MATCH MAKER, MONEY MAKER?

Could home-improvement lead-generation services be the key to boosting your business?

match makerPainting professionals who use online lead-generation services may be able to earn up to tens of thousands of dollars a month if they’re willing to do what it takes to be successful when affiliating with these services.

“I pay for being one of three painting pros referred in more than 200 zip codes in eight counties in New Jersey and Pennsylvania,” said Gary Weller, owner of Gary Weller Painting in suburban Philadelphia, of his relationship with Porch.com, which helps homeowners connect with home-improvement professionals. The names of three painters per zip code are provided to consumers who inquire, he said. “I always follow up immediately when I’ve been notified that a potential customer has contacted Porch,” he said. “A customer often will do business with the first pro to contact them after their inquiry.” For being one of three pros available in 200 zip codes, Weller pays about $3,000 a month. But that exposure generates about $40,000 a month in revenue, he said.

Porch.com is one of many such services that vary in procedures and approach, but all are intended to connect pros with more customers by extending the professionals’ marketing efforts.

Other painting contractors who have used online lead generation say it’s worth the investment. “Realize that you must spend money to make money,” advises Alex Houghton, owner of Tera Painting in Seattle, WA. He said he receives up to 40 leads per month by affiliating with Porch.com

HOW DIFFERENT LEAD-GENERATION SERVICES OPERATE

Most home-improvement lead-generation sites connect consumers with contractors in all kinds of fields, including painting. At least two companies specialize exclusively in providing painters to inquiring customers, because painting is an increasingly sought-after service. One company reports that its professional painter network has grown by 25% in the past three and a-half years, almost twice as much as its overall network of pros has expanded in the same time frame.

Recruitment and verification practices, as well as fee structures, vary widely among online lead-generation companies. Some lead-generation companies, including HomeAdvisor, recruit home-improvement professionals in various metropolitan areas, require them to pass a background check, and encourage them to affiliate with the company for a fee. The typical painting pro who signs up with HomeAdvisor pays about $400 each month for connections with potential customers.

ANGIE’S LIST focuses on consumers driving traffic to contractors in cities across the U.S. through online reviews, but has begun connecting customers with pros through a service called LeadFeed, which costs a painting pro $30 per interior project lead and $40 per exterior project lead.

PORCH.COM encourages pros to sign up with the company and offers the option for the contractor to become a verified, endorsed provider. The service, called Porch Guarantee, is only available to subscription pros and is part of the services they receive. Subscription rates for painters start at $250 per month.

At least one company, THUMBTACK, lets a pro sign up and then charges the contractor through what are known as ‘credits’ to provide quotes to potential customers. The typical cost to provide a quote for each painting project is about eight credits, or $13.36 ($1.67 per credit, available at a lower cost when credits are bought in bulk). If a painter submits a quote, say five times a week, his or her monthly expenditure with Thumbtack would be approximately $267.

The painters-only site PAINTZEN.COM doesn’t charge either painters or customers to connect. Rather, the company takes a commission on the labor cost, which it prices based on a customer’s answers to specific questions about a prospective job. The commission ranges from 15% to 25%, depending on the complexity of the project.

Another painters-only site, EASYPAINT, provides a quote for a job online or in person, assigns the job to a licensed, background-checked, insured and experienced painter, and manages the transaction, paying the painter within 48 hours of job completion. For these services, the company takes a commission of 10%–20% per project, depending on the project’s complexity. Painters don’t pay a membership or subscription fee.

MORE ABOUT EACH COMPANY

HomeAdvisor professional recruits undergo a criminal and financial background check prior to joining the company’s network, said Brooke Gabbert, VP of corporate communications for the company. “Once they’re approved, they pay a membership fee to be part of the network, as well a project fee, which varies by task.”

By the end of this year, Angie’s List will have eliminated its paywall for consumers wanting to access verified reviews and replaced it with a ‘freemium’ model. Access to contractor reviews will be offered at no charge, but consumers still will be charged for what the company calls ‘premium’ services, such as an  emergency hotline that guarantees a prequalified handyman in your home within hours of a call.

With LeadFeed, said Cheryl Reed, director of external communications for Angie’s List, participating contractors appropriate for a project are messaged, “signaling that there’s a job available if they want it. The first one to accept it is matched with the consumer. It’s essentially a way to fill capacity at a very small price point.”

Porch.com offers two ways for professionals to access homeowner project requests—a subscription model and a brand-new non-subscription pay-per- lead model for which pricing was still being developed at press time, said Jessica Piha, director of communications for the company. “For professionals willing to make a monthly commitment they have access to volume discounts and additional perks,” Piha said. Porch.com is the exclusive instore and online resource for Lowe’s across the U.S.

Thumbtack is a pay-per-quote system where pros buy credits and use them to send quotes to customers, explained Marideth Post, director of consumer communications. “Pay-per-quote means you only pay to quote, so we don’t charge commission on jobs you complete or on future projects with the same customer,” she said.

All Paintzen.com contracting candidates must complete a 15-question painter’s exam before even being considered for a project, explained CEO Mike Russell. They must also clear a criminal background check and provide three solid references. “Once candidates have successfully cleared these checkpoints,” he said, “they’re sent out on a job with an established crew to demonstrate their professionalism. When candidates have been approved by a crew, they’re able to take on projects of their own.”

“We have a company mission of building the world’s most trusted and convenient paint contracting experience available,” said Marty Cornish, CEO of EasyPaint. “We do a significant amount of research on existing solutions, but the overwhelming majority of what we offer comes from our team’s innovations.”

DECISIONS, DECISIONS

So is it a good idea to sign up with one or more of these sites? If your business is relatively young and you’re trying to build a customer base, it may be worth it, as Weller and Houghton maintain. “Our leads have doubled since joining Porch.com in April of 2014,” Weller said. But you must be willing to respond quickly to a quote request or other type of customer inquiry, he said. And you should be willing to travel to several zip codes and spend a lot of time providing project estimates to potential customers, unless the service you sign up with creates the estimates for you.

Houghton advises signing with more than one initially. “Once you find your niche, I recommend developing your profile with the site that works for you, and cultivating that community and their needs,” he said, adding that cost is the biggest drawback to signing with lead-generation companies. “Word of mouth is the cheapest and best referral, but when you need to grow, be prepared to spend money on marketing.”

DO THE WORK TO GET THE WORK

The CEOs of the painting-focused lead-generation sites make it clear that painting pros must do more than simply sign up with their companies to market their businesses. “The painting industry is traditionally done off-line,” said Paintzen’s Russell, “so in our experience, many consumers are still comfortable with more old-fashioned ways of finding painters. We feel there are strategies outside of online lead generation that should be done alongside any digital business development, so that we don’t miss those users. Working to generate more word-of-mouth and general awareness of a painting service and how it can make customers’ lives easier is important to capturing a wider range of customers.”

“It helps to have multiple channels for acquiring customers,” Cornish said. “That diversification, rather than a single source, tends to be the winning strategy. That being said, we are seeing some of our partners getting close to 100% of their business from EasyPaint, and a lot of company owners across the country I’ve spoken with have had success on Thumbtack, Angie’s List and others, so there’s no question companies are leveraging technology to grow. No matter what comes from the technology revolution that is happening in paint contracting now, word of mouth will always be the best way to get customers, so it remains critical to do great work and let your customers speak to others on your behalf.”

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CAVEAT CONTRACTOR

Some sales experts aren’t fans of the ‘one size fits all’ lead-generation concept. Bernie Heer, who helps businesses boost sales with his proprietary sales-growth system (BernieHeer.com), contends that online lead generators are concerned mainly with attracting eyeballs to their sites. They “seek to develop a flow of leads to themselves—with little to no focus on lead quality—then ask contractors to pay for access to their lead traffic,” said Heer.

“To build the traffic they need, they have to be attractive to people who are looking for contracting service,” he said. “Their role is not to help contractors, it is to serve shoppers and buyers of contracting services. As such, they almost all focus on price— low prices—as the factor that buyers should base their decision upon. They are essentially saying that all painters are the same, the results the buyer gets are the same, the customer experience is the same, so you might as well choose the lowest price. And then negotiate it even lower.”

“Professional painting contractors’ best way to find customers is to use the money they could pay the online lead-generation companies to do their own marketing,” Heer said. “They should have a great web site built and spend some money with a knowledgeable SEO consultant to optimize it, so that potential customers searching for them online will find them before they find the lead-generation companies’ sites. Established companies with a significant customer base are best served by focusing their marketing dollars on driving more referrals from prior customers and other referral sources, such as email marketing, customer appreciation events and the cornerstone of every referral-driven business, a paper-and-ink newsletter.