Lead Services Will Only Hurt Your Business.

Any Season

This was going to be a response to another thread but i felt it would get lost in there...

If you are considering using a lead service do yourself a favor and join your local builder's assoc. (even if you are a sub), meet with some people from a couple of homeowner magazines in your area, buy or make NICE signs, and find a direct mail company that you can set up a plan that is turnkey and all you have to do is field the calls and estimate the jobs. I was all about the lead companies when I was getting started a couple of years ago. What I realized was that they are trash, the leads are trash, the customers are tire kickers, and the jobs I did land, the customers acted as if I worked for Servicemagic or whomever, by calling them to call me with every rediculous question or service they wanted me to add free of charge. Also, if they have a complaint, you better be ready for a process more one sided and aggrivating than the worst BBB complaint you could imagine. NOT WORTH IT!!!

I booked about 30K worth of work in nearly 2 years and spent just over 5K on leads. That is 17% which for round numbers, let's call it 20%. 20% for one aspect of your marketing alone is an epic failure if you have any idea what you are doing or have even the slightest experience in marketing. If you are a reputable, insured contractor, your labor is coming in around 40% after labor/employee burden. For painting, the materials are another 10%. 40+10+20= 70%. So you are profiting 30% gross at best, and this allows for no problems and doesn't reflect any of your other misc expenses.

In this economy that is just too much money to be throwing away. Not to mention your time and fuel for all of these estimates that never come to fruition. It is crazy not to market at least at the same level you have been, and if you can afford it, you should market more bc these are the times when you grab market share at an exponentially faster clip. The biggest mistake you can make however, is to spend your money on marketing and advertising that is not for you, under the assumption that you are spending the money so the work has to come. By this I mean online lead services and for most of us, radio.

In short, spend your money wisely and you will be busy. I have 14 guys working on residential repaints right now when many guys in my area have no work. Also, take the time to crunch your numbers and find out exactly where all of your money is going. If you do this, the math alone will show you that lead services are not for you. If you are considering joining one because you have absolutely no work...I realize this is a tough position but your money will be wasted and your time that you could be spending working or doing other things to generate business will be spent driving all over the place for estimates you will never or hardly ever book and you will ultimately suffer.

takehartinc

I gave ServiceMagic a call and they were pretty aggressive after that and it turned me off. I never went ahead and signed up. Instead I have been carefully planning our marketing and advertising strategy. Our local chamber is offering memberships at a rate of $275 for the bargain barrel membership or $2500 for the ultimate. I am having trouble finding a local builder's group. I love trade publications and valuable forums such as these. I am getting ready to trek over to the library for more local information. I feel CL is not going to be the right catalyst to begin to cultivate our image with. Could you elaborate on the direct mail turnkey thing? Is there a high initial investment?