Buying leads is a big spend for many home services companies. In theory you are paying for well qualified buyers who are interested in your service. Saving time on calling people who aren't in need of your offerings and closing more business. But this process has become a big spend for many home services businesses without much control and a lot of room for bad outcomes. We're breaking down what the risks are in buying leads without a way to focus on the the most qualified buyers.
What makes purchased leads bad?
Poor or no actual buyer intent:
It’s very EASY for a home owner to fill out a form on a lead aggregation tool like Angi. But easy form fills don't necessarily mean strong interest. If your leads do not have to do any real research to request information, then they are likely exhibiting low buyer intent behavior. Paying for leads that have little to no quantifiable buying behavior is bad enough, paying your team to chase them down is just throwing good money after bad.
These are the same leads EVERYONE else has:
If you are paying for leads from an online aggregator, then they are NOT unique. If you are paying for google ad-words, you are one of MANY. While these may be some of the ‘standard’ ways to get in front of potential buyers, they do not differentiate you in any way from competitors b/c you are all talking to the same leads. Online purchased leads are likely to be the most competitive opportunities you have. If you chase the wrong ones, you might be giving up revenue from the others.
No budget or under market price:
Purchased leads may not have any information on what market rate is for your service. This means that you pay for the opportunity to reach out, regardless of the buyers budget for what you sell. If you are selling services that cost 10's of thousands of dollars, you can benefit from having a general understanding of the home owners financial situation (such as credit, home value, etc…).
Unrealistic expectations:
This is one of the most common complaints from home services providers. The buyers do not understand the job details and therefore their expectations are not reasonable or in the scope of the project. When you are purchasing leads, you may need to spend extra time educating your buyer about what you offer and what options are available to make sure that you aren’t signing up for a job that you cannot fulfill to unrealistic expectations. Some buyers are habitually unrealistic and seeing that intel ahead of a job can help you avoid big risks and a ton of wasted time.
Payment risk:
The #1 complaint of home services businesses is late or short payment. Purchased leads might be great, they may pay you in full and on time…. Or… they might not. The issue is that you have no prior knowledge about the buyer and they are basically a black box. So you are walking into a job that you paid for already, with little understanding of the financial risks that it might present.
There’s a better way… Screen your prospects!!!!
For most home services businesses, sifting through good and bad purchased leads is ‘just the way it is’. But we suggest that you set yourself up for success by incorporating a client screening process using customer intelligence to score your opportunities.
Here is an example:
Buyer #1: Inbound Lead. Wants to book a job for a $17,000 drive way replacement.
Buyer #2: Inbound Lead. Wants to book a job for a $20,000 backyard landscaping project.
***Which client will you spend the most time on - who do you get on site with first - given both jobs are winnable, how do you prioritize your crew?
Turns out that Buyer #2 has a history of giving bad reviews to lots of other businesses, bragging about not paying for things and has previously refused to offer payment information up front (or even within a reasonable time frame).
It’s that little bit of context that changes the entire decision making process. Clearly buyer #1 is my priority with this additional information. I spent a minute or two looking at additional insights and likely avoided a big time and money suck.
This is what customer intelligence can do for your business by creating transparency into what is a very dark market of purchased leads.