Why Pay to Find a Service Provider?
By Jeff Shipe
January 26, 2016
As a business owner; I have often wondered why consumers would use an online lead generator company to find their service provider. The first thing I have concluded over the past several years is, majority of clients must not know they are paying a fee for this service. Sometimes the cost is disclosed; however, more times than not, the sites are made out to be a free service. What do we REALLY ever get for free in life, not too much? So why do we believe these sites that do all of the work; vet hundreds of companies, pay to set up their company, pay for a website and its maintenance, pay for a staff to run their company, and advertise their company, could be free? I could go on and on with the expenses involved in running these online lead generators. The answer is, there is nothing free about them.
Let me illustrate the way that you actually directly or indirectly pay for all of these free services. Let’s take a look at some of the more popular sites used today. One that is often at the top of the list when doing a search for a service provider is homeadvisor.com. Homeadvisor.com is the perfect site to illustrate the trap. The first bold line says “Always free to use” and they’ve got you. So now you enter your contact information, project information, and away your information goes. In return; you will get three (or more) contractors (those next in line) to contact you. They will call or email you, and set up a time to come bid your job. Once you select your contractor from the several people they send to you; the time comes, that you think what a nice service they offer for free. But was it really free? I think not.
What you are not made aware of is the cost the contractor pays for the lead (you) he has added onto the cost of doing your project. The total additional cost you paid generally depends on the deal the contractor had negotiated with the lead generator. These fees will vary from site to site, but are normally between 6-10% of the project cost. So let me put this into perspective for you. If you have a home improvement project that should have been bid at $4,000, you were probably charged at least $4250.00 ($250.00 extra) for the use of that online lead generator. This is also done with numerous online review companies, using varies models and tiers, based on the number of leads provided. When it comes to the larger review sites; they generally slide in a lead generator within their site disguised as a free service, then the service provider must pay for the lead. Angie’s list was once a true review site; sadly, those days are over as well.
Here is my opinion on how to save a little money on your next home improvement project. I have always felt that a consumer should feel comfortable with their purchase. You should not only trust the company you are working with, but feel that you are paying a fair price for the project you want professionally done. So how do you achieve this? It is easier today than ever with the internet at your fingertips. I think getting two estimates is a good way to make sure the price is fair (generally when bidding apples to apples, they will be within 6% -8% of each other’s price). Once you have a comfortable rapport with your sales consultant, you are then ready to move to the final and easiest step of all… the vetting process. To do this effectively, start with the company’s own website and Facebook site. This will tell you the company history, what sets them apart from others in the same trade, the accolades they have achieved, and answer the most frequently asked questions from consumers. Then check out two or three review sites for the ratings and testimonials on the company. One review site is generally not a safe play, as if you don’t know the politics behind the site, the reviews seen may be skewed. If the overall rating and the general reviews are consistent from site to site, you can be sure they are legit.
Now you can feel good about the money you saved and the comfort in knowing that you did this yourself. You will be more educated about your project, feel better about how you accomplished this decision. Best of all, you won’t spend your hard earned money on someone you will never even meet.