SERVICE MAGIC Now The Rest Of The Story

Mike Finley

Wouldn't that be solved pretty quickly if for instance fictitious online lead service XYZ said -

We are going to actually qualify contractors -

Require 3 years in business.
Require License, GL, WC proof
Did a back ground check (make contractor pay for it) (redo this back ground check every year)
Include a binding arbitration clause for disputes to be resolved through the lead service, for any job the contractor accepts from the lead service giving the homeowner a venue for disputes and therefore demonstrate the lead services commitment to providing good quality job completions for the consumer.

Charge a small fee $5.00 for every "bid" they want to recieve when a consumer to submits a project. You want 1 bid. $5.00. You want 10 bids? $50.00

Include an agreement with the contractor that the winning contractor will reimburse the homeowner the total submittal fee upon award of the job.

And then simply advertise we offer pre-screened contractors. We really have pre-screened contractors, and yes it does cost you a paltry $5.00 to submit a project for every bid you want upon time of submital, but whomever you award the job will reimburse you the fees.

Now F'n hard would that be?

A real product to advertise to consumers. A real product for contractors. $5.00 a bid would eliminate at least 75% of the sh*tty leads.

Well, you'll never see this model, because logically it makes sense but THE DIRTY SECRET OF THE LEAD BUSINESS is they can't make money with this model, because if they eliminate 75% of the sh*tty leads, they eliminate 75% of the leads they make money from by contractors buying them!

The model is flawed boys. Logic dictates the correct way to do it, but it can't be done because the game is jacked from the beginning. It's all smoke and mirrors. The BS leads make online lead services money! They can't survive without them.

J F

Exactly. It would be real interesting to see the real numbers regarding what percent of sold leads actually turn into sold projects...and how many times each lead is bought and sold.

Never gonna happen though... as it would expose the farce.

Whatchya think...1000 leads .... sold 4000 times (or more?) turning into 100-200 legitimate projects sold...it would be nice to know the real #'s.

silvertree

We'll see.

The big thing for me is how much service I give my customers and how little I challenge them if they have an issue. I don't roll over for them but I take every concern and treat them with respect, even when they are wrong.

That makes me a bad businessman in some regards, but a good man in other ways.

In regards to percent of SM leads sold or turned into jobs, they do have a number I think. Maybe the SM guy could post the numbers they use since he is reading this thread.

I think the best thing SM could do (besides addressing our issues) is to put a PDF document online with a guide to best practices when using their system. So my question now is, why hasn't this been done from the start. You buy a can of Campbells soup and get instructions, why not for an item that costs much more and is more complicated to use properly?

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Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

J F

I've also got to wonder how much your experience will mirror the "average" SM contractor-client's, seeing as how sm knows your experience will be under the magnifying glass.

You should contact another member here who would be willing to be the "control" part of the equation (without sm knowing) to see how your two experiences differ (or not)...that would more than likely illustrate a more "real" sm experience.

THEHANDYMAN

Reading what you say, it seems you think all contractors need a baby sitter. Why would SM want to take on the mediator thing, contractor should beable to settle his own disputes. BBB duz this you need a moderator sign up with them, they are useless and have no power for any thing. Sm or any other lead gen only provides the leads what we do with them is up to us. Do you have some one that mediates a problem when you get a referal from a previous customer do they step in? I see no difference. If you paid some kid to dance around on the street corner carrying a sign that lead ppl to you would you expect the same of him.

We are adults we should act like adults we are for the most part trained professional, for me I don't need a baby stter I am more than capable of doing what is required. If custoer is worried let them do what ever checking that they feel they need done. I have had ppl ask about my insurance but other than that most don't ask any thing.

DavidC

Maybe yes, maybe no. Finley outlined a plan that would make the lead services more attractive in my opinion. Logic should follow that better leads would have a higher perceived value and should support a higher sales point. Increased price plus the lead generator retains the $5 per requested bid the customer is charged should offset some of the revenue loss resulting from actually screening the prospects.

In addition the lead generator would most likely experience far fewer customer complaints from both sides of the fence. That should reduce overhead by not having to pay some one to handle those complaints. Personnel could be reassigned to more productive tasks such as sales or removed from the payroll, either increasing sales or reducing costs.

Only the winning contractor would reimburse the consumer for their bid fees, a minor impact on the contractors overhead. I'd be OK with a flat $50 reimbursement regardless of the number of bids received as long as it's contingent on signing a contract. It would fit remodeling well, handyman leads maybe not so much given the size of their average jobs.

And Silvertree should be commended for taking his valuable time to be our sacrificial lamb. Unfortunately he is a prominent contributor in a largely anti-SM thread. If his experiment goes awry all of the naysayers (myself among them) will feel justified in their opinions. If the outcome is more positive for SM than the results are automatically suspect because it would make sense for him to receive preferential treatment in the hope of saving face. Nice idea but I don't see how SM could win here.

Good Luck
Dave

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THEHANDYMAN

What I see wrong with the reimbursement thing is that many customers have other contractors that they have contacted some how. Who are also bidding on the job, in my experience anyway. If you advertise in newspaper or yellow pages, they could careless who you are or any thing to do with your background or experience. Just pay your bill and they are happy BUYER BE WARE!

DavidC

I think it's more a quality control and customer service. Providing binding arbitration as part of their service demonstrates service after the sale. Hopefully it's never needed. As my attorney says, a properly executed contract is a waste of paper. Its in place for the odd occasion when someone doesn't live up to their side of the bargain.

I will state that SM asked for proof of insurance when I first signed up with them. It was provided although my profile never showed we had WC even though we did. When the certs expired they requested new certs or they would have to suspend my account until provided. I couldn't see them turning down our lead fees and decided to delay the certs to find out. I never provided a new certificate for the 3-4 years I was with them. Our account was not suspended by them, ever. SMSupport can verify this if he wishes.

How can they honestly claim I was screened? Do they need a babysitter?

What Mike is talking about (according to Dave) is improving the quality and value of the leads provided. I would add that we got enough sales to recoup our costs while with them until the economy tanked. Where they lost me was their customer service for the one side providing the cash flow does not match what we provide to our customers. The main reason their customer service is ever questioned is based in the quality of their leads.

Good Luck
Dave

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www.CookContractingLLC.com

DavidC

Before responding I will report a PM rec'd. from SMSupport.

Shawn contacted me to say that SM has my ins. certs. on file via contacting my insurance company. I can't accurately say that he is wrong. I can say that we have a copy on file of every certificate we requested because the agent sends them to verify the client was sent one. We have no copies of certificates sent to SM other than the original that I requested.

I'll give SM the benefit of the doubt.

The reimbursment idea would actually give the client incentive to select form the list provided by the lead generator. If they choose from another source there is no reimbursement.

The main difference here is that by placing an ad anywhere you are actively soliciting customers to call your number in hopes of providing them a service for your mutual benefit. Lead generators on the other hand are soliciting the same customers to call THEIR number to pass on the contact to you AND your competition for a fee from all of you.

The newspaper or YP aren't claiming to connect the consumer with prescreened contractors. They in effect are saying, here's a list of contractors that paid (implied) to have us list their name and number. The consumer decides who to call.

The lead generators are claiming to have a list of properly screened contractors. The implication is that they will make certain the contractor is qualified, licensed and insured. They advertise the service as free but neglect to mention that the contractors pay for the contact info. Yet one company eagerly solicits a confessed felon wearing an ankle braclet while under house arrest for swindling consumers. (not SM)

Aside from that, the constant recurrance and length of these threads about internet lead generators indicates that there is a ready market for a business to supply real quality leads to benefit both the consumer and the contractor. We aren't all marketing gurus or website savy. I think Finley should fine tune his plan and start seeking investors

Good Luck
Dave

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Crock

that tickled my funnybone.

rbsremodeling

Do you think silvertree is wearing a blinged out home monitor ankle bracelet?

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Mike Finley

You are missing the point.

It's not about babysitting it's about a lead service having a value to a consumer other than providing a low price through bidding wars.

When this online lead service stuff all started long ago it was about providing consumers with qualified safe contractors, it made sense then, they were a source to help consumers navigate the dangerous contracting waters.

Unfortunatelly the big money wasn't there for the lead services so it has evolved now to just pimping the contractors and generating as many consumer lead inquires as possible and there is a bigger attraction for consumers to be seduced by getting low prices than qualified safe contractors.

People who want bonafide qualified trust worth contractors are higher quality leads, but there is less of them.

People who just want a a-hole to install a screen door, just do it at the lowest possible price are plentiful.

So if you are a multi-million dollar operation where is the money at? It ain't with the first group, it's with the 2nd group of consumers. Hence - you get all the issues you have today. This is why I keep saying over and over again that this is all smoke and mirrors, the online lead service business model is broken. They cannot provide high quality leads and make a profit.

The nature of the finances dictates they must generate quantity over quality and they must leverage that initial quantity by mutiplying it by selling leads whether good or bad quality over and over again, and must further increase their gross lead numbers by having as low a threshold as they can get away with to what qualifies as a real lead or not.

In regard to binding arbritration, that is nothing. What about it?

I've got arrangements like that already with marketing souces I use and its no big deal, but those lead sources are about consumers wanting a great remodeling experience, not wanting 10 contractors to fight over their project, so in order to be part of those sources you have to actually be somebody and be scrutinized to be on the list. The leads we get from them are worth there weight in gold.

By the way, you're a handyman, customers exposure to you financially is pretty limited compared to $50,000 remodel projects so of course I'm sure you don't get many inquiries into your back ground. That's simply the nature of the handyman business. Service businesses are much the same, as are repair businesses. Somebody needs somebody to snake a drain for $90.00 they aren't very worried about much other than how fast they can get there.

I'm in no way trying to insinuate anything about your professionalism in being in the handyman business. Just pointing out that in different aspects of home improvement we all have different customer expectations, experiences and issues.

Ed the Roofer

My thoughts exactly.

I didn't want to jump in a attempt to burst the bubble, and I also think thay Paul is extremely sharp enough to see if he is being handed a golden cow that no other contractor receives.

Yes, I see too much potential for the results being skewed without a Multiple Blind Testing Sampling.

I suppose that the SM call to Paul went something like this.....


SM Guy:
Paul, here is the deal. You try out our service this time as a newly signed up contractor and we will offer you the leads for free for a set period of time.

If they are substantiated by you as being valid qualified leads, then maybe you can pay for the leads if you want, or else we will just comp them to you for doing such a thorough testing of our service.

How does that sound Paul?


Paul:
I want to make sure that the lead sampling that I get fed to me are the same as if we were not doing any write up on the results. No hanky panky, okay?

SMGuy:
Don't worry about that Paul. You are getting entered into our contractor data base just the same as any other new contractor.

Paul:
Okay, I will test it out and report my honest feedback of the results, so watch out what you wish for. You may not like the results.

SMGuy:
Fine. But, you have to follow our instructions precisely. When you get contacted, you need to follow up within minutes and set the appointment. Are you okay with that?

Paul:
Sounds reasonable. But, how will I know that I am not getting any special leads spoon fed to me to distort the personal results?

SMGuy:
You will just be entered into the system, just like any other contractor, but if you have any questions, I will be available to take any of your calls.



So, how does anyone really know if the leads are not going to be more pure than what a contractor would normally receive?

I suggest, either/or, that along with Pauls sampling, that several other "Anonymous" contractors submit to the service and provide authentication of the results, WITHOUT any liason from SM being involved.

To make it desireable to contractors to sign up with them for this testing period for evaluation, I further suggest that an impartial objective party from this forum ONLY be the one who knows which contractors have signed up, so that SM does not have the opportunity to skew the leads provided for a more favorable outcome on the results.

Only after the results are recorded and provided, should the names of the Contractors be disclosed.

To entice several contractors to follow through properly, SM will reimburse them for any lead fees that they paid, after the reports are made available for public scrutiny, regardless of their results.

It would be Blind Testing and also encourage some contractors to review the offerings of this service and the lead reimbursement costs would be minimal for the IAC corporation to digest and compensate the contractors for their efforts.

How does that sound for being scrutinized more fairly?

Ed

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silvertree

Me and SM and the test,

There is no way SM will tie me into this. First of all it won't be me, it will be another contractor from the East Coast, maybe West Coast, maybe Altoona, Pittsburgh, Aberdeen, Fargo, Long Island or Youngstown.

One of those areas or Reno?

Golden Cow? I'm not playing around here, and I want to be able to report a real experience.
I have a list of all the states where you can record phone conversations, emails are legal to keep as records. Nope, I don't think I will get preferential treatment, nor do I think SM has the time to hand me a platter of only good stuff. I think this will work out to be a small but honest sample and I don't think I need a lot of tests.

As a group we have clout, don't think otherwise. Collectively we number 40,000 watchers and contributors who talk to friends and fellow professionals. Think about that, you have more influence than you give yourself credit for.

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Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

silvertree

Ed, that's a good idea, I could use some help with this.

Actually, you and Finley hit on some good points.

__________________
Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

THEHANDYMAN

No offence taken at remarks about HM I understand where I am at on the TOTEM POLE. Many of you make a month what I make in a year. But I am happy right where I am, I am doing exactly what I want to do.

We are Independant Contractors we run our own companies and are free to do it how ever we see fit. How is a Lead servie going to provide BINDING ARBITRATION? How do they make sure a lead is a quality lead? What is a quality lead? That consumer on the phone can lie as well as the contractors that they talk to. It's a big game you have to play it to the best of your ability. All the lead service do is provide you with a consumer that is looking for you, what you do from then on is your responeability. You can sign in under a phony name list your business under a phony name and who knows any thing different? You start charging the consumer for the leads with a chance for a refund if they buy from the right contractor, is not a good idea the amount of leads will fall considerable. Suppose customer X gets 10 leads yet hires another contractor from outside SM, they then are out the $50. Yes it may push them to select a SM contractor but also may not be the best choice for them. Would I rather consumer pay rather than me YOU BET YOUR SWEET BIFFY.

MALCO.New.York

It was a SALES PRESENTATION.

They did their job EXCEPTIONALLY well! The Grease before the Reaming!

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DavidC

Now that's funny, somebody lying better than a contractor. Ha !
Next you'll claim we can spell. :>)

Good Luck
Dave

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silvertree

Handyman, I have to give you credit for taking a lickin and still keepin tickin.

In regards to your success I think many of us do respect the fact you are the Master of your domain. This is a heated issue and with good reason.
In defense to handymen everywhere; the best guy that ever worked for me by far, was a handyman. He could frame, finish and do many things well. When we needed some welding done quickly he did that too, plus he ran moldings for us. He was the best.

Its hard to get respect from people just for being a tradesman, so instead of playing around with that let me be on record saying I believe you are a professional, I want to leave it at that. This is a Service Magic thread and not a handyman qualification exam.

As for SM and the success it has brought you, why would anyone wish you other than well? Sure we have some anger and suspicions directed at LGS's, but that's another story so I keep that separate from my postings with you.

__________________
Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

Mike Finley

Arbitration is just an agreement between 2 parties in a transaction to agree to how a dispute would be resolved. Anybody can be an arbitrator. You could sign an agreement with a customer that if there is a dispute between you during the project that the 12 year old kid down the street will decide the outcome.

2 things - arbitration is nothing exciting or difficult. As I said I'm in arrangements like that already, it isn't anything earthshattering. 2nd, the context is in regard to if a lead service wants to be more than just a contractor pimp there are certainly ways to show it. If they want to be a source of qualified contractors and not a source of cheap service there are methods they would employ to qualify contractors. As such they could also show intent to stand behind their advertising by following the process to the end and providing the consumer with a means of relief if their qualified contractors suddenly turn out to be not so qualified. If you look around at any source that promises consumers qualified sources to complete projects you'll quickly discover that arbitration clauses are routine. Even though it sounds like I'm a genius , I'm not coming up with any thing revolutionary here, this stuff is already in place, you just don't have any dealings with it so I guess it sounds strange to you.

Really? So if you go online and buy a new skill saw from a website and all they send you is an empty box in the mail, then I guess it's too bad? I mean you're saying it's your responsibility right? They just advertise one thing and do another, but hey, it's up to you to play the game right?


You think? For the first time buddy you're on the same page. Only thing is you need to add an adjective to your sentence -

the amount of low quality/bogus leads will fall considerably.

And that's exactly why lead services play fast and free with this, because as I"ve said many times, it's a broken business model. They say one thing and are doing another. It's quantity over quality.

I know where you are coming from. You have no experience with what the rest of us do. This just sounds so foreign to you because your situation is unique.

You are not the description of who makes up the bread and butter of lead services money for them. You are about 3 sigmas out on the bell shaped curve of their bread and butter contractor buying leads from them.

What's your monthly expense for leads? I'm guessing it's under $100 or just around that. The bread and butter lead buyer for these guys has a budget of that per day.

You don't have the same contact and experiences that those who are spending large amounts of money have so I understand why this is so strange to you.

But I can guarantee you if you came more in line with the typical user and started experiencing what everyone else does your tune would change dramatically.

Till then, be glad that you're able to get something valuable where so many others can't. But also you should try to understand that there is more going on than just the small world you are operating in with yourself and a small rural market place.

When 50 people say the same thing, they aren't in a conspiracy. They aren't making it up, and they aren't stupid and don't know how to make something work. Some of the smartest business people in the business are in this thread.