Service Magic Update

marc

OK.....it's April 21st

This month we have run 19 Sevice Magic Leads
Have only sold 1 job but it was for $35,463.......(Approx. $22K more than our average sale)

YTD.......We have run 55 Service Magic Leads
Sold 10 jobs for a total of $152,763

I don't understand why anyone would not want these leads

ProWallGuy

Marc, thanks for the info, it is priceless.
I think maybe difference between you and most others on this board is amount of $$$ available/used for marketing, advertising, and lead services.
If you have the means to dump a LOT of $$$ to the above, and you can sell jobs like you did above, then it is a win-win situation. But most here don't have that kind of $$$ to use in these areas. Most here (from what I've seen) spend maybe a couple hundred $$$ per month for these services, and the return is not the best. I know I'm a very small company, and $300 - $500 a month with no return would definitely hurt.
Kudos to you for being the successful minority in this area.

Edit: I personally dislike their sales tactics. I expressed an interest in them many months ago, and talked with one of their reps. I got the info that I inquired about, and said thanks, I'll be int touch. I nkow good sales people follow-up on their leads, but this guy has literally pummeled me with calls, emails, etc. Everytime I talk with him, I say thanks again for the info, I WILL BE IN TOUCH IF I CHOOSE TO USE YOUR SERVICE. They just don't get it. Its like spam on my cell phone 3-5 times a week.

__________________
Wallpaper Hanger St. Louis
Digital Murals Installation

Grumpy

Here is the thing... For me to run 19 actual legitimate leads I'd have to buy 30. That's my problem with Service Magic. As I have said before we do OK with their leads, slightly lower than our average closing through other sources, when we are actualy able to talk and meet with the customer. 20% is about where we are as a company with SM leads, however over all we are about 35%.

The other problem that I have is that SM used to be soooooo much better before they changed their system to auto accept. I can say that if I were in their shoes I would have done the same for the sake of profitibality. I am sure alot of the BullCrap leads were not being bought and that's lost profit for SM.

Marc, for those 19 leads you ran, how many did you actually buy? Also do you think that 1 out of 19 is a good closing percentage? How long does it usually take for your leads to close? How many of those 18 remaining leads do you expect to sell? I personally wouldn't be as happy as you seem to be with 1/19th (0.05%) closing you experienced this month. Are you happy with the overall 18% closing you are experiencing through SM leads?

AAPaint

That is an awful low closing percentage. I too have found I would only close 20% of the 50% I could get in contact with. I'm more interested in the percentage of profit left over after spending so much on leads.

One SM rep tried telling me that after spending $400 to get a sale for $3,000 that I had made 3K in profit. Talk about wierd thinking. I said, no, after all expenses, materials, salaries, etc the company actually lost money purchasing their leads. Their reasoning was that the company had gained 3K it would have never had by using their service.......well, if gaining 3K worth of work causes a $100 loss, we'd be outta business in 6 months.

__________________
-AAPaint

AA Quality Painting & Pressure Washing LLC
Jacksonville Painters
Jacksonville, FL.

marc

MARC...I'm not happy with this months results but I know that it's just a numbers game.

marc

[QUOTE=ProWallGuy]Marc, thanks for the info, it is priceless.
I think maybe difference between you and most others on this board is amount of $$$ available/used for marketing, advertising, and lead services.
If you have the means to dump a LOT of $$$ to the above, and you can sell jobs like you did above, then it is a win-win situation. But most here don't have that kind of $$$ to use in these areas. Most here (from what I've seen) spend maybe a couple hundred $$$ per month for these services, and the return is not the best. I know I'm a very small company, and $300 - $500 a month with no return would definitely hurt.
Kudos to you for being the successful minority in this area.


Every contractor should have the money. The customers pay for the marketing, NOT the contractor. If you plan on spending 10% on marketing your prices should reflect that. It's the same with your salary......Do you pay it or do your customers. Customers pay for ALL overhead. We as contractors just handle the money.

Grumpy

Hey marc, you guys don't follow up on unsold leads? I just sold one a year old because I called the guy and reminded him we estimated his roof last year. I don't consider myself to be a closer, but I sell better than most closers I know and I think primarily on the fact that I strive on the follow-up phone call.

Perhpas hire a highschool kid to follow up on old leads. I once read that it's not dead until the customer has said no to two different people. I'm not telling you how to run your business, you are obviously very successful. What I do when I hire a new salesman is put him on the old leads trying to generate business right off the bat before I give them their own new leads. Almost always they will get one or two sales. It also shows them that our sales system is built on a long term relationship and persistance.

marc

We have a sales manager that does all the rehash calls. He does them within 3 weeks of the original sales call. We also mail out second chance letters 4 times a year. This letter basically states that we have seen you in the past and prices will be going up at a certain date and that if they are still interested in doing their project, now might be the time to buy. Other than that we don't follow up. We try to stay focussed on new leads, Not old ones. We run approx. 1500 leads per year and quite frankly don't have the time to worry about old leads. Except of course December and January..........usually have the time then.
My salesmen only get one chance at selling and recieving a commision so they usually don't leave to many stones unturned.

Mike Finley

Oh my.

Grumpy

Wow Marc, you guys sound like you really know what youa re doing and I have respected many many of your posts... but I agree with Mike... Oh my!

If yout old me I only have one chance for the "one sit sale" to earn my commission I honestly don't think I would work for you, unless ofcoarse that commission on the first sit was insanely high to make up for the loss on old leads.

Some people just aren't ready to buy YET.

Kristina

THAT'S who these people are! I was wondering why I'd get 3-5 phone calls a DAY from them. Next time, leave a message.

I don't pay anyone 100s of dollars for advertising right now. We advertised a banner once on a news website. We were about to have a blizzard and they put us on the weather page because we'd get a lot of views. Umm, not ONE single lead. That was $300 down the drain.

Have you guys tried BidClerk? It's only $40 a month and you aren't doing any cold contacts, the clients post the project and you reply to them directly.

We are looking at a bathroom remodel tomorrow and have a lead on a deck.

marc

If yout old me I only have one chance for the "one sit sale" to earn my commission I honestly don't think I would work for you, unless ofcoarse that commission on the first sit was insanely high to make up for the loss on old leads.

MARC....We have 4 salesmen that all make over $100,000.00
If you know that you DON'T get a second chance......you do your best on every call. You don't skip any steps and you don't take maybe as an answer. This way you focus on the appointment your on instead of thinking ....... Well, the jones said they were definately going to buy from me next week so at least I have that commission coming. What do you think changes in a week or a month or a year besides the only thing that they remember about you is your price........Hope it's a low one.


Some people just aren't ready to buy YET.[/QUOTE]


MARC....I used to think just like you. How much does it cost you to go back a second, third or fourth time to sell a customer. This is a question that needs to be answered. If I have to go back a second time.....doesn't that take me away from a potential new customer? I can't be at both places at once and I only have so many hours in a day and so many days in a week. How much would that new customer have purchased if I could have seen them?
In my world the average price is $13,800.00
We only sell 1/3 of all our leads so the average visit cost is...$4,600.00
Now if I can run 10 new leads per week I can sell $41,400.00
But If I have to go see 4 people a second time that only leaves time to see 6 new leads per week.............Now I can only sell $27,600.00
WHY WOULD I WANT TO DO THAT???????
I'm not saying that we don't go back to see people a second, third or forth time.....WE DO, but the more people that I can get to make a decission on the first visit (When all of the information is fresh in their minds) the more money I can make.
OLD SAYING........................TIME IS MONEY
Hope this makes sense

Mike Finley

It's certainly an interesting out look on it all.

I just wonder if you don't have enough salesman to cover all the leads if they had to go look at older leads, why not hire another salesman? You have 4, at some point you had 3 and needed the forth so now you have 4 and you need the 5th.

I would get the salesman to compete with each other on the older leads, offer a 'bounty' on dead leads. Offer a annual contest on top of a higher commission on bounty hunted leads. You could do it on points, offer 2 points for any dead lead sold, offer 5 points for poaching another salesmans dead lead. Salesman love getting one over on their peers by selling what they couldn't and getting rewarded for it. Highest points at the end of the year gets the trip, plus they make more money on the commisions off selling the dead leads.

NoBS

Well...I've read quite a few posts on this board. It seems there has been quite a bit of unsuccessful contractors out there. So, understanding your frustration, I've decided to offer some legitimate answers for you all.

Yes, I am a Sales Rep for ServiceMagic...so, what I propose is this. I'de like to hear your concerns, grips, and frustrations. Then, we'll have an open forum. It'll be all of you against me. I'll help you seperate out the truth from the b.s. about ServiceMagic.....what it IS and what it ISN'T.

In my experience, either a contractor was mislead from a Rep (which is unacceptable) OR the contractor has set unrealistic expectations of SM or any lead service for that matter. Sure, there's pro's and con's with every service.

So, I invite you to discuss this with me, and I give you the "no b.s." answers you're looking for.

marc

NoBS

In the last couple of weeks we have had Service Magic leads tell us that they just signed up to win something.
What's that all about?
I will also tell you that the people who put down Call any time any number are the most dificult to reach.
Although I know it's a numbers game....I will say that the leads lately have been worse than usual. What can we do to increase our odds?

NoBS

Hi Marc

Signing up to win something? THAT is a definate problem and you shouldn't have to pay for a lead of that nature. Remember, there are VERY specific circumstances, in which a lead will be credited to your account or you will be issued a new lead...
*A lead in which all contact information is incorrect.
*A lead in which another contractor is just "testing" the system.
...and I believe there are 2 others that fall in this category.

One of the BIGGEST "grey areas" is this...If a homeowner goes to the site and submits an application, it goes through the system and gets distributed. So let's say you try to call the customer back, but you get no answer...then when you finally DO get ahold of the customer, They've already got a couple of bids..etc.

Here's the "grey area". From YOUR perspective, you may think "these leads suck!, I can't get a hold of the homeowner, and when I do they've already got someone."..from SM's perspective it's.."This is a numbers game, this is why the leads are priced the way they are because we KNOW you're not going to close every lead we send you (because of blah..blah..blah).

I personally can tell all of you this: Every single day, I get requests from contractors who "want more information". Our technology is powerful enough to capture the contact info ..etc. WHILE the CONTRACTOR IS ON THE COMPUTER. So...I call them back while there STILL ON THE COMPUTER...and guess what??? No answer.

This happens every day. I'm calling someone back 7-8-9 times because they came to our website "looking for information"..yet, they never return a call, emails, or even answer the phone?

This is a numbers game fellas (and ladies). Definately, make every effort to call the customer back as soon as you get the lead (hopefully you've set yourself up to get it via CELL TEXT MESSAGING).

Anyway Marc, to answer your question, you should call your Account Manager or Customer Service and let them know what the deal is with these homeowner's you say are "just signing up to win a prize".

-Hope this helps!

NoBS

Mike Finley

Who does Service Magic regard as their customer?

AaronO

[QUOTE=marc]NoBS
In the last couple of weeks we have had Service Magic leads tell us that they just signed up to win something.
What's that all about?QUOTE]

Marc, though he did not answer the question, I will hopefully try to explain:

ServiceMagic is unable to generate all of their leads, based on the number of customers they have accumulated, so they use outside vendors who sell them leads from their own sites or methods.

The most popular "unethical method, is the spam generation emails, of "Win An Ipod" or XBOX or whatever. Someone gets this email, responds to it, and then submits their information. They either have to submit for a home improvement, refinance, or purchase some video program, and then they don't even win the prize, but then are elgible for it. The information is then sold to larger lead provider companies, i.e. ServiceMagic. They probably don't do that themselves.

Now if you return the lead to ServiceMagic, what THEY SHOULD DO, is credit you the lead, and then terminate that affiliate relationship that generated the lead. They may or may not, based on the number of complaints from that lead, or the company that sold them the lead. That is a numbers game that their 'higher ups' review. If they sold one of those lead 4 times and only one person returns it, they made a profit, regardless if it was an illegitimate lead, so they will continue to sell those types of leads, until they see the profit margin dwindle.

Marc, I hope that answers your question, on why your leads are saying "they were entering to win a prize"

dougchips

Odd timing, I talked to my SM sales rep this week and informed him that I was not going to use their service because of the info I gained at this site.....and here they are (SM) to defend their company. SO SM here goes;
#1. Your lead cost do not go hand in hand with our profit potential for different jobs. I could make 4k profit on a window job and only $400 on a door job.
#2 Numbers game, charge more for quality leads that let the contractor set a appointment.

more later time to cook lunch

ApgarNJ

after reading all these posts on this thread about SM. all I have to say and i'm not trying to be snobby at all, but the day I have to buy my leads is the day i'll just pack it all up and sell the business. The only money i have ever spent on marketing, since day one of my business, is on business cards, which i don't hand out by the thousands either, and company tshirts/truck lettering. my company grows by 25-50% each year, some years even more. ITs all word of mouth and I don't have to pay a soul or talk to some sales guy who wants to call me 20 times a week.