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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My friend works for an internet referral service. I haven't really been into it that much, but I'll have to ask him about it again. It seems interesting.
-Seamus | Borter Heating and Air Conditioning

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.

When I responded to your survey, I chose "not cost effective" because you did not offer "expensive disappointment" as an option.

None of the handful of services I have tried in the last 5 years provided leads that were worth the pixels used to display them. If you are using PPC ads for your own business, it is my view that buying leads from these companies (who also buy PPC ads from Google) is just spending money to compete with yourself.

Angie's List should not be lumped in with them because it is more like the Better Business Bureau or Yelp than a lead-referral service. In fact, we find our presence on Angie's List to be a worthwhile and very affordable investment.

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