How does Homeadvisor generate the leads they sell to contractors? Let's find out.

Video Transcript: How Homeadvisor Works and Why Google Maps is Better

Hey, Charles Kile here, and today I’m going to show you how companies like Homeadvisor and Angie’s List snag leads from right under your nose and then sell them back to you for a profit. Then, I’m going to show you how you can beat them at their own game. You might not realize that you are even competing with them, but I assure you that you are. The good news is that you have an edge that these huge corporations can never take advantage of and I want to share that with you now.

Who Am I?

But first, who am I to talk to you about lead generation companies like HomeAdvisor?

I became a master of this topic while marketing for my family’s remodeling company, Kile Construction. Over the last 15 years, we’ve tried everything to generate leads including HomeAdvisor, Angie’s List, Porch, Bark, Houzz, and probably others that I’m forgetting about. At one time these services were pretty good but over the years the leads got more and more expensive and less and less likely to turn into jobs. It just wasn’t sustainable. 

It took me a while, but I figured out how to generate leads for myself. I got so good at it that other contractors started asking me for help. Eventually, I started a second company called Adapt Digital Solutions that is all about helping construction companies generate their own leads and take control over their business.

I know the information I’m sharing with you is true because I’ve confirmed it over and over again while marketing for my own businesses. I’ve also had the chance to practice the principles I’m sharing with you while working with other construction companies around the United States.

Client Case Study

Here is an example of one of my clients who is getting all the leads they need through Google Maps. You can see they are getting dozens of contacts per month through their website and these people are going through Google Maps to get there. But, that’s not all. We can also see the number of calls that are coming directly from Google Maps. It’s been profoundly impactful for this company and has allowed them to grow over the last two years. By sharing what I do I hope to help you do the same. So, let’s continue.

How They Get the Leads They Sell You

For the rest of this video, I’ll refer to HomeAdvisor but I’m really talking about all of these companies that sell leads to contractors. A lead is simply the contact information of someone who is interested in hiring someone to work on their home. When it’s sold to you, it usually comes in the form of a name, phone number, email address, and a description of what they are looking for.

So, how does HomeAdvisor produce the leads they sell to you? Let’s head over to the internet to see for ourselves.

There are three main methods HomeAdvisor uses to generate leads for home improvement projects so they can sell them to contractors like you. The first one is advertising.

If you search on Google for a “plumber” in your city, you will see a page that looks like this. The first 3 listings you see are Google Ads. HomeAdvisor has an agreement with Google that allows them to show up at the top of the search page whenever anyone searches for a tradesman like a plumber. In return, Homeadvisor has to pay Google each time someone clicks on this link. People will often see this advertisement and click on it which takes them to HomeAdvisor’s website where they will be asked for their contact information. Once they fill out the form, that contact information is sent to you and 3 or more other contractors immediately and Homeadvisor charges all of your bank accounts. In a nutshell, that’s how the process works. 

But, wait. Do you see these other ads? These are actual plumbers in this city competing with HomeAdvisor for the top spot on the search page. Some of them are likely using HomeAdvisor too. Do they know they are competing with the company they are paying to generate leads? It’s like paying your competition to compete with you. It doesn’t make sense!

The second way these gigantic companies are snagging your leads is by showing up in the rest of the search page. HomeAdvisor has invested millions of dollars into Search Engine Optimization which is how they are able to show up on the first page of Google Search results. If you aren’t familiar with Search Engine Optimization, in a nutshell, it has to do with how your website is built. Built right, your website will show up better than others that aren’t built as well. HomeAdvisor has paid thousands of people millions of dollars to make sure their website shows up on the front page of Google. Again, they are competing with the very same contractors that pay them! It doesn’t make sense!

The final way HomeAdvisor gets leads is through third party websites. There are thousands of home improvement blogs out there and lead reselling companies pay to advertise all over them. This strategy works well for them because they are national companies so no matter where the blog readers are from, HomeAdvisor can help them find a contractor. This is the only place I feel that HomeAdvisor adds value to the equation. It wouldn’t make sense for you as a local business to advertise on a national blog. The chance that the readers that see your ad are in your city are very slim. In this domain, it makes sense for big national companies to advertise for local home improvement projects. Finally, something makes sense.

If you haven’t figured it out yet, leads are generated by being seen. Now, how can you compete with these huge companies with their multi-million dollar budgets? Well, by using an edge that they can never get: your location.

Lead Generation Corporations are national and sometimes international entities so they will never be able to compete with you in your local turf as long as you are playing the game right.

Google Maps is a Free Way to Find New Customers

The #1 local marketing method you need to be taking advantage of is Google Maps. For some reason, they call it Google My Business but I call it your Google Maps Listing. Your Google Maps Listing looks like this.

It has your company’s information, location, and reviews as well as pictures you and your customers upload. It’s free for you to use so there’s no way you will lose your reviews if you stop paying, unlike HomeAdvisor, Angie’s List, and most of the other lead resellers. I can’t tell you how many contractors I’ve talked to that are horrified when the hundreds of reviews their customers posted over the years on Angie’s List went away when they stopped paying. It’s truly heartbreaking to lose all of that hard work. At least for now, Google Maps is completely free so reviews that go on there aren’t going away if you stop paying.

The big reason Google Maps is so powerful to you as a local business is because it’s based on proximity. This means that someone searching for your service near your location will see your Google Maps Listing on the Google Search page.

Just having a Google Maps listing will bring in leads all by itself. It might not satisfy your needs completely but who would pass up free leads? Especially if they are of higher quality than what you can buy from HomeAdvisor.

One of my favorite customers of all time found me through my Google Maps Listing before I even had any reviews and in a location, I didn’t even have anymore! Seriously, it works.

So, Google Maps based on proximity, but that’s not the only reason why Google Maps is so great. Check out the search results page when I type in “plumber in Beaverton, Oregon”.

At the top of the page, you have the Google Ads. They are paying at least $30 every time someone clicks on this ad. That is why they have to sell leads to multiple contractors at a time and charge so much money!

Right under the ads, you have Google Maps. These 3 listings get almost as much if not more exposure than the ads and it’s all for free. Being in the top 3 in your city for your service should be the main priority if you need to make more sales. If you have Google Maps but it isn’t doing anything for you, it’s probably because it isn’t set up correctly. Download the short guide book below this video if you want to see how I am making sure my company shows up in the Google Maps box.

The leads that come through Google Maps are infinitely better than leads that come through lead resellers. They go straight to you and nobody else. Besides that, the people that contact you through Google Maps are more likely to be serious than the ones that come through HomeAdvisor. HomeAdvisor needs to produce as many leads as possible, so they use methods to capture contact information from people even if they aren’t ready to hire anyone. That’s why so many contractors complain about bogus leads.

Look at what happens if I click on HomeAdvisor’s ad. They are immediately trying to get my contact information. The unsuspecting homeowner fills out this information before they even know what’s going on and that’s what you pay for when you buy a lead. It’s no wonder so many of the leads don’t even answer the phone… They get bombarded with phone calls when they were just trying to shop online.

So, I’ve shown you how you have an edge on these giant companies that they can never take away from you. Now, are you going to take advantage of this or are you happy with things they way they are now?

In my experience, it’s better to be proactive than reactive when it comes to marketing for your business and generating leads. Taking action when times are good keeps them good. Waiting until the sales dry up puts you in a desperate situation that is not conducive to growing a business.

Now go out and take some action!