They are Marketers
All of these companies targeting your customers share a few common traits. First, they are good at marketing. They are better at it than most contractors (though not all contractors). If you are among the former, they will be happy to feed you leads for a percent of the sale.
They Suck Out Your Profitability
The price for the leads these companies provide ranges up to 25% of the total ticket. Even half this amount is a pretty hefty take in a world where many contractors struggle to achieve double digit net profit. Contractors may pay more for a lead than they earn from the work. This may not be bad if the contractor is allowed to nurture the customer relationship, but increasingly, that’s not the case.
Contractors taking leads through one of the big boxes are now contractually obligated to pay the big box a percentage of all future sales from the customer whether contacted directly or through the big box. This is especially irritating when the customer was an old customer of the contractor who happened to make contact through the big box because of convenience or happenstance (i.e., walking through the big box). Now, the contractor must pay and pay. Are the big boxes retailers or Mafiosi?
Virtually all of the leads providers seem unconcerned with the prices charged by the contractors. If the contractor has exclusive relationships like some of the big boxes offer, the contractor can adjust pricing to cover the cost of the lead. Most, however, promise consumers a bid process, which results in a form of reverse auction. The most desperate take the jobs.
Who Needs Who?
It’s natural to wonder… if the big boxes, warranty companies, referral companies, and dot coms are so good at marketing, why are contractors even involved? The obvious answer, of course, is these companies are good and marketing or distribution or insurance or retailing, but they are not good at HVAC service, repair, and installations. In fact, they cannot do it. They need contractors more than contractors need them.
Unfortunately, while they need contractors, they do not necessarily need you. And while there is no shortage of contractors willing to give away their services, you do not need to be one of them. They cannot do your job, but you can generate leads.
Control Your Destiny
Fail to generate leads on your own, rely on someone else to provide you leads, and you will forever be dependent. You will be trapped in a cycle of dependency, unable to charge enough to fund a marketing budget that will allow you to break the cycle of dependency.
The only way you can control your own destiny is to become good at marketing. Are you ready to start?
No one can help you market more than the Service Roundtable. Check it out at www.ServiceRoundtable.com or call 877.262.3341 and ask for a Success Consultant to give you a free tour.