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Google's New Offering May Disrupt HVAC Lead Flow

Google Guaranteed is a new entry into the online referral game. Here’s how it will impact you.

Last week at the Canadian Mechanical & Plumbing Exposition in Toronto, an agency representing Google laid out the search engine giant’s plans for Google Guaranteed.  Here’s how it will impact you.

What is Google Guaranteed?
First, Google Guaranteed appears to be an attempt to take on Home Advisor/Angie’s List and other referral sites.  Before you start cheering, be careful about what you wish for. 

Google is pushing companies to the very top of search results based on Google reviews, physical proximity, and frequency of Google verified reviews, assuming the company is participating in the Google Guaranteed program.  The company will also receive a small green badge with the notation, “Google Guaranteed.”

According to the presenter at CMPX, “This is the place we feel everyone must be.  Otherwise Google is going to forget about you.”

Yikes!

The “guaranteed” part involves Google agreeing to pay the customer up to $2,000 when “dissatisfied with work quality,” for claims submitted within 30 days of the service. 

Qualifying for Google Guaranteed
Contractors must apply to get in the program.  They must submit proof of a license, insurance, and submit to a background check. 

The type of license is fuzzy.  The presenter at CMPX said a business license was sufficient.

Insurance is even more fuzzy.  It appears a minimum amount of business insurance will suffice to get the box checked.

The background check was simply a blur.  If someone won’t pass a background check, just hold him out and do not send him on any jobs that come from Google.  Hint, hint.  Wink, wink.

The Cost to You
The program is pay per lead, exclusive lead.  It does not go to three companies simultaneously. The cost varies.  Today, it seems to range from $10 to $25 per lead and runs about half of pay per click.  This sounds like a great deal compared to other referral sites.  Of course, that’s by design.

Why is Google Doing This?
Google makes a lot of money on PPC advertising.  This will shred it.  At current pricing, it will bring in less than half the revenue of PPC, assuming every click turns into a lead, which it does not.  Why is Google doing it?

Everything about the program seems designed to attack the referral sites.  The presenter at CMPX explained, “Should I call a plumber from Google, or should I call a plumber from Home Advisor, or Angie’s List, or some other source that vets them in some way?  Well, Google’s going to respond to that and create the best vetting system so that they know that someone who searches on Google is going to find someone they can trust.”

The Problem With Google’s Approach
Google is positioning this as a way for consumers find a trustworthy contractor in a field filled with scam artists.  The presenter at CMPX said, “There are some untrustworthy contractors, outbidding everyone [for PPC], and coming to the top.  And customers and end users don’t know who to trust.”

Multiple websites use the same locksmith scam scenario to explain the rationale for the Google Guaranteed program to consumers, which likely means the scenario was provided to them by Google or its agent.  The locksmith scam is more than enough to frighten homeowners into the protective arms of Google.

While it’s true that contractors use the same fear tactic by portraying fellow contractors as scammers (except for them, of course), it damages everyone.  This approach paints the entire industry with the same broad brush of dishonest business practices.

Furthermore, the bar set by Google is so low it’s laughable.  A business license and some kind of business insurance?  Seriously?  And, most legitimate contractors offer far stronger guarantees than Google Guaranteed.  However, under this program a moonlighting technician who plays the Google review game well can come out ahead of a long established, substantial, award winning company, with top shelf service, state-of-the-art training, and excellent policies.

Google’s End Game
Google is gradually testing and rolling out the program for HVAC, plumbing, and locksmiths in 30 cities today.  This spring, it will roll out to 65 cities and add electric and garage door services. 

In time, Google will likely drive competitive review sites under or relegate them to the fringes for home services.  Then, the cost will probably escalate with only a few contractors in each market winning because they play the Google game well and spend the money necessary.

Remember, Google is not a charity.  If you do not expect them to cannibalize part of their PPC revenue stream for less revenue from a PPL program, you should not be surprised if the price per lead climbs.  Why not an ever more expensive PPC style auction?

Ultimately, Google is going to monetize voice search. The CMPX presenter explained:

“When you ask the machine to find you a plumber because you come into your home and the basement is flooded and you say, ‘Okay Google.  I need a plumber.’  Google’s going to produce one.  And they’re going to produce a plumber for you and they’re going to say, do you want them and they’re going to call that plumber for you. And you’re going to be on the phone with that plumber.  Well who’s going to be the one or the two or the three when you say one closer.  Well it’s going to be based on your location and its going to be based on Google Guaranteed.  That’s where this is going to go in three years.”

What Should Contractors Do?
Jump on the program now and milk it, but do not depend upon it.  Do not become captive.  Google can be fickle.  As the CMPX presenter said, “You don’t want to be on the wrong side of Google.  You don’t want Google to banish you.”

Fortunately, only one out of eight calls come from people going to search engines without a clue who to call referrals today. That might jump in the future, but it has held steady for the past few years.  That is because referral sites are where consumers turn when they lack an existing relationship with a contractor, do not have a friend, neighbor, or co-worker who can suggest a contractor, lack the social media network to ask for a good contractor, and do not have any marketing material from a contractor in their home at the time of need. 

Work on building your referral networks.  Work on your marketing.  Offer stronger guarantees than Google and trumpet them everywhere. 

Stay up on Google’s moves and how you can stay one move ahead by reading Contracting Business, the Service Roundtable, and Dave Squires’ newsletter at Contractors Online Access.

For information on the Service Roundtable, visit www.ServiceRoundtable.com.  For information on Dave Squires’ newsletter, visit news.hvacwebsites.com. 

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