What's Your Experience with Internet Referral Services?

John G. Swanson
October 1, 2013
THE TALK... | Sales & Marketing

Last week, we reported the launch of Porch.com, a new internet service designed to connect homeowners with contractors. The field also includes Angie's List, Home Advisor (previously Service Magic) and others. Looking at various window and door dealer and manufacturer websites, it's clear many companies in our industry have at least tried these services for lead generation, and in some cases, embraced them.

I thought I would use this week's poll to get a better sense of how much influence these services have on our business. Has your company tried one or more of these services?  Was it a cost-effective way to gather new leads?

And of course, I'd like to hear more on the subject from you too. What are your firm's preferred methods for lead generation these days?  Where do you invest the most time and money: existing customer referrals, canvassing, telemarketing, traditional advertising media, home shows, websites, SEO and other internet marketing, social media?  Is your mix changing?  Post a comment below or email me at jswanson@glass.org to share your thoughts.    

 

Survey Results as of 10/08/2013 :

Describe your company's experience with Internet referral services:

We've tried one or more and determined this approach is not cost effective for us.

  

 

52%

 

We have not tried these services, preferring alternative approaches to lead generation.

  

 

24%

 

We've tried one or more and been somewhat satisfied with the results.

  

 

16%

 

We intend to try one of these services, but have not done so yet.

  

 

6%

 

We've tried one or more and been very successful with the leads we've received.

  

 

2%

 

 

This week's poll results do not give high marks to internet referral services.  Less than 20 percent of respondents report they've been satisfied or successful with the leads generated from these types of companies. More than half of respondents said this approach was not cost effective for their company. 

In some ways, I'm not too surprised.  Asking various dealers through the years about these services, I've heard some talk positively about the results, but rarely have I heard a ringing endorsement.  

But I would also note that scanning dealer websites also suggests there's a higher level of participation in these serivices than our poll would indicate.  Most specifically, I can point to a growing presence of "Angies List Super Service Award" logos on dealer home pages.  It's clear many window and door dealers see a need to work with these internet referral services, even if they might not be completely sold on the idea.

   

Comments

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Internet referrals have really helped me out in past. I was trying to get someone to fix my gutters and found some really reliable places online. I definitely can rely on the internet to find quality companies to help me out. http://www.ajswindowsgutters.com/window_washing.html

I completely agree with this anonymous comment. Internet referrals have always been helpful. It seems that whenever I hear positive reviews of a company I trust it. I don't like testing companies out to see if I like them without hearing some positive feedback on them. It just doesn't end well, usually. Thank you for sharing your thoughts. I really appreciated this insight.
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Thanks for the information. I think this is going to be very useful to me. I'm also going to share this with my brother and see if he can use it. http://www.glassdoctor.com/fort-collins/HomeGlassRepair/Windows.html

I personally like having the services available online. Being able to find the right contractor from a smart phone is an awesome tool. I find it a lot faster then flipping through a phone book for one.

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Referrals are one of the best ways to get new customers. When someone trusted tells you that they think highly of a company that means a lot. Referrals like this can increase a company's customer load a lot.
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I should try this out. I have never tried one of these referral services. What would you recommend?

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I have a friend who works for a firm that is putting a ton into their company website by doing things like optimizations and SEO work. She says that the business has seen a lot of improvements in their rankings from their hard work over the last year, but that it took a long time to get to where they are at. I think a lot of companies are too impatient to wait and see the benefits of SEO. It's a long process with lots of changes over time, so it's easy to get discouraged. In the long run, though, I think it can really benefit a company.
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That is an interesting question, but valid. Not a lot of people probably have good things to say here. That is usually because they don't know which companies are actually good and helpful.
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I like to look online for a business to use. If I can see reviews on a place and they are generally good I'm more likely to use them. I've used Angie's list a few times and liked it.

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I like to look online for a business to use. If I can see reviews on a place and they are generally good I'm more likely to use them. I've used Angie's list a few times and liked it.

I am actually quite shocked at the results of the survey posted here! I have been hearing a lot about SEO and the effects of online marketing, lately. A lot of people have been saying that most of the marketing done by companies in the past year or so has been online, so I thought a lot more of these businesses would report better results from an online marketing campaign. I know that social media has been proven useful to local business in certain ways, though. With so many youth and parents using things like Facebook, Twitter, and Instagram, there are endless opportunities to market a product or service to audiences of all ages.
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I would like to hire someone to replace and renew my backyard patio. How do I connect up with a patio specific expert? Is looking for a patio specialist too narrow of a search topic? Do I need more like a landscaper?

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It's surprising to me that so many companies didn't have success with internet referrals! I would assume it would be much easier to get leads through the internet than through other means, like TV advertisements. I know the internet is the first place I go when I'm trying to get the word out about something. http://www.vailvalleygutter.com/

I would have thought that the internet referral rates to be much higher. I wonder if businesses compensated their customers more for their referrals if the overall company revenue would increase. I'd imagine it would, and the customers would be more eager to do it for them. http://www.centuryroofing.net/products.asp

I personally have found internet referral services to be hit and miss. You either get the overly enthusiastic customer or the one who cannot stop complaining. I have found success in finding referral services which use verified customers and have accumulated a large pool of reviews. With those two defining aspects you cannot go wrong in selecting a service.

George Puzo | http://metropolis-disposal.com/dumpster-rental.htm

When ever I need to find a referral I look online first. I'm really surprised by the results, I thought it would have been opposite. It's worked well for me so far so I'll keep searching for things online.

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That sounds like a great site! I'll have to try it next time I'm looking for a plumber! I just moved so I have to find all the services I need again.

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Thanks for sharing. I haven't really tried one of the services before but I'm thinking about having some work done in the home soon so it could be useful.
Thanks!
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This was a very interesting article to read. How long have you been in sales? It seems like you have been doing sales for a long time.

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The following comment was submitted by Robert Glenn, director of call operations and business development manager at Home Improvement Leads:

This is a great article however it seems to show the real issue in the relationship between a lead generator and their customer.  The most important thing that a lead generation company should never forget is what their true goal and what their commitment is to their customer, the contractor or nationwide company.  This commitment is to GROW the Customer as a "performance marketing platform" that is measurable, targeted, and scalable.  

The customer should also understand the difference between a lead aggregator and generator.  An aggregator buys leads from other sources and sells them to their customers. A generator actual does the work, knows the intent, time of search and other details that creates the quality of the leads and sells those to their customers.

When speaking with CEOs and SVPs of Marketing to large companies in the home improvement space I find that they have all had less than great experiences with lead companies at one time or another if they have tried this type of marketing.  However the largest companies understand that you have to try as many as it takes to find the ones that do these things:  Generate the leads being sold.  Measure the leads being sold and the revenue spent.  Target to find the best ROI for the company.  Scale up and down, yes down, in order to optimize how the leads are working.

Finally the best of the best companies, ask their lead generators the  tough questions.  Questions like "Can WE do anything better on our end to have better close rates that you can help us with?"  If your lead generation company can't help you with this question they are not data driven and are probably going to fall into the category that Terry Newcomb mentioned which is an "expensive disappointment."

 

we have used internet referral sites and in the beginning they seemed worthwhile. Later when we had to dispute issues, we found them to be uncooperative. They hit you with ridiculous fees and give you no resolution to your disputes. If you do not pay what they demand, they threaten to attack your credit. Two that we were extremely displeased with were ConstructionDeal.com and Servicemagic.com (now known as Homeadvisor.com) Be careful when using these kind of national lead generation companies. Angies List is very reputable and does a nice job for the cost.