The Good, Bad the Ugly of Purchasing Leads for Your Contracting Business Episode 65

Quote for the week

BREAK FREE BY NO LONGER CHARGING FOR WHAT YOU DO, START CHARGING FOR WHAT THEY GET.

Let’s talk about the good, the bad and the ugly of purchasing or getting leads for your business.

It seems like every week there is one or two new lead services that want to help us get more business with more coming online every week…all to help me with my contracting business.

All under the pretense of helping you, the business owner, to get more leads.

So let’s take a look at a few of the big ones and see what they really have to offer. We’ve got Groupon , Living Social, and Amazon Local all right there to put you in front of more potential customers than you could possibly dream of. And you get this all for a seemingly innocent price because there are NO out of pocket expenditures, just revenue sharing. That sounds awesome until you really look at the whole package.

They will only approve your deal as long as it will really attract new found customers, so they suggest at least a 50% savings deal on that deal and then they will revenue share 50% because they don’t want to burden you with an out of pocket upfront fee. So let’s run the numbers.

Say you have a $100.00 product or service and you run a deal at 50% savings sale price, meaning the customer pays $50.00 and the deal is pre-sold. Now you get half of the $50.00 which is $25.00 from every item pre-sold, all you have to do is deliver and you pray that you can upsell or your new customer, hoping they will purchase from you again in the future. Unfortunately these type of customers are usually only shopping for deals, not relationships.

Let’s move on to some of the sites that actually generate leads and sell these to you in hopes that you can grow your business.

They actually make their money by selling the same lead to multiple contractors or make you bid on the project. Some of the ones that I know about are Angies List, Houzz, Thumbtack, and Home Advisor. They all do provide a good service. There are some questions you should ask yourself!

  • Is that service good enough for you?
  • Are you just chasing that shiny object?
  • Are these companies targeting your target market or theirs?
  • Are you comfortable just competing on price?
  • Are you comfortable being sold a lead that has been sold to 4 others?

One of our biggest challenges as contractors is we live under the false impression that we need more leads.

I know that for the most part this is not true. We need more conversions from the leads we do get.

We treat leads as sales instead of nurturing them. If they don’t purchase right now, we write off that prospect and go get more leads that are low hanging fruit who do want to buy now. We basically throw away the names of the ones that don’t close today.

You should be in the lead generating business and work the leads until you can’t get anything more out of them, like juicing an orange. With your leads be like the company that juices the oranges. They get all the juice they can out of the orange, and then they get all the oils out of the rinds, bottling it up and selling it off. Then they take all the orange rinds and sell them off for feed for animals. They get everything out of that orange that will make them a profit. Why not do that with your leads?

Stop by our resources page we have some items that will help your business grow and become more profitable.

Check out this episode!

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