Not Tonight, Honey
Generally, the more complex the job, the less likely it is to come directly via the Internet. That’s why many full-service remodelers feel that lead-gen companies are better suited to single-line and specialty firms, preferably with aggressive sales systems, and, at the opposite end of the spectrum, to very small handyman shops. ServiceMagic CEO Craig Smith says that the company’s strength is in sole proprietor companies that don’t do much marketing.
Speed is also critical. Internet searchers want, and expect, an immediate response, says George Faerber, owner of Bee Window, in Indianapolis, a window and sunroom company that generates 30% of its sales from Internet marketing both through its own site and leads purchased from three lead providers.
CalFinder.com, a two-year-old Web-based lead-gen company in Oakland, Calif., capitalizes on both these realities by specializing in window replacement and kitchen/bath remodeling.
Window companies often close on purchased leads, says Kyle Ferraro, CalFinder’s national director of window and solar, because they have a phone room and someone assigned to call. “They can do the key follow-up you need to do with these leads,” he says. Not only that, but these companies usually put prospects’ information into a contact management system and continue to market to them.
Ferraro says CalFinder.com found that window replacement contractors were willing to drive as far as 50 miles for a job, whereas kitchen and bath contractors were willing to go just 10 or 12 miles. Homeowners turn to the company for kitchen and bath contractors, he says, because “it’s hard for them to find a contractor.”
Some lead-gen company executives say that full-service contractors put themselves at a disadvantage with purchased leads by failing to contact prospects immediately. “We tell them: The second you get this lead in, call them,” Ferraro says. But delays of six or eight hours, even a day, are rule of thumb, especially with full-service customers. “They figure: Oh, I’ll call tonight when I get back to the office.”
The problem with that scenario is that Internet marketing is increasingly moving the sale of home improvement projects into real time. “Any lead off the Internet is a gotta-be-done-now lead,” says Matt LeFaivre, president of LeFaivre Construction, in Taneytown, Md. “The [prospect] want[s] instant gratification or they feel like they’ve been gypped.”
LeFaivre, who has used lead-gen services from time to time, is considering doing so again. What holds him back, he says, is “I want them to guarantee to me that their clients are professional contractors with a similar business structure, so I’m not trying to compete with one or two guys and a pickup.”
Make Me a Match
Two trends are moving full-service contractors and lead-gen companies closer together. On the one hand, full-service companies whose reputation alone used to fill their backlogs now must market. On the other hand, lead providers are seeking to find ways to make their service more targeted demographically and by ZIP code, and to ensure that homeowners receive not just a phone call from a contractor but information about that contractor’s projects and practices.
ServiceMagic, for instance, will now furnish contact management software to its contractor customers so they can remain in touch with, and market to, leads that don’t pan out. (“But it’s like leading a horse to water,” Lupberger says. “You have to use it.”) In September, Contractors.com switched from a lead-fee model to a win-fee model. You don’t pay for the lead unless you get the job.
Steve Adler, owner of HomeNet Solutions, which steered Greg Harth to a whole-house job, says that his is a very personalized service, with just 1,500 pre-screened contractors in a three-state area. “We pre-sell the contractor to the homeowner, which makes it much easier for the contractor to get better-quality work and a higher close percentage. We don’t want to give you five names, we want to give you one name of someone we know you will like and have a great experience with.”
Unlike most national lead-gen companies, HomeNet Solutions works on a win-fee basis: get the job, and you pay for the lead on a sliding scale that ranges from 3% of a big job to 10% of a job $500 or less. The service steers contractors to large jobs — there are far fewer of them now, Adler notes — and small, in-and-out service jobs.
It’s always been in those smaller, service jobs where lead providers have excelled. But as marketing shifts inevitably to the Internet, contractors specializing in large-scale jobs may find that they have to deal with lead providers, since that’s where homeowners often land when they do Web searches. Such leads are an opportunity to get in front of people when there are fewer people to get in front of.
Small jobs, Lupberger is at pains to remind, can become big ones down the road, or right around the corner. He cites a recent instance of a countertop replacement lead that, after a contractor visit, became a $50,000 kitchen.
“Whether you like or dislike online leads is almost irrelevant,” he points out. “Because your customers are there. They’re people somewhere in that buying process, and we have the ability to connect with them at some point in the selling cycle. They wouldn’t have contacted us if they weren’t somewhat serious.”
