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If you’ve been in this industry for any amount of time, you’ve almost certainly received calls from these companies that sell “leads”. Most of them have a pretty decent pitch. Especially if you’re just starting out, it’s easy to be taken advantage of by these companies. They pretend to help you increase your workload, when all they really do is make money by selling you peoples information. It’s predatory and a scam.
If you look at the math, it makes absolutely no sense to buy leads. If you generate your own leads, if you know your business, you’ll probably close 1 in 5 jobs you estimate. That’s not too bad. If this is what these “lead generation” companies offered, it wouldn’t be a bad deal. But what they really do is sell the same lead to other Contractors. This puts you in a situation where you are competitively bidding against other companies - not a great spot to be in.
If they sell the lead to you and 4 other contractors, your closing rate just went from 20%, to 4%. That means that instead of needing to provide 5 estimates to get one job, you’d have to buy 25 leads and estimate all of them, just to get one job. So let’s call it what it is: A SCAM!
We had a remodeling business in Austin TX for 10 years. And, like many others, we made the mistake of forking over our hard earned cash to these companies. But quickly realized that this wasn’t bringing us any work, and costing a lot of time and money. So, I came up with a way to reap the benefits of these companies without giving them any money.
Here’s how I did it:
I ran ads through Google Adwords, and used these companies' names as my keyword. Most people use keywords like “Kitchen Remodeling” or “Bathroom Remodeling”. The problem is, everyone uses those keywords, so the cost per click is very expensive. We were paying up to $5 a click for using the keyword “remodeling”.
Almost no one was using the “Home Advisor” as a keyword. Home Advisor isn’t going to run ads using their own name, because if people search “Home Advisor” the first thing that pops up is their own website. So I ran ads using “Home Advisor” as a keyword. Before there was no one else bidding on these keywords, I was paying as little as 8 cents a click, instead of the $5 dollars it cost to use “Kitchen Remodel”.
I also used every other company name I could think of. Houzz, Angies List, and even suppliers like “IKEA” or “Premium Cabinets”. Then I started using the names of other larger Remodeling Companies. The biggest of these in TX was “Statewide Remodeling”. By using their names as a keyword, I was able to get thousands of impressions, and hundreds of clicks for pennies.
Now, with this you do cast a wider net. You may get some clicks that aren’t really what you’re looking for, but when you’re paying 10 cents per click, it really doesn’t matter. You’ll get more actual leads this way than if you were paying $5 per click. Let’s say out of 50 clicks, paying $5 per click, you may get 5 calls, and one closed job.
It cost you $250 dollars, and your return on investment was 10% (5/50). If you spend the same $250, but you’re only paying 10 cents per click, you can get 2500 clicks for the same price (250/2500). If only 5% of those clicks resulted in a phone call, it would amount to 250 leads! If only 2% of those 250 leads actually went to contract, that’s still 5 jobs. You pay the exact same amount, but instead of getting one job for $250, you get 5.
With this method, you can spend a fraction of what you normally would, and get the same if not more leads and closed jobs. If you run a cost per impression campaign - which means you pay for views, not clicks - and use the same key words you can get 10s of thousands of impressions for almost nothing, while everyone else is paying hundreds of Dollars for a few thousand impressions.
Using these tactics, I was able to double the amount of leads we were getting, while paying less than half the price. The best part is I was able to use the names of those scam artist lead generation companies to get leads, without them ever getting a cent from me.
It’s a tactic that I’ve never shared with anyone. The reason I’m sharing it now, is because my goal is to help contractors, and improve the remodeling industry. There are too many scams out there that prey on the goodwill generated by hard working contractors.
My goal is to use my experience to actually help contractors in a way that benefits everyone, without costing contractors a single dime. I came up with another way to do that. It’s a radical new idea that I hope will change this industry for the better.
If you want to find out what that is, then check out this article I wrote: Three reasons “Lead Generation ” companies are a scam and what we are doing about it!