3 Reasons Why Home Service Professionals Need to Stop Paying for Leads

Home service professionals need to stop paying for leads, plain and simple. When you pay for leads, you’re investing in low quality prospects who only want to kick the tires, you’re getting a terrible return-on-investment (ROI) as a result, and you’re not growing your word-of-mouth referral business.

If any of that sounds uncomfortably familiar, you’re not alone. It’s easy to pay money to get your name listed on a home service professional directory (Home Advisor, Angie’s List, Yelp), but all too often, those leads are a huge waste of your time and money.

Here are 3 reasons why Home Service Professionals need to stop paying for leads right now:

1) Bad Return-on-Investment (ROI)

Tired of price shoppers out kicking the tires and wasting your time on the phone? You know better than anyone that the leads you get from these directory services are almost always that caliber. While it might seem like you’re getting a lot of leads with these services, what you’re actually getting is a lot of people wasting your time.

With these competitive leads, it can take many phone calls to reach the homeowner, and only a handful of these people agree to an initial appointment. Let’s say that you’re paying $40 per lead. When lead quality is poor, it could take you 10 leads before you get a job, making your cost to acquire a new customer $400. If you only make $200 on that job, you’re losing money!

You can look at the ROI of purchased leads from service directories in two ways. On the one hand, you’re paying money and in exchange, getting leads. Pretty good deal, right? But on the other hand, the leads that you’re getting are just a name and a number of someone who may or may not be in need of your services.

A quick search on Google will quickly bring up hundreds of pages of home service professionals complaining about getting ripped off by lead service directories, like HomeAdvisor. The bottom line is that these lead sources are just not worth it.

2) Attracts the Wrong Customers

The leads you get from these lead generating directory companies are all from people who are looking for the lowest price possible. Only 22% of homeowners hire the first person to give them a quote. The other 78% call up to 6 contractors for quotes, even though you’ve paid for that lead. This lead pool is full of customers who will continue to shop around and never become a repeat customer. This approach is not working to grow your word-of-mouth business.

What’s most troubling about buying leads from these service directories is that they go against everything you know to be true. You already know that the best projects/jobs come from word-of-mouth and referrals from past clients. That is how you should be investing in your business.

When you get a customer referred to you from a past client, that person already has personal trust in you because of their relationship with their friend. You’re not going to have to try and bid to get the business; you’re going to do quality work and build that customer relationship.  The leads you pay for aren’t looking to build that relationship with you. They’re the people who will continue to go back to Google or Yelp every time they need a home service professional.

Instead, you should be investing your marketing dollars on staying in touch with your past customers. They’re going to be your source for new referrals and repeat business.

3) Lowers the Quality of Your Business

When you lower the quality of your service to accommodate a price shopper wanting a low bid, you get caught up in a race to the bottom. If you have to cut corners on labor and materials just to deliver the lowest price, your reputation takes a hit. Not to mention that you’re able to deliver quality service at a fair price, you’re more likely to secure repeat business and word-of-mouth referrals.

You want to provide a high quality service and leave your customers happy. Don’t diminish the quality of your work because of tire kicking price shoppers. When you’re able to rely on repeat and referral business instead of purchasing leads, you can confidently charge a fair price for excellent work.

Wrap-up

When you invest in marketing activities to generate new business, your best source of new leads is always going to be from your existing client base. You do high quality work and staying in touch with your happy customers should be your marketing focus.

It’s time to stop paying for leads. When you buy leads from service directories, you are investing in price shopping leads that have low ROI and don’t work to grow your referral business. Are you ready to start getting your money’s worth?

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travis.balinas
Travis Balinas
travis@outboundengine.com

Travis is the former Product Marketing Manager at OutboundEngine. He now works in Product Marketing at BigCommerce.