expertise

Focus on your most profitable services and pause the rest. You can always turn them back on if you need to fill capacity during slow periods.

Strategy #8: Monitor and Adjust Message Lead Settings

LSA offers two types of leads: phone calls and message leads. Message leads are when customers text you through the platform rather than calling.

Message leads typically cost less than phone leads, but they also typically convert at lower rates because there’s less urgency and more friction in the communication process.

Some contractors find message leads work great for maintenance and non-emergency services. Others find they’re mostly tire-kickers who never respond after the initial message.

Test message leads for your business and track the results separately from phone leads. If message leads aren’t converting well, disable them and focus exclusively on phone calls.

You can manage this setting in your Local Services dashboard under “Lead preferences.”

Strategy #9: Create a Follow-Up System for Unconverted Leads

Not every lead converts immediately, but that doesn’t mean they’re worthless. Maybe they got three quotes and went with someone else. Maybe they decided to wait until next month. Maybe they’re still researching options.

These leads already cost you money. Don’t let them go to waste.

Create a 30-60 day follow-up sequence for leads that didn’t convert:

Day 3: Send a text checking if they have any questions about your quote Week 2: Email sharing a relevant article or seasonal tip
Week 4: Call with a limited-time offer or discount Week 8: Final follow-up asking if they still need service

According to data from the National Sales Executive Association, 80% of sales require five follow-up calls after the initial contact, yet 44% of salespeople give up after just one follow-up.

Your competitors probably aren’t following up either, which means you can win business they’ve already given up on. Even if you convert just 5-10% of these dormant leads, that significantly reduces your effective cost per customer.

For detailed strategies on converting more leads into customers, read our comprehensive guide on HVAC lead generation strategies.

Tracking Your Progress: Metrics That Matter

You can’t optimize what you don’t measure. Track these key performance indicators weekly:

Cost per lead – Total LSA spending ÷ Number of leads received Lead quality score – Percentage of leads that were legitimate and in your service area Response time – Average time between lead received and first contact
Conversion rate – Leads that became booked jobs ÷ Total leads Cost per customer – Total LSA spending ÷ Number of booked jobs Customer lifetime value – To determine if your acquisition costs make sense long-term

Set up a simple spreadsheet or use your CRM to track these metrics. Review them every Monday morning and make adjustments based on what you’re seeing.

If your cost per lead is increasing, check your review score and response time. If your conversion rate is dropping, analyze whether lead quality has declined or if your sales process needs work.

The Bottom Line: Lower Costs, Better Results

Reducing your Google Local Service Ads costs isn’t about cutting corners. It’s about being strategic with every dollar you spend.

The contractors who get the best ROI from LSA aren’t necessarily spending less. They’re spending smarter. They’re disputing invalid leads, optimizing their service areas, maintaining excellent reviews, and responding to every inquiry within minutes.

Implement the strategies in this article and you should see your cost per lead drop by 20-40% within 60-90 days, while your lead quality and conversion rates actually improve.

But here’s the reality: managing LSA campaigns properly takes time and expertise. You need to monitor performance daily, make constant adjustments, and stay on top of Google’s frequent platform changes.

Most HVAC business owners don’t have time for that level of hands-on management. You’re running service calls, managing technicians, handling customer issues, and dealing with the hundred other things that come up every day.

That’s exactly why HVAC DM exists. We manage Local Service Ads campaigns for HVAC contractors across the country, and we know every optimization trick that reduces costs while improving results.

We’ll audit your current LSA performance, identify exactly where you’re wasting money, and implement a proven system that maximizes your ROI.

Schedule a free strategy call today and let’s discuss how we can cut your LSA costs while getting you more qualified leads. Stop overpaying for leads that don’t convert. Let’s make every dollar in your marketing budget work harder for your business.