Why Are Most Lead Generation Services Not Worth the Money?

Why Are Most Lead Generation Services Not Worth the Money?

Why Are Most Lead Generation Services Not Worth the Money?

Not many of us have money to burn, so being prudent with your marketing dollars is always a good idea. If you are getting a return on your marketing investment, then you should be willing to rinse and repeat those efforts all day long. Unfortunately, all too often the lead provider has designed their program to maximize their revenues, not the revenues of their contractors.  On the flip side, many contractors don’t understand how to properly respond to leads and fail to get back with the prospect in a timely manner.  This is especially true if the leads are shared as the first to respond usually gets the chance to bid.

Most contractors that have had bad experiences with online lead generation programs will tell you that

1. online lead generation doesn’t work
2. they don’t want to pay for leads, just closed sales
3. they don’t like to have to share leads with their competitors
4. they don’t understand why they should have to pay more for calls than clicks
5. if they can’t get in touch with the homeowner, then how do they know the call was real and why should they have to pay?

Since we are in the lead generation business, we would like to explain a little about what goes on behind the scenes that cause contractors to either thrive with a lead generation program or fail miserably resulting in a colossal waste of money.

1. Experiences are experiences, and we have no doubt that this disappointment with online lead generation goes on each and every day.  We can tell you that based on our years of lead generation experience, lead generation for contractors does work, and work very well.  But you need to select the right program with the right strategy and execution in order to get the return on investment you need to grow your sales.

If we had to pinpoint where the perception that “online lead generation doesn’t work” comes from, we would say it is because the lead provider is using bad sources for their leads.  This might be leads from third parties, leads scraped from lists, or leads that have been resold too many times.

2.  In the history of advertising, no publisher has ever guaranteed sales or closed business from advertising on their television station, radio network, newspaper or magazine.  Money is paid up front regardless of the impact on the advertiser’s top line.  Advertisers pay for the audience who sees or hears the advertising, not whether it results in guaranteed business.

Lead generation companies have no control over how well a lead is handled.  They should not take the risk that a contractor can’t close a sale.  All businesses need a steady and predictable source of low-cost leads and that is precisely what online lead generation does.  It is quantifiable and trackable, something that other sources of leads don’t do.  (Perhaps with the exception of direct mail, but most contractors don’t track direct mail efforts as they should.)

3.  Sharing leads keeps costs down and ensures that the potential client gets at least one good vendor to bid on their project.  The big contractor lead generation companies such as Angie’s List, Home Advisor, and Houzz want to make sure that their number one mission (to provide qualified contractors ready to bid on a home improvement project) is fulfilled.  A homeowner will not come back to their site unless they have a good experience and got what they came for.

The big secret in the world of lead generation is to close the time gap between when the customer asks for a quote and the time it takes a contractor to respond.  The chance of closing a deal goes up exponentially when the homeowner can immediately speak to someone who can solve their problem.  We are now in an era where voicemail and answering machines don’t cut it anymore.  People want to speak to a real person.  (Ask us about setting up a 24/7 answering service for your business that will also qualify leads for you and set appointments for less than it costs you to buy coffee every day.)

4.  The only way a contractor will get business from a potential client is by speaking to them on the phone.  Clicks to a website (which is what Google sells in their Adwords program) are not calls.  On average, it can take from 6 to 10 clicks to your website to get a phone call.  If you do the math you will discover that a phone call might be costing $60 to $100 if you are paying $10 for a click.  If someone offered you a qualified phone call for $50, that would be a great deal in anyone’s book.

5.  Any lead generation program worth its salt should be providing contractors with back-end access so they can listen to phone calls that have come in, when the call was made, and the number the call came from.  This way, wrong numbers, missed calls, and duplicate calls are easily identified.  This is transparent reporting and contractors should be offered this fail-safe checking mechanism.

Given these objections and reasons why contractors might have a bad experience with a lead generation platform, it is easy to see how online lead generation can earn a bad reputation in the trades.  Use this list of 5 objections to evaluate your next lead generation program opportunity to weed out the bad ones from the good.


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