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Why Lead Generation Companies are a Bad Idea

Tuesday, November 1st, 2011

Money is Tight!The experts say that this ‘tough economy’ is going to go on for several years before finally hitting a tipping point back into some sort of stability.  Times are already straining for many businesses, and news like this isn’t good for those riding the almost-going-out-of-business fence.

Today I stumbled upon a press release about a local real estate company that hired a lead generation company to help them generate more customers (in theory).  The lead generation company’s website gives four easy steps to generating leads:

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SEO Band Aid 1: Paying for Leads

Friday, March 6th, 2009

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?

Building a Brochure Website the Easy Way

Thursday, February 12th, 2009

Often I’m contacted by small businesses without a lot of money who need a website.  They are usually put off by the costs associated with building a quality, SEO friendly website.  They just want their business online.

While I agree that they are missing most of the potential of being online, I also see that these business owners may simply be getting online because of a knee-jerk reaction to something that happened recently in their life:

  • A customer asked (or many customers ask) about their website.  They had to admit they didn’t have one.
  • A business colleague mentioned that he got his website up and running, and is excited about it.
  • A rival business launched their website
  • At a recent Kiwanis/Chamber/Seminar they heard about the great conversions online retailers are getting.

There are plenty more, but these are the core reasons that I’ve heard over time which ‘kicked the business owner into gear’.

So what do we (web developers and SEO geeks) do with these customers when they are recognized?  Do we simply state a minimum budget and leave them with a ‘take it or leave it’ attitude?  Should we simply refer them on to one of our friends that do crappy work on the cheap?

No! We take the gig.

If you have a potential client who wants a website, but really has no clue what they want, it is our duty and our assignment to explain to them what they need – an online presence that creates leads and sales!

Now I’m not saying take every gig that calls.  There are some business owners out there who want everything for nothing.  They are usually more demanding than serious business owners, and they waste a ton of your time on frivolous things.  Those customers you dump off to your web designer friend (or enemy).  But those business owners who have a viable and profitable business in an industry that lacks serious SEO competition, and just need a brochure website – take them.

I often take these clients simply because I see the potential.  If you can build them a website that won’t take a lot of time and can be easily optimized, why not?  When they start seeing leads trickle in, you’ll be in a great position to explain what you do and how you can increase that traffic tremendously.  It’s leverage.

So what’s the secret of setting up one of these ‘brochure’ websites without spending a ton of time doing so?  WordPress.

Even though it’s main function is blogging, you can still use it as a great foundation for what your business owner needs.  Creating pages is extremely simple, and finding a template for them is seriously quick.  Within just a few hours you can have them a website up and running – to the tune of whatever you quoted them (I’d say $600 bucks including 1 year of hosting and a domain name would do the trick).

The good news is, if they call you in a few months and need to add things, all you have to do is create a new post/page on the site, and its up.  It’s linked.  It’s ready to go.  No backend coding, no huge amount of time spent doing markup.  Copy. Paste. Publish. Done.

And if they turn into a serious SEO customer, you’ve already got a nice foundation to build upon.

Revenue Sharing? Plug Those Leaks!

Thursday, November 6th, 2008

I recently took on a new title: Director of Internet Marketing for a local real estate firm. We worked out a deal where I get a portion of the revenue that is generated because of their website. Any lead that comes from the Internet is credited to me, and if it turns into a home sale, I get ca$h.

So it behooves me to do a few things:

  • Make sure that their website is running in tip-top shape
  • Modify their site to position them for the best rankings
  • Start an offsite campaign which includes link building, listing their site on Yelp!, Mixx, etc
  • Fine-tune the PPC campaign to produce highly targeted traffic
  • and more

The biggest part of my mission in this case is to get people to the website. Once they are there, I can use tools like CrazyEgg to see just where they are clicking. I can watch them coming and going via Google Analytics. I can see what pages they landed on, and I can see at what point they abandoned the website.

Now, as someone who is only making money if they actually contact the real estate agency, I need to make uber sure that those leads are not only happening, but that I can track them. That’s where the fun starts.

Currently on most websites, there are a few ways you can contact the business: email, phone and online form. These are all fine tools, but there are a few problems.

Email

Since I took over this website in an already-functioning form, the email addresses listed on the page were there long before I came along. If a new visitor sees a home they like, they can click and send an email to the agent. They can ask to see the home, ask questions, whatever. They don’t, however, have to mention how they came up with the email address in the first place.

This causes a problem, because that email address can be on the signs in the home’s yard, business cards, flyers or whatever. There is no way to 100% be sure that that lead was generated from a visit to the website. So I’ve got to fix it.

There are a few things I can do here.

  1. Change the email address
    Probably the easiest fix. Set up a forwarder that goes to the old email address, but shows that it came via website_lead@domain.com or whatever. Incidently, in this case I can’t set up a forwarder because the system that the real estate agent is set up on doesn’t allow new email addresses, and certainly not forwarders.
  2. Add a subject line message to the link
    It wouldn’t be hard to add something like this to the code: <a href=”mailto:info@domain.com?subject=Website_Referral”>
    I’ve always found this a bit hokey. First, you have to assume that the visitor is actually going to click on the email link on the website. Second, you have to assume that their browser knows how to accurately handle the click and open their email program. Third, you have to assume that the visitor won’t just delete what you’ve stuck in there and write their own.
  3. Remove the email address
    Well that’d be just plain silly. It’s an option, yes, but not one I’d do. Why take away a way for a potential customer to contact the client?

So what’s the best fix for my scenario? Number two, I guess. Hopefully it sticks. Got any other ideas?

Online forms

Forms. I love ‘em. Well, in most cases. Forms let us collect info from any visitor that cares to fill one out. They are widely used, particularly by those people who want to communicate only via online methods, who have a question, or who just don’t want to talk to someone face to face (or ear to ear).

If you have a decent amount of ‘control’ over the website server, you can write scripts to do all kinds of cool things with the forms. I’ve used Mootools to generate some fancy-looking popup forms, I’ve written fake form scripts (that look like they are searching a database, etc) and more. Forms are great as I said, unless the user won’t fill one out.

There’s a fine line you have to walk when using a form. You want to collect a bunch of information from the visitor, but at the same time you don’t want them to be turned off and click their BACK button. So you’ve got to collect just enough that you can get by, and hope they will give you more info if they are interested in your product/service.

But what happens if you don’t have ‘control’ over the server? Perhaps you use Yahoo!’s shopping cart, which lets you build a form, but doesn’t let you add custom fields (such as a CC: email address). People can fill out the form, contact your client, and you have no idea there was ever any contact made.

If you have a thank-you page of some type, you could set up a goal in Google Analytics for that page. You’d then know that someone made it that far, but that’s about all you’d know.

Ultimately, I think this one comes down to trust. You are going to have to trust that your client will credit those leads to you.

Phone calls

Ok this one is my new favorite.

In the past, a marketing company had no control over getting credit for phone calls that were generated because of their campaigns. Whether it was a billboard, direct mail, or whatever, there really was no way to track these phone calls without purchasing a second line and installing it in their clients office (expensive).

Along comes call tracking – a cool new service that lets you get as many virtually forwarded phone numbers as you’d like, at a very reasonable cost.

I’m not going to go into great detail about how the call tracking works, but let me just say I’ve used it now for several months for several clients, and there is no doubt where these leads are coming from.

Basically, I get a custom phone number just for a client’s website. It can be a local or toll free number, whatever. Same cost. When a visitor comes to my client’s website, they see the phone number and perhaps call it. The call is routed through the call tracking system directly to the clients office. They get the calls just as they did before, but the call is credited to the website – because that is the only place it is listed.

So the phone problem is solved. Leads are counted, and my pocketbook increases.

I’d love to hear other creative ways that you use to make sure those leads that you are generating actually count. As a part-time affiliate marketer, I know it’s tough sometimes to trust your end vendors – are they crediting you with all your leads, or just most of them? It’s good to know there are at least some ways that we can keep them honest (not that they aren’t – I’m just sayin’…)

Engage Your Visitors – Ask for Those Leads

Thursday, October 30th, 2008

Many many websites are built as what I like to call ‘brochure sites’. I would venture a guess that 80%+ of websites for small businesses are this way, or at least initially started this way.

Somewhere along the line someone mentioned to a business owner that they needed to get online. Having no idea what that meant, and most likely gaining bits and pieces of info from their business friends, they bought a domain and put up a brochure site.

A brochure website has simple business information. Usually these websites are just a few pages; home, contact, a services/products page and maybe an ‘About Us’ page. These websites are so 1998.

A good website now needs to not only list all your products and services individually, but it needs to engage the (already interested) visitor. If you don’t have a call to action on every product page, you could be missing out on very warm leads.