Quality Leads

Discussion in 'Landscape Architecture and Design' started by Bobcat s250 NY, Mar 7, 2007.

  1. Bobcat s250 NY

    Bobcat s250 NY Banned
    from texas
    Posts: 98

    Has anyone ever used Service Magic as a lead referral service? Ifso what was your experience with them? Thank you in advance for your response.:cool2:
     
  2. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    Yes, I've been using SM for over 5 years now. You can do a search and find lots of threads here on Lawnsite over the years where I've discussed my experience with them.

    As time passes, I am becoming more and more frustrated with SM. The quality of the leads are not always very good. We're quicker to respond than almost all of our competition is in this area because I have a full time dedicated office staff who are responding to leads almost instantly. And still, we get a pretty high percentage of leads who just don't return our calls. And that's frustrating because we have paid for those leads already. I'd say probably 40% of the leads we get never call us back. I don't know if they've lost interest, maybe it was a passing whim, they already found someone else, someone else was more persistant, I don't know. But for whatever reason, we get a LOT of them who won't even respond to our calls and book an appointment for a free estimate. So that really sucks.

    Of the ones who do respond and book appointments with us, I find that we get a decent percentage of tire kickers. They are just feeling us out for price, but once they hear our rates, they aren't as interested anymore. I guess I'd generalize by saying that SM customers, overall, seem to be more "cheap" than customers we receive through our own website or from word of mouth or our truck lettering. So that's frustrating too.

    My selling percentage is definitely a LOT lower with SM leads than it is with customers that come from another method of advertising.

    Still, we got over $100,000 in jobs last year from Service Magic leads. I haven't added it all up. But it's possible maybe we even got more - like $200,000. And we did $1Mil in revenues last year. So I can't totally say SM isn't worth it. We probably spent $6K - $8K in lead fees last year. So my frustration is premised by the fact that SM customers are cheap, harder to land jobs with, don't return our calls, and compromise 80% of our advertising budget, yet only provide 10-20% of our revenues.

    Some days I can't stand SM because I've given 20 bids in 2 or 3 weeks from them and not landing one freakin' job. But then all of a sudden I land a $25,000 job from one of their leads and all of a sudden I love them again!

    It's a tough call. I am not quite ready to ditch Service Magic. But every year, I think about doing it more and more.

    I think part of the problem is that I've raised prices fairly significantly - each year - over the last several years. My labor rates for 2007 are 45% higher than they were in 2004. So we're probably slowly working our way out of that market where people compare prices and into the market where people don't care so much about price and just want good quality and reliability.

    I'd say it depends on where you are in your market. If you would consider yourself VERY competitive, when compared with other landscapers in your area, you'd probably do VERY well using SM. But if you would consider yourself more on the high end, then you may have a lot of the same frustrations I have with them.

    One good thing is you are in full control. It doesn't cost much to try them out. You set your monthly and daily spending limits. You set the territory you want to receive leads from. You set the job tasks you want to get leads for. So you can limit all these things initially, just to try them out. And then expand your spending limits, territory, job tasks, etc. if you end up liking the service.

    I've probably got more experience with Service Magic than any 5 guys combined here on Lawnsite. So if you have any more questions, let me know.
     
  3. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    One thing I will say that is very good about SM is that they pretty much completely fuel our entire Irrigation Service division. Last year I hired a FT, dedicated Irrigation Technician. His only job is to go out and fix irrigation system problems for people in the area. We charge $68.00 per man hour for his labor plus materials, which are marked up quite a lot. It's the most profitable division of our company. And without SM, we'd never have enough leads to keep my tech. busy full time. But because of SM, he's busy at least 40-55 hours every week from March to mid November.

    So they've turned out to work VERY well for irrigation system repair leads. And we seem to land a very high percentage of those leads as well.
     
  4. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    The biggest problem I have with pay-per-lead is the exact problem I have with pay-per-click traffic, and that would be incentivising or to put it bluntly, fraud... Unfortunately it's not entirely the marketer's fault, if I take for instance, paid results on a search engine: No matter what you do to the alghorhythm, a paid result is not going to rank naturally in the end-users search results because for one it's not supposed to, but by creating a higher than usual ranking for the paid result which is intended to result in more clicks, it is where we've crossed the line and the click has become incentivised, because had the result not been placed artificially where it ended up, more than likely the consumer would not have clicked it.

    As a surfer, what is your reaction when you click on an at least somewhat irrelevant result on a search engine?
    Now, what if I told you the reason the result landed in front of you is because someone paid for it to happen?
    In a nutshell, there's your problem.

    One has to hope the marketer isn't doing anything beyond that which can't be helped, at which point it could be construed as fraud, but then it is also a matter of how demanding the other end is, because one thing this type of advertising CAN do is send raw numbers with a force and speed that can't be matched via conventional methods, not even Google-Yahoo can send my site 500 clicks / hour the usual way, but pay-per-click sure can, and they can do even more than that, they can send so much it will crash the server but the more I demand, the lower the quality becomes.

    Thus it is incentivising which affects the quality and I hate to say it but it's yet another industry in the long line of you get what you pay for, suffice it to say that I've also become frustrated with the far higher than normal end cost / closure...

    It's like, yeah, it's kinda cool to get the phone ringing, but much beyond that it...sux.

    In conclusion, if I have much to say about it, it's all about the cost and right now I couldn't agree more, the newspaper is far more cost effective, it costs me between $20 - $80 per actual closed sale, the main factors that affect this appear to be my own price which has also risen by a mile, and the level of pre-screening I decide to enforce.
     
  5. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I understand your concerns. But having a good 5 years experience with both leads-based companies and pay-per-click advertising (Google AdWords and Yahoo Marketing) I can say from experience, I don't think much fraud is happening on either of those fronts.

    Service Magic leads are a bummer sometimes when you can't get a customer to return your call. But I have never once suspected it was a fake lead. If I try hard enough, I can always get a hold of the customer who sent in the estimate request. But we don't like to bug people. We'll call once a day for a few days and drop it. But I can tell by their voicemail at work or at home and by the local phone number and real local address that these are real people. Often times, I am familiar with the company they work for, I am familiar with their street, and I recognize the phone number as a local one. And like I said, any time we really want to test the system, I can call the phone numbers they have given us more frequently and eventually get a hold of them and make an appointment. I just don't like to bug people quite THAT much. But I've never once suspected a lead that SM gave us was a fake one, just to garner money. These are people with legitimate landscape needs. And just because they don't return our calls usually just means that someone else was more persistent and already got the job, or the customer decided to handle it themselves or something.

    As for pay-per-click advertising, there is a little more potential for abuse there. Only in the sense that one of my competitors, with a LOT of time on their hands, could go to the internet, and click on our ads over and over and over again, costing us 50 cents or more with each click. But Google tracks IP addresses and doesn't charge you for multiple clicks from the same person. So that's hard to do.

    And as far as getting traffic to your site, that otherwise wouldn't be interested - like you suggested - that doesn't really happen. YOU control which key words pull up your ad. So my ad will only come up when customers type in certain key words like "Portland Oregon Landscaping" or "Beaverton Landscaper". Without those kinds of key words, my ad doesn't even come up on Google. Furthermore, my ad says right in it exactly what we do, before the client even clicks. So they probably aren't going to click on our ad if they are doing a search for "landscape photography Portland Oregon" because they can tell from my ad that our site isn't about photography.

    Anyway, pay per click advertising works and works VERY well, in my experience. I am much more happy with pay per click advertising than I am with Service Magic stuff. Plus it's a WHOLE lot cheaper. At 50 cents a click, I can have 20 people click who don't call us but as long as the 21st person calls, it was well worth it. All it cost me was $10.50 or so to get a big job!!! And we do get lots of big jobs from our website and our online ads.
     
  6. awillardandrews

    awillardandrews LawnSite Member
    Posts: 9

    We used service magic for all of 2006. We set a budget with them of $400 per month. We initially bought Sod installation, Irrigation installation, and landscape Installation leads.

    Most of the Sod leads turned out to be people wanting a price on pieces of Sod. At $18 per lead we stopped buying these leads right away.

    Many of our irrigation leads were from people asking questions about there existing system, or wanting repairs. We prefer to only service our own installs, so we stopped buying these leads.

    We then spent our $400 solely on Landscape installation leads. While we did sell quite a few jobs off SM, most of the leads are garbage. We haven't actually done it yet, but I believe the $5000 or so we spent with SM last year would be better spent developing our own web site. After all, thats where SM got the lead to sell us in the first place.
     

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