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Business

February 21, 2022

Lead Generation Companies: Pros & Cons

Realistically, lead generation is every business’s ultimate goal. Leads are potential clients, so gathering leads is good for business. However, not all leads are created the same, and not all methods of getting them guarantee quality.

For example, you’ve likely heard about Angie’s List or HomeAdvisor. Both sites gather homeowners information to share it with home service based businesses. And both websites require contractors and home service businesses to pay to contact homeowners using that platform to look for services. It may seem similar to paying a retainer, advertising costs, or a pay per lead model. No matter which way you spin 

The PROS

Jumpstart Slow Days or the Off Season

If you’re having a tough time attracting new customers on your own, lead generation services could help you fill in the gap in between. Before deciding, you must weigh the overall advantages against the disadvantages mentioned below. If paying for these lead generation services is likely to cost you more money than you’ll make from the clients they bring in, is it really worth it?

Visibility for Newer Businesses

New businesses might not have the established online presence required to bring in new leads organically. As you’re starting to build your online presence, lead generation services can make you more visible to potential customers who won’t find your business otherwise. It’s a step towards getting you where you need to be. 

The CONS

Paying for Leads Doesn't Guarantee Job

Usually, you pay for every lead you receive, whether it’s qualified or not. This often makes your return on investment (ROI) lackluster.

For example, a paver installation company have complained that the business are not specific enough and they end up with unwanted lawn care leads. Regardless they had to pay for those leads.

Your Leads Are Shared

When you use lead generation platforms, you’re not going to receive exclusive leads. Those leads will go to other contractors and businesses providing your same services in your area, putting you in direct competition. So, even if you end up with a qualified lead and they’re interested in your company, you’re going to have to fight your competitors to win them over.

Converting Leads Is Not Easy

Since your leads are also going to your competition, you can bet that those customers in need of your services are being overwhelmed with texts, calls & emails from other contractors. This can cause your next customer to be annoyed by the time you reach out to them. Ultimately, their biggest decision point comes down to cost and quality of service. For you, balancing the true cost of that lead with the low profit margin from the job might be difficult to do.

Is a Lead Generation Service Right for Your Business?

Lead generation platforms certainly their use in the marketing world, but you shouldn’t only rely on them if you want a consistent, long-term approach. A more strategic way is to focus on building your own online presence and focusing on search engine optimization or social media marketing so your next customers find your business when they need your services.

Optimizing your listings, replying to your reviews on your Google My Business listing, maintaining a professional website , and investing in online advertising can help you bring in quality leads and position you as the go to company for the services you provide.

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