Don’t Fall for the Driver Recruiting Placebo Effect

WebMD Placebo Definition
According to WebMD, a placebo is anything that seems to be a “real” medical treatment — but isn’t. It could be a pill, a shot, or some other type of “fake” treatment. What all placebos have in common is that they do not contain an active substance meant to affect health.

The classic example of a placebo I’m sure we’re all familiar with is the sugar pill. The patient is unknowingly given a sugar pill as medication for whatever ails them and they start to feel better. The “medication” itself did nothing, but the patient whole-heartedly believed it would fix their problem and low and behold their condition improves.

By now you are probably asking yourself what does any of this have to do with driver recruiting? Well medically, nothing. However, I believe that the principle of the placebo effect is something that we can learn from and apply to the topic. What do I mean?

What is the Driver Recruiting Placebo Effect?

What do I mean by a driver recruiting placebo? The main point I mean to make here is you can’t let your fleet fall into the trap of focusing solely on cost. Far too often we see fleets zero in on pursuing cheap leads. Cheaper leads = cheaper hires, right? Much like the patient downing sugar pills, fleets see low CPL and start to feel pretty good about their recruiting and never really dig into the other recruiting cost factors.

It may make you feel better to focus on the methods or vendors with the lowest cost-per-lead, but saving money by going for the cheapest leads doesn’t guarantee your fleet will have the quality hires you need and could cost you more in the long run.

What Does the Data Say?

Our hive of data-loving, number crunching, math whizzes set out to see if CPL really should be the go-to metric fleets rely on. They followed and compared 600 campaigns over 6 months and found that CPL and CPH had practically zero correlation. Yes, you read that correctly. The cost of leads has no correlation to the final cost of hires. I know it sounds contradictory, but it’s true. The numbers don’t lie.

Translation: Your CPL Does NOT Affect Overall CPH

Our data shows the cost of leads (high or low) doesn’t affect your overall cost-per-hire. Gobbling up the cheapest leads will not lead to getting the cheapest hires. But if the CPL doesn’t correlate to CPH, what does?

The biggest contributing factor they consistently saw linked to CPH was a fleet’s lead-to-hire ratio (how many leads you to need to generate to result in a hire). Meaning improving your lead-to-hire ratio (lowering the number of leads needed to result in a hire) is the most effective way to reduce your overall CPH.

What’s the Best Way to Lower LTH?

Now that I’ve told you LTH ratio is the best way to reduce CPH I can already hear you asking, “how do I do that?” This is where it really does all come down to your specific fleet. To lower your LTH you need to play to your strengths. What types of leads does your recruiting team handle best? Short forms? Long forms? Phone calls? Whatever the answer is…you need to do what you can to generate more of those leads.

2020 LTH Data

So, how do the different lead types stack up when it comes to hiring ratios? Here’s a breakdown of the data we’ve collected this year as compiled in Randall-Reilly’s LeadMatch.

Unique Phone Calls vs. Forms

  • Phone Call LTH Ratio – 59:1
  • Form LTH Ratio – 50:1

Multi-Carrier Leads

  • Total Hire LTH Ratio – 96:1
  • Phone Call LTH Ratio – 136:1
  • Form LTH Ratio – 91:1

* One thing to note is in compiling our LTH data for phone calls, our team focuses on unique hire and lead rates. This number changes when taking all calls into account as most drivers who call typically call multiple times before being hired. Unique hires/leads are measured and displayed to maintain continuity and ease of use within LeadMatch.

While this is what we see, remember every fleet is different, and your recruiters may have a different skill set. If you’re not quite sure what lead type your fleet works best you can use the worksheet below to help you work through it.

Simply fill it out and see where you stand. Are you focusing your efforts on the lead type your team converts best?
RR LTH Worksheet
Once you start to pursue a specific lead type you can tailor your recruiting strategy to take full advantage of all the channels available to you. For instance, if your team is strongest with short forms, you would want to make sure you are spending money on channels that generate short forms.

Targeting the lead types that give your fleet the best LTH ratio through the channels that deliver those leads allows you to allocate spend efficiently and provide more of the leads that convert to your team.

You also need to take your recruiters and their productivity into account. Even if they work short forms the best, you can’t overwhelm them or their LTH ratio may get worse! Our research tells us that for your recruiters to be as effective as possible the optimal number of leads per recruiter per month is 450-600. This number, the number of leads per recruiter is crucial and ends up having the strongest correlation to your LTH ratio. Any fewer and they won’t have enough to keep them busy, but any more and you run the risk of bogging them down and inflating your LTH.

Focusing on the right lead types through the right channels is a huge component to lowering the all-important LTH ratio.

I’m not saying CPL is a useless or meaningless metric. It is something you should monitor, however, CPL should never be the primary deciding factor when it comes down to how you allocate your recruiting spend.

Data, Driver Recruiting, and You

If you don’t have a way to track these interactions accurately you’re setting yourself up for failure. An ATS like Randall-Reilly’s all-new Stratas equips you with all the tools you need to contact and hire the best quality drivers for your fleet all from within the ATS itself.

If you’ve decided to go for it without an ATS (which I highly discourage) or you’re already set in that department, but are interested in digging a little deeper into some different metrics and a new way to look at how you understand leads, like the previously mentioned cost-per-lead and lead-to-hire correlation with CPH data, check out the premiere episode of our new video series, Digging Deeper into Driver Recruiting with Dave (see what I did with the digging in thing there?).

In any case, whatever you do, please resist the urge to fall for the driver recruiting placebo. It may give you those warm fuzzies inside to see that low CPL, but blindly basing your recruiting on that number is not actually curing what ales you. While important, CPL is not the magic bullet to sink all of your time and energy into, but rather one aspect of a multi-faceted process.