Online Lead Generation Directories | Choosing The Right Service For Your Business

Posted on July 20, 2016 | Lead Generation
Will Robinson
Will is the Director of Digital Marketing at Buhv Designs. He thrives on data analysis and creates effective digital strategies that create real, measurable growth for our clients.

If your business is young or you are new to digital marketing, climbing the ranks in organic search can be a frustrating (but very rewarding) endeavor. Good SEO takes time and a willingness to slough through the ranks.

For home improvement business in particular, the digital marketplace is increasingly competitive. Companies with long-standing reputations and big marketing budgets often dominate search results and first page ads. This makes Internet search a high priced, pay-to-play marketplace and many business owners quit before they begin.

So what can you do in the meantime?

If you have ever run a search for you particular home improvement niche, such as “roofing contractors {city}” or “A/C repair {city}” you may have noticed directory and lead generations services, such as Angie’s List or Home Advisor, show in the first few results along with those other businesses.

Investing in these types of lead generation services can get you the business you need to grow quickly, but at a cost.

To get the biggest bang for your buck, it’s important to know what’s involved with these services, how they work, and how to use them to your best advantage.

In this post, we’ll cover the top three directory and lead generation services (Angie’s List, Home Advisor, and Thumbtack) so that you can make a more informed decision.

Angie's List Logo

ANGIE’S LIST: WHAT IS IT?

Angie’s List is a review-based directory for consumer’s seeking reputable service providers. Just like a Google search, Angie’s List has an algorithm that displays results based on the user’s location and the services requested.

In this model, the consumer pays a subscription fee to view the search results and connect with service providers in their area. The consumer makes their decision based on your business profile, service rating, and other customer reviews.

As a business, you don’t have to pay to be a part of Angie’s List BUT; advertising with them is a critical component to receiving those valuable profile impressions and leads.

Cost:

Technically, there is no cost associated with a basic listing on Angie’s List. However, if your business is new to the platform or you don’t engage with your profile, your member score will be far too low to compete with other business who do choose to advertise on the list.

The cost to advertise on Angie’s List is variable based on the type of advertising package you choose, competition and demand in the local market, and market reach (as well as many other factors I’m sure, but this is what I was able to dig up). Most Ad packages are offered at an annual price removing the variability of a cost per click ad plan like Google AdWords.

Advertising Options:

The ads run in Angie’s List search results are more like coupons. Ad’s allow service providers to offer a “coupon” or deal that is exclusive to Angie’s List customers. Up to 14 ad “coupons” can show in a single result pushing the organic results below the fold. So, competition is heavy, and your ad will be competing with other business ad’s that may have a better scorecard rating.

Other advertising opportunities in Angie’s List include the Call Center, where customers call into Angie’s List for their recommendations. The representatives will provide up to 4 business names with preference going to advertisers.

Angie’s List also sends out a print magazine to subscribers every month where businesses can advertise.

The final two advertising options are the Storefront, which is a “buy now” feature at a set price and the “Big Deal” which is a special discount offer sent to users through email. For non-advertisers, Angie’s List charges a 30% transaction fee for every completed sale. The rate drops to 15% for a business that advertises.

For more on Angie’s List Advertising, check out this post from Motava.

Our Thoughts on Angie’s List:

If you have the advertising dollars to spend, Angie’s List is worth it. The fixed cost pricing for annual advertising is less risky than paying for individual leads or clicks. Furthermore, the fixed price and search-based model of Angie’s List means less money lost to bad leads or customers just doing a bit of price shopping.

Angie’s List can get expensive, though. Rate increases are common, and they are very secretive about how they determine their pricing. If you want to buy advertising in A.L., be prepared to work with high-pressure sales reps.

**Angie’s List basic subscription offering is now free for all users. They are rolling out several changes to the program over the next year that will substantially restructure how users interact with the List. I imagine the lost revenue will be made up in increased advertising pricing.

home-advisor

HOME ADVISOR: WHAT IS IT?

Home Advisor (formerly Service Magic) is a paid lead generation service. Its 100% free for customers to shop contractors and service providers, and offers results based on the user’s location and service needs.

Home Advisor’s “Patented ProFinder” technology claims to match service providers with homeowners based on very specific location settings, availability, and the service type. It also takes into account user reviews and project scope when delivering results.

Cost:

The cost is free to set up a pro account but there is a verification/background check process and once the leads start coming in, so do the bills. With Home Advisor you are essentially paying for impressions so, if your business is matched with a customer request and no contact is made (or you lose out to another company), you still pay for the lead.

Additionally, Home Advisor has a paid appointment scheduling service that customers can use to book the appointment directly through Home Advisor. The cost is billed to you, the contractor (but in my case that cost was passed down to me in the form of a “technology fee.”).

Pricing for leads varies based on the demand and size of the project. Big jobs that are in high demand can cost more than $50 for individual leads. There is some control over what types of leads you receive, allowing you more control over your budget.

Our Thoughts on Home Advisor:

Home Advisor seems like the best all-around lead generation service for all size businesses. Their system gives the business owner the most control over what leads are received and tightest control over your budget. Furthermore, the amount of detailed information that the customer is required to provide is more thorough than any of the other systems. In theory, this gives you better quality leads.

The downside to Home Advisor is how they charge for leads. You rely on their technology to make the match. If you are served a lead that isn’t a good fit, you are still charged for that lead.

There is a fair amount of competition as well. As an example, I requested service for some electrical work, was given the names of 3 electricians and all of them called within 5 minutes. I gave the job to the first guy that called.

Last, there has been some controversy over how H.A. handles contractor complaints. Home Advisor claims to screen all leads for authenticity, but many contractors still report bad leads (bad phone numbers, rude customers claiming they never reached out to anyone, price fishing, etc.). According to many of these complaints, Home Advisor rarely refunds money spent on bad leads costing contractors their return on the investment. That’s just the price of doing business if you ask me.

thumbtack

THUMBTACK: WHAT IS IT?

Thumbtack is another lead generation service that caters to a much larger scope of professionals. Thumbtack is marketed toward more services than just Home Improvement specialists.

The basic principal is the same as Home Advisor, however, connecting potential customers to service pros at a cost to the business.

The difference with Thumbtack is that you pay to bid on a project rather than just collect the lead and connect with the customer.

According to Thumbtack, when a customer fills out a request, the lead is sent to all eligible pros in the area. The service provider then has the option to bid on the project if they choose or let it go. The lead expires in 24 hours or when the customer receives a maximum of 5 bids, whichever comes first.

Cost:

Thumbtack is the most transparent about their costs. They use a credit system where the contractor buys credits at a set price, in bulk (with a discount) or individually. These credits are then used to bid on projects.

The amount of credits needed to bid on a project varies by project type and overall demand. Once the credits are spent to bid on a project, they are gone regardless of whether or not you win the job.

Pricing for thumbtack credits can be found on their website.

Our Thoughts on Thumbtack:

Project size and scope is smaller on Thumbtack, so it’s a great option for smaller business or independent contractors. You get to choose what you do and don’t bid on, giving you the control to choose the projects that are the right fit.

The downside is that your bid is your bid. Thumbtack doesn’t allow you to reach out to a customer for more information before you bid, meaning you must rely on the customers written explanation to determine project scope. So, if you bid on and win a project that ends up being more work than was initially quoted, you can find yourself upside-down very quickly.

And of course, there are always the price shoppers to worry about, i.e., folks that submit a job only to get an idea of the project cost, at your expense.

So which platform is right for your business?

It depends on the size of your company, your budget for advertising, and the time investment you are willing to make managing all of these profiles.

The key to minimizing expenses an increasing success on all of these platforms is how well you manage your account. That means filling out your profile as complete and with as much information about your business as you can and following up with leads quickly.

With all of these services, you must solicit and respond to all reviews. The more 5 star reviews of your business with responses, the better your profile score will be. This increases the likelihood of your business winning over someone else.

This level of management takes a lot of work. If you need help setting up and managing your profile, let us know, it’s what we do!

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