Residential leads services, trade associations and marketing (to contractors)

michael stone
Michael Stone makes some compelling points.
michael stone
Michael Stone has taken on the major residentially-focused lead service websites in a recent newsletter posting. He makes some compelling points.

Michael Stone takes a pretty hard shot against certain residentially-focused lead services, celebrities, and trade associations in one of his recent blog/newsletter postings. It’s pretty compelling reading. I’ll let you read the names he names in his own words, not mine, because I won’t deviate from my policy of never negatively identifying individuals or organizations in this blog.

The question to me: Is he right? Stone argues that contractors give away their search engine position/status to these organizations either unwittingly or (more seriously) by intentionally signing on to their free or (even worse) paid listing referral services. In the most severe situations, he says, the services gather data and then, through their higher SEO status, direct individuals who may have been looking for you to your competitors. This happens when your business identity becomes subsumed to the listing service’s search report/ranking — so when consumers seek  you, they find the listing service reference associated with your business, and then browse through, ugh, your competitors’ names — and the ones who pay the service the most may end up with the lead.

Purchasing their services may give you a boost for a time period, but ultimately, you become a slave to the organization(s) for your marketing and website traffic/leads. Stone says you are much better off developing your own presence on the web and staying far, far away from these organizations.

He says the problem has been aggravated by trade associations accepting endorsement deals with these services — in essence, accepting funds for marketing the services, who then skim off the marketing/leads that should go to the associations’ contractor members. The leads services exist, he writes, because contractors don’t know what they are doing, and the relevant associations should not be adding to the problem with their endorsements and support.

Here is where I’ll diverge a bit from Stone’s well-thought perspective. Call it the 80/20 rule, or maybe more accurately the 95/5 concept. There’s a small group of contractors near the top of the heap who know the value of marketing so well they’ll spend money in a manner that seems like water to those of us who are relatively mortal.

These businesses, in fact, feed my family. Although I make it my practice not to depend on a single client or even a small group of customers, there is a power curve in effect here. We receive significant, large, and repeating advertising sales contracts from these organizations, including one who also has paid one of the celebrities mentioned in Stone’s article. These companies understand the power of effective multi-channel marketing, have really solid tracking systems, and do quite well.

The difference for these organizations in relationship to the leads services relates to their relative power. They don’t need nor depend on the services for their business, and they aren’t afraid of them.

“Relative power” can be an interesting concept. I spend a fair bit of voluntary time on one of the Google help forums guiding and commiserating with individuals and small businesses who built their dreams and structures on Google’s advertising revenue-sharing program. When Google cuts the ties and cash flow to publishers and videographers (sometimes seemingly in arbitrary ways), these individuals are despondent — some even suggesting they are ready to commit suicide. (I’ve never seen any evidence of these so-called victims killing themselves, but they certainly put on a show.)

Conversely, my individual account with Google’s program is tiny, generating about $100 a month. Hardly worth the time and energy, you may say. But there are intriguing spin-off benefits from voluntary work and good deeds. In Google’s case, I have achieved some status within the program that earns me a rather fun expense-paid trip each year, where I can peek inside the search engine’s operations, literally. I saw enough during my last visit to allocate a significant amount of my retirement funds to GOOGL shares. It is proving so far to be a good investment (though maybe more because of the decline in the Canadian dollar than a rise in US share prices — there are many variables to many stories.)

In other words, I certainly “get” Stone’s point. Far too many contractors passively or ineptly rely on the leads services for their business, when they can and should learn and apply the basics of effective marketing and SEO in their practices. But I don’t hold the leads services responsible for this sloppiness, and would argue that contractors can, with a bit of thought, turn the story around.

Still, Stone writes a compelling story, which I urge you to read.