Jonathan Wells, marketing manager for Majors Home Improvement, in Milton, Fla., thought he'd struck gold earlier this year after inking a $50,000 patio cover deal from a lead produced by one of the Internet lead providers the company uses. That one Internet lead provider generated $125,000 worth of business, in January alone.
But during the following months, the service — which Wells declined to identify — yielded little or nothing that was sold. By late spring, Majors Home Improvement decided to terminate the relationship.
Internet lead brokers have been supplying home improvement companies with business for at least eight years. But many company owners who use one or more brokers say they get too many bogus leads: inquiries that are not for their product, are in the wrong market, or are pranks. “They machine gun the leads at you, and a lot of them are throw-aways,” Wells says.
VETTING PROCEDURES John Herman, owner of Thermal Sash Window and Door Systems, at one time considered Internet lead brokers “a major lead source” for his Chester Springs, Pa., company. In mid-March of last year, he phoned MyFreeEstimates.com, in Egan, Minn., to complain about lead quality. The company's rep convinced him to sign on for a monthly program “that guaranteed me lots of leads,” Herman says.
The following month, Herman says, “they pumped me about 15 leads, most of which were pretty bad.” Since some of the leads were not even for windows, Herman grew suspicious and, to test the company's vetting procedure, filled out an online application for “John Fullofit,” using his office address and ZIP code. To his dismay, the $25 lead e-mailed to him included a list of the “Top 10 things to do when receiving bids from contractors.” Among other things, the list advised homeowners to obtain four estimates and to “get a new bid from every contractor every time you get a new estimate.” Herman was livid.
LEVERAGE LOW COSTS? Eric Carstens, who founded MyFreeEstimates .com two years ago, says that the sheer volume of contacts his company receives and sells to home improvement operators precludes the ability to check each and every lead.
Though the number of appointments set on leads from lead brokerage companies like his may not be as high as leads from other sources, Carstens says the low cost of Internet leads — from $25 to $65; more if they're exclusive — makes them advantageous for many contractors, who can balance such leads against more expensive lead sources. But, he says, those with a phone room to set appointments, and a strong salesforce, invariably make the best use of Internet leads.
In fact, many home improvement companies use Internet lead brokers to augment other lead sources. Legacy Remodeling, in Pittsburgh, has used lead brokers “on and off” for the last six or seven years, says owner Ken Moeslein, who notes that to many contractors, such companies are viewed as possibly providing “the magic bullet” of abundant, low-cost leads.
Still, many companies are reluctant to dispense with any potential lead source, however hit-or-miss it might be. The quality of leads, and service, provided by brokers varies widely from one to the next. And no one's arguing with the cost. “At one point they were really good leads,” says Kris Parsons, marketing coordinator for Joe Percario General Contractor, in Roselle, N.J. “It's not a bad lead source,” she says. “It just needs to be fine-tuned a bit.”