Paying for Leads That Go to Four Contractors

Three other companies already called

It is March, and the renovation season is starting. A contractor pays a lead service for a homeowner's request, a deck or a basement suite, and calls within the hour.

The homeowner sounds tired. Three other companies have already called, two have booked visits, and she plans to see who comes back with the best price.

The contractor has paid for an introduction that three competitors also paid for. Whatever he does next, he is in a race.

In the spring rush this happens daily, because every homeowner with a project is asking for quotes at once.

How shared leads work

Many lead services let homeowners describe a job once and promise them several quotes. To deliver that, the service sells the same request to several contractors in the area, often three or four.

Each contractor pays whether or not the job is won. The service is paid several times for one request, and all but one of the contractors get nothing for their fee except the chance to compete.

Some services sell exclusive leads at a higher price, and some refund leads with wrong contact details. Read the terms closely before buying.

What the fee buys

Looked at closely, a shared lead is a narrower purchase than it seems:

• A name and number that others also have.
• A short description written in a hurry.
• A head start, but only if you are the first to call.
• A profile on the service's site, which the service controls.
• Reviews collected there, which stay with the service.

The last two are easy to overlook. A happy customer's review on a lead service builds that service's pages, and it cannot follow you to your own site or listing if you stop paying.

Cost per job, not per lead

A lead price looks small next to a renovation. The figure that matters is what it costs to win one job from these leads, including all the leads that went nowhere.

Add up a month's lead fees and divide by the jobs that actually came from them. Then add the hours spent calling, driving to estimates and writing quotes that were never accepted.

Compare that with what a job is worth to you after costs. Some trades will find it fair. Others will find they are paying heavily to quote for work that goes to the lowest price.

Speed decides the race

When four contractors receive the same request, the first to call has an advantage. The homeowner describes the job once, properly, and books a visit; later callers hear a shorter, wearier version.

Set the service's alerts to reach your phone, not an office inbox read at night. Decide in advance who answers leads while you are on a job, and what they say.

If you cannot reply within minutes during working hours, shared leads are likely to cost more than they return, and that is worth knowing before the busy weeks.

Speed also tells the homeowner something about how you will run the job.

A worked example

A small tree planting contractor in the Comox Valley plants shade trees, privacy hedges and windbreaks for homeowners, acreage owners and builders, with a crew of four through the spring and again in the fall.

Each spring the owner bought leads from a service, and homeowners often told him others had already called. His reviews, all good, sat on the service's profile, and his own site was one page with a phone number.

Last spring he kept a sheet for every lead: when it arrived, when he called, whether he quoted and whether he won. By June the cost per job was clear, and higher than he had guessed.

This spring he buys leads only for hedges, the work he does best, and the alerts go to his phone so he can call back within minutes. Every lead still goes on the sheet.

His site now shows hedges and trees he has planted, by town and season, explains how quotes work, and has an enquiry form. Satisfied customers are asked to review him on his Google listing.

An enquiry through his own site reaches him alone, so he can answer it without racing anyone.

What homeowners do after the call

A homeowner who has heard from four contractors does the same thing with each name: searches for it. What turns up decides who gets the visit and who gets a polite no.

A contractor with a real website, recent projects with photographs and places, a clear service area and reviews on his own listing looks like a business. One with only a lead service profile looks like one of many.

Homeowners also notice where the reviews live. Reviews on a contractor's own listing read as his; reviews on a lead service read as the service's.

Building what you own

Your own site should show recent work with photographs, the towns you serve, the jobs you take, how quotes and scheduling work, and proof of insurance where your trade needs it.

Ask every satisfied customer for a review where future customers look, usually your Google listing. Reviews on Google need a Google+ profile, so send customers a direct link and a sentence of help.

An enquiry form on your own site goes to you alone. If you also advertise, send the ads to that site, so every enquiry you pay for is one nobody else is calling.

The counter-case

For a new contractor with no reputation, few referrals and an empty spring calendar, shared leads can be a sensible start. They put the business in front of homeowners it could not otherwise reach.

The same goes for a contractor moving into a new area or filling a slow month. Used that way, with fast replies and a sheet tracking every result, leads can be worth their price.

The risk is depending on them. Each season spent only on someone else's platform leaves the business with nothing of its own to show next spring.

Before the spring rush

1. Read the lead service's terms on sharing and refunds.
2. Track every lead from arrival to job won or lost.
3. Work out the cost per job, including quoting time.
4. Send alerts to your phone and reply within minutes.
5. Buy only the categories you do best.
6. Ask customers for reviews on your own listing.
7. Build a site that shows recent work by town.

Step two makes every other decision possible. Without a record of each lead and its result, the cost per job is a guess, and guesses about money tend to be generous.

Suspecting a competitor is clicking your ads covers what to check first when you run your own ads and the clicks stop matching the enquiries.

Frequently asked questions

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