Lead Company Issues

Lead Guy

I am the owner of a small home imp lead company. I got my start at one of the 'big 3' and quit about 2 years ago. Most of the threads I read about them are absolutely true. I have seen it all first hand, and thinking about it makes me want to puke. I will keep them annoymous because I am not in the business of slandering anyones company.

Here is one thing that really gets to me:
The excuse that most of you have seemed to buy in to 'people fill out more then one form on more then one website'. This is complete garbage. The lead companies have been using this excuse forever because none of them want you to know the truth. The truth is that all lead companies that use this excuse because they are buying or swapping leads with other lead companies. A customer will occaisionally go to more then one website, but it is quite rare. Think about it.. if a lead company delivers their lead to their contractors and then swap that lead with another lead company, it cuts their lead cost in half. I have been approached by at least 10 different companies to do some form of this swapping. I have declined every time. Believe that!

The reason for this post is to try to find a way to give the contractor what they want, without losing my shirt in the process.

I have tried the percentage of job sold system. It seems like a win-win in theory.The problem is I have had contractors land a job, and not admit to it (I have called the homeowner and busted the contractor). I have no protection and the only thing I can do is kick them out of my network and I have paid for all of the leads with nothing to show for it.

I have pitched the AdWords management idea. Contractors seem very receptive to it. The problem is the cost. Most contractor websites need major redesigns in order for the advertising to work. At the very least they need some new landing pages added to their site. To design pages, create a geo targeted campaign, and manage it for the first month costs between $1500-$2500 before a dollar is spent on the actual advertising. Most contractors dont have this kind of cash. Plus there is no guarantee on volume or lead cost. It all depends on the service area and job type they do.

My current pricing structure is like most: I have prepaid lead packages and monthly packages with returns on leads. I dont really like it, but I cant seem to find another way that works for both sides. I dont swap or buy leads from anyone (they are 100% PPC) but I need to sell them 2-3 times to make a profit. This means the contractors that dont land the job will not be happy.

The truth is we need something new. I have been through a lot of threads on this site trying to find some new ideas, and all I can find is what contractors dont like. Any good ideas of new ways that would work for both contractor and lead company???

NormW

Well I'm glad the guy on the other side of the fence wants to puke too... all of a sudden I'm thinking maybe someone over there is human.

I've never used a referral service, my stomach gives out too soon.

I think the best recommendation I have is: Have the customer, pay a fee, to list his job.

I Know, your only going to get a fraction of the volume in leads. But those leads will be worth far more... I might even be dumb enough to purchase a couple... curious...

As far as re-selling leads... ... that's how they are killing, not only their own businesses, but, the whole industry.

Lead Guy

Not a bad idea. It would be really tough to make the cost work there. I would have to charge $100-$300 per lead and I would assume contractors would not want to pay that much for a lead.

You are exactly right about the re-selling. It is common practice. I dont think its any way to do business and its too bad that all lead companies (like myself) have to take heat for ALL lead companies doing this. Not all of them do this, just a large majority. It sucks for the homeowner and the contractor. No one wins when lead companies do this.

Mike Finley

Real simple.

Sell the lead one time to the highest bidder.

You can't do it cause the online lead business model can't survive without all the hocus pokus crap that goes on.

A market driven model like selling it one time to the highest bidder will set the real value of all leads, and the cat will be out of the bag what a lead is actually worth.

But if you want the solution to a fair and viable market driven approach it's very simple.

Sell the lead one time to the highest bidder.

Bill Z

Even more simple, remove yourself from the equation altogether.

I have no need for leads drummed up by someone else. Lead companies are the unnecessary middlemen that feed off the fat of the land and create an environment where price becomes more of a factor than trust and quality.

Nothing personal, I'm sure you are a nice guy trying to make a living, but if the day ever comes when I need leads from companies that have nothing to do with the product or service, that's the day I hang it up.

rispgiu

Here is a breakdown of the program:
Yellowpages.com: $373 mo. (includes Slide Show video)Ft. Worth Metro Zone; Arlington, Northeast Tarrant County, Ft. Worth,& HEB
Categories:Altering & Remodeling Contractors, Tile Contractors, Painting Contractors, Kitchen Planning & RemodelingService, & Bathroom Remodeling.
Billing would start once the ad went liveon Yellowpages.comin about 2-4 weeks.
(see attachment)
<<ad tracker.pdf>>
90 Guarantee Click package:$320 mo.billing would start once it goes live on Google and Yahoo which typically takes a minimum of 45 days.
Thanks,

rispgiu

Has anybody ever worked with yellowpages. This is what Im being offered

Lead Guy

This is a great response. It is doable. I can tell you that it costs in the 30-40 dollar range to generate home imp leads in general. That is where the bidding would need to start with that model. Also, we could not do returns on leads-- you would have to just suck it up on the shoppers, and people that decide not to use you. You are correct that this would help to determine the 'real' value. If a leads value is not worth more then the 30-40 being paid, it most definitely would not work and nothing changes.

The only issue in my opinion would be the time factor. If I wait a day or two for contractors to bid on a lead, it could go cold. The reason these people go to the internet to submit their info is for the instant gratification. A day or two without contact is like a lifetime.

What would you think about just selling the leads exclusively for 50-60 dollars per lead? Any issues with that line of thought? I dont need to make hundreds of dollars per lead to make this model work. The toughest thing in this business is contractor retention, and Im working on finding a way to improve on that. Im sick and tired of these big lead companies swapping their leads back and forth. Its pathetic!

Lead Guy

Letting yellow pages do your advertising on Google? The ultimate lead company. lol! They charge hundreds of contractors hundreds of dollars a month and show an ad on your behalf on Google once and a while. When they click on that ad, it doesnt go directly to YOUR site, it goes to some yellow pages site page with other companies besides you. Why not save the 45 days- of paying for nothing and set something up for yourself and run ads in a couple of days. Or go straight to the source (Yahoo or Google and get yourself in their local directiories if you want use your money like that. Id love to hear if anyone has success with yellow pages ads.

festerized

Becareful of Online Yellow Pages Group, they contacted me about 4 months ago to extend my yellow pages advertising
Here is the glitch, i had a one year contract with Yellow pages.com
This company miss led me to belive they where the same company and if i wanted to extended my service at a cheaper price, since i did not want to renew my contract, the woman i spoke to, spoke in broken english, which should have raised a red flag, DUMB DUMB Im learning.
Got to go EVERYCONTRACTOR.COM is calling again, lol
No need to slap me on the back of the head on this one, its a no brainer thanks to ll the threads,
PS Good thing i had my waiters on, the crap is getting deep in here

handyhands

Yes.


Yellowpages.com sucks better than Jenna Jamison.

BKFranks

LOL!

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rispgiu

Well I didn`t think was a good idea, since for starter I personally never use yellowpages for my personal listings. I already run a google ad campaign, the only thing that is very frustrating is all of those SEO companies and lead generators, do a search on google, click on my ad and then call me to try and sell me something

Mike Finley

Putting in a reserve negates the whole premise of the market determining the true value of the lead.

Like I said, you can't do it cause the entire online lead thing is all smoke an mirrors. See how on your very first step in the right direction you've already stumbled?

You shouldn't be doing returns those leads in the first place, those are legitimate leads. You need to do returns on illegitmate leads.

Why would there be any delay whether they were bid on or done the way all lead serviced to it now?

Again, the stumble. Why would I want to go back to the same model that exists that is a failure?

The problem with contractor retention is the current methods are all nothing but a big scam.

Create a product that people want and retention takes care of itsself. Lack of retention is symptom of the underlying problem that the product sucks.

nlgutters

The company i'm gonna start up with after the first of the year is diffrent. They build landing pages and put up a bunch of sites that look like yours just have a special email address and phone #. They do some other online marketing to generate leads as well.

They are $90 per lead. Its cheaper than what i pay per lead.

__________________
www.nlseamlessgutters.com

tinner666

Then maybe you need to work on your SEO and you can drop the adwords?

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Frank Slate Roof Repairs, Richmond, Va.

Lead Guy

A home improvement lead is a product that people want and need. There is no 'stumble'. If I pay a certain cost to generate a lead, and sell it for less (without a reserve of some kind), that is just plain bad business. Why would I take a loss? I wouldnt be in business long if I sold my product for less then I bought it for. Isnt that the most basic rule of business??

Im not sure what the 'big scam' is. I know more then anyone what these lead companies do. They do unnecessary things to try to make a few extra bucks. You have exposed them all here in these many threads. I dont do those things. I dont scam anyone, and dont plan to. Not everyone is out to scam you. It may be hard to believe but it is possible to run a legit lead business.

I advertise on Google (like anyone can), and try to find good leads at a good cost, and sell them to my contractors. Where is the 'scam' in that? The only thing stopping the contractors from advertising the same way I do, is the lack of AdWords knowledge.

I dont install toilets because I might mess something up. I dont have the knowledge or training. I call a master toilet pro like yourself. Not that I couldnt figure it out, I would just prefer to have my toilet functioning properly the first time. Same thing with the leads. People work with the lead companies because they cant get the same results from their own advertising efforts as we can, or maybe they just need more leads.

Try advertising for yourself but dont be surprised if you have a 'leaky toilet' when you start it up. Thats why I do what I do, I know the online advertising game better then most and thats my 'labor/installation' (lead)cost. I have the proper training and experience and expect to be paid for it, same as you expect to be paid for your toilet installs.

Thanks for the input, but I dont think this is going to be much help.

rispgiu

Have you tried, does it really work as good as they say? and how much did you pay

Lead Guy

Yeah, sign up with them. Yellow pages offers a kick ass service. You will get so many jobs youll do millions of dollars in new sales in no time. Good luck buddy!
Thanks for contributing to my thread!

Lead Guy

Ill bet you are one of the lucky ones that only works on referrals, right? No yellow pages, home shows, newspaper ads?? Nothing?