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If you are a home service contractor trying to build your client base or are simply in need of new customers, HomeAdvisor has probably popped up on your radar as a way to boost your exposure and grow your business.
It seems simple. Simply have your business profile set up on there and homeowners interested in your services should be able to find you easily. Unfortunately, being listed on HomeAdvisor isn’t free. So, with all of the fees and cuts into your profit, is using HomeAdvisor worth it for contractors? Let’s dive in.
First, let’s get into how HomeAdvisor works.
The platform is a digital marketplace that connects homeowners with home repair and improvement contractors. It’s a free service for homeowners, who can enter information about their project and be presented with a list of relevant contractors in moments. However, on the contractor’s side, there is a cost to being listed on the site.
Contractors pay a fixed annual membership fee to get access to the services HomeAdvisor offers, which include being matched with qualified homeowners, having a business profile in their online directory, as well as various management and marketing tools. Additionally, contractors are also charged a variable fee for every lead that comes their way through the site.
For contractors, a membership with HomeAdvisor costs nearly $300 a year for the most basic service.
The price for each lead ranges from $20 to $65+. It’s important to emphasize that each lead, or potential customer, costs you in many cases for Non-Exclusive leads. Whether the lead is converted, and you landed a new customer or not, the fee will be charged regardless. But this is fair if the lead is relevant, what is not fair is the WAR between other contractors to get the same client.
Some leads may cost more than others based on those variables. Lead prices are calculated based on a combination of the type of service request, the location of the potential customer’s service request, and the competitors in that area.
It’s not a publicized formula and it changes over time. Contractors interested in learning more about the price can get current and average pricing for the types of leads they’ll likely get from a HomeAdvisor sales representative.
One of the pros of being on HomeAdvisor as a contractor is that it is a legitimate way to find new leads and customers. It’s increasingly common these days for homeowners to search on the internet for contractors for their home projects, so being on an industry-specific site like HomeAdvisor can be great for exposure. The platform is also relatively simple and easy to use.
On the other hand, there are definitely some cons to using HomeAdvisor. The most obvious downside is the cost of being on the site.
With the way the model works, it’s not even guaranteed that you will gain any business from HomeAdvisor. The leads could be homeowners that are simply shopping around and not interested in booking a service. Plus, HomeAdvisor sends the leads to your competitors on the platform, not just to you exclusively. Ultimately, though, if the leads don’t work out, you still have to pay the cost of the membership and the lead fee. In other words, HomeAdvisor’s ROI is uncertain.
The platform has also been criticized for the way it uses contractors’ names or likenesses to generate leads for HomeAdvisor itself. In fact, a class-action lawsuit is currently being filed against HomeAdvisor by a group of home service professionals regarding that issue, as well as other problems regarding its processes and business model. You can learn more about it here.
At the end of the day, while HomeAdvisor is a decent channel to get new customers from, it can be a costly and risky endeavor to dedicate all your marketing resources to it.
If you want to grow your business without getting into a bidding war for the same job with 3 to 5 other contractors, a powerful alternative is to invest in private digital marketing efforts that can actually bring you results exclusively. Some of the most popular ways to do this include improving your website for search engine optimization (SEO), social media marketing, online ads, among others. And if you are busy, the best way is to hire an Experienced Digital Marketing Agency Like Dot Com Media who can deliver results.
Search Engine Optimization or SEO is the art of making your business rank high on search results organically. Search engines like Google rely on an algorithm to determine the order in which content shows up in searches.