What categories were you listing in?

 

Replacement Windows.

 

Considering they also respond right away when the lead comes in I am shaking my head that people give those lead gen companies the time of day. Those numbers are horrible.

And it gets even better, not only are the sit %'s low, but they also try to hi-jack your own leads by jacking your company name. I reviewed the backlinks from a lead gen company and they were creating anchors for individual company names to their profiles. /roll my friggen eyes.

 

Yep. I have seen it first hand working for lead gen companies. They use those tactics to try to steal your SEO juice for themselves. Taking advantage of people that are not tech savvy is something that they count on.

 

those numbers are horrible. But I think that has to do alot with the projects chosen as well. I think the lead gen services are tougher to use on larger remodels and what not. But for smaller, individual services, like roofs, pools, or insulation, i think there is success to be found.

It is far from my main source of income, but I am in the process of completing a $22,000 condo complex, and 3 more jobs between 1200-2000 this week sold.

Fast response and maybe above average sales skills can make it very profitable. The 3 jobs I sold were within 24 hours of walking out the door, and 3 others I got 1 didn't select me and 2 I haven't met yet(and probably won't). So that's a 66% lead rate and 50% conversion.

Now, other times, I will land 7 out of 10 jobs. Other weeks, I can get 0 out of 4. Then, sometimes, I only get 2 leads in 2 weeks.

Since 2006 when my business started, I have received 4,784 leads. I am not sure exactly how many have lead to site visits and further to a sale, but I'd be willing to bet I landed around 35%, and without a doubt more then 1000.

 

Yeah, I mean purchasing leads is fine if the ROI makes sense. I agree that a good % of the contractors are not using best practices, and have below average sales skills. Those people will not have success with either type of lead.

Being on both sides of the lead game (lead gen company, working directly for contractor) I think they both can work. The volume a lead company can produce is always going to be more then a company can get themselves. However, the quality of the internal leads generated is so far superior, its getting more difficult to make a case for the lead generators, unless it is an appointment.

 

We had similar results earlier this year, on a smaller scale (purchased a few hundred leads).

Appointment rate was 14%, and the estimates that we did run were much lower quality than others (mere 30% close rate).

In the end, the little business that was generated, did not justify the cost of the service for us, however a friend of mine in Atlanta Georgia, is doing great with the service.

 

Yeah, it totally depends on the ROI. For some, a 14% set rate will work since the profit from the job will justify that. For others, 14% set rate amounts to $400-$500 per appointment which makes no sense. Lets say your lead cost to generate the leads yourself is double or triple that of the lead generation companies. At a 50-70% set rate for your own leads, the actual cost per lead that you paid may have seemed high, and the volume of leads is lower, but you actually got the appointment for something like $250 and it makes sense.

 

Thanks for showing data on what I have suspected the entire time. I'm in this category as we do replacement windows so this post is very valuable to me.

 

Glad you found some value.

 

I would love to see these companies go away. Immoral practices

 

I make a good return on it so I am happy. As far as them going away, it will never happen. Because a good amount of guys do have a decent return and will continue to use them, and others will start up and use them to drum up business initially. I think the quality of lead is much better then that that comes off of craigslist for example.

I don't think that is has to do with the quality of a contractors page and marketing that gets it though. I think it is more convenience. Lead generation can market to EVERYTHING in the trades and then some, nationwide. Meanwhile, a contractor is simply trying to take his slice of the pie in his region. So the lead generation site is bound to carry more pull.

The only thing that does aggravate me is the headaches I get when trying to get credit on a bad lead. I mean, if they are qualified, we should get more then their google voice phone number and voicemail, with no true last name, real e-mail, or street address. Other then that, I am happy. Just signed another one for almost 2k off a lead today.

 

I agree with almost everything that you said. Lead generation companies will get more volume, guaranteed. Generating your own leads gives the ultimate control though. I have heard clients say that (insert lead gen company here) was working great for me, but then all of a sudden the leads turned crappy.

The only way to protect yourself from these types of problems is to run marketing to your own site. That said, I think it is great that you are able to make the leads that you are purchasing work well. Lead gen companies are good when they are a complimentary piece of what you are doing, but not when they are the only thing that you are doing.

 

16% is TOO GENEROUS

16% is WAY TOO GENEROUS.

The entire context of this thread is great, especially where the focus should be on the contractor building their own site to generate leads. I learned about the details a different way, and that came through the transition of my software business to including an Website SEO Service. I stumbled upon the details by learning that many of the Lead Generation companies are "extremely profitable" by having in the range of 7 to 10% at best. Contractors lose while others win massively. The mindset is to have a contractor feel they need to purchase at least 10 leads before they get one good lead, which doesn't mean that will become a profitable sale. And as always, I would enjoy a Lead Gen company joining this conversation, not with the traditional marketing fluff, but with statistics they present to investors. :whistling I keep watching how all these lead gen companies raise millions to sell a lead to a contractor. There are all sorts of spins on this, but the net is so many people are betting that most contractors will be short sighted and focus more on the short term rather than realize the only sustainability is to focus on the long term. Why not spend a little effort for results that are continuous after a few months as opposed to just focusing on today as a crapshot.

Some companies based in a specific local market and niche will get an over 10% success rate, but I'll bet the silent unsuspecting majority will be far off and waste not just money - but valuable time they could have allocated to their own website to bring in leads for life. Anything to do with Lead Gen companies is nothing other than a short term gamble while anything to do with your own website in strategic long term planning. I realize most like to think there is a short term fix, but a long term strategy pays much better dividends for ongoing success. Thanks for the thread topic. Would be nice to hear from contractors who can say how many leads on average they paid for before getting a decent lead, and then how many decent leads do they get before making a sale. I'll be the net answer is rather small.

And finally, without even caring about the percentage, remember to read the terms and conditions you signed up for since many do not realize what marketing rights you may have signed away. In other words, stop paying and then leads "using your name, services and territory" may be redirected to your nearest competitors who decide to give it a try.

Happy Thanksgiving to all.

 

16% is WAY TOO GENEROUS.

I thought 6000 leads was a large enough test to safely say 16%. No need to make them look worse than that. There is a place for lead gen companies in home imp, just no one has the right model yet in my opinion. The current way of making contractors 'eat' the bad leads is a bunk deal.

 

As far as everything being redirected to my competitors, I have never been afraid of competition. I sell and deliver. And I think most people who spend time to investigate their own contractor will go that method. Usually, the lead services are probably going to gather clients who either don't know where to begin looking, or are too lazy to look on their own.

Over the course of the long weekend, I am going to take some of the downtime and study my numbers a little closer. Not everything, but maybe the last 2 years. I will provide a lead number/sale number/closed number. Again, it depends on your trade, but there is success to be found here. Just like anything else, this is going to work great for some guys and be useless for others.

And to be clear, I have had time where I had my doubts when I first went into business. Everything was a little tighter and I was dependent on the leads being generated for me. At that point in time, I would probably not recommend them. However, as just a little side piece to the big picture, its great.

The best thing posted on this thread was "Lead gen companies are good when they are a complimentary piece of what you are doing, but not when they are the only thing that you are doing."

 

Awesome! I look forward to seeing your numbers. Also, I appreciate your respect for the thread by not outright bashing the lead companies. The whole point of this thread was to start a discussion.