SEO Band Aid 1: Paying for Leads

This is part one of a series on “Bandaids for Your Website”.  These are things that you could do to your website, but really they are nothing more than a temporary short term bandaid.  I’ll try to use some of my real-life situations, questions and offers that I’ve experienced over the years.

The Question

Yesterday I got a phone call from a nice man who had taken my SEO seminar in Saint Louis a week or two back.  He works in a very specialized sector of the service industry, serving mostly residential customers I’d suspect.  His question was this:

“I talked to a guy yesterday who could set me up with a web page and then it could collect leads.  I would pay him $12 for each lead.  What are your thoughts?”

Pay Per Lead – The Way to Go?

In the past I’ve done some work for contractors in various industries.  One guy I remember did HVAC repair.  He was paying up to $75 each to Service Magic for air conditioning repair leads.

That’s not bad if you can convert them, and $12 is even better.  But there’s a problem:

Websites like Service Magic are great for customers looking for someone to come fix their air conditioning system.  There are many contractors on there, and their rating system, etc is a great way to pick out who’s the best one to hire for your problem.  You can get plenty of bids in a short amount of time.

But, the same thing that makes sites like this so great for consumers is also the thing that makes it so bad for contractors looking for leads: there are many contractors on the site already.

So what happens when John Doe needs AC repair and ends up on Service Magic?  Well, he fills out a form, hits submit, and that lead goes to all 20, 30, or 50 contractors that are signed up for that particular niche.

Some of these contractors (such as my caller - aka Mr. Contractor) are one or two-man shops. Mr Contractor goes out and works, then comes back to the office, checks email, phones, etc and follows up on them.  By time he follows up on the lead that Mr. Doe submitted, Mr. Doe has already had ten calls from qualified contractors, and he probably already hired someone.  Meantime Mr. Contractor is spinning his wheels chasing dead leads. As a business owner, that sucks.

Now, it should be said here that Service Magic is making $12 off of each contractor that is signed up.  They are making a killing off those leads.  So even though that lead was only $12, it still virtually has a value of $0 to most small shops.

Keeping Up

If you wanted to sign up for something like Service Magic offers, you’d need a few things:

• A full time staff member that can follow up on any submitted leads immediately.
• A guarantee that you are in a niche with just a few competitors.
• An automated system that receives leads and forwards them to a cell phone or other handheld device so you can follow up quickly.

Looking at a Long Term Plan

Sites like Service Magic also have nice Search Engine rankings.  These rankings, in my opinion, are by default, because no contractors (or very few) in Mr. Contractor’s industry are building websites to collect leads themselves.  Reasons for this could include initial startup costs, ignorance, or even laziness.

If you have a decent staff that can follow up on these leads, then you may not see the need to have your own website.  The leads are coming in, you’re making nice money and everything is good.  Well, except that a good portion of your business depends on one source.  But as long as that source doesn’t dry up, you’re good, right?

For contractors who don’t have the luxury of a phone staff, or ability to respond quickly, a good search engine-friendly website is definitely a must-have.

If Mr. Contractor were to put a few thousand dollars into building a quality-written, search engine friendly website of his own, he could easily outrank Service Magic and cull all of those leads for himself.  This long term approach could be supplemented by the short-term leads from SM or others, but there would be obvious cash issues involved.

What Do You Think?

I’m curious to hear what other contractors have experienced in issues such as this.  Are you happy paying for leads? Do you make enough profit to justify a service like this? Or do you think the long term SEO+website is the way to go?

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