Houzz of Cards: The unfortunate and ugly truth about marketplaces for pro contractors
Whether you’re looking for more leads, or just better quality leads for your construction business … it’s not easy.
As a custom home builder or remodeling company, it’s not just tough, it’s also a process that’s not designed in your favor — especially on marketplaces like Houzz, HomeAdvisor and Angie's List (we'll get into that in a moment).
Most residential home construction companies aren’t large enough to have someone on staff that is focused on the marketing activities necessary to keep the pipeline filled so it falls on you, the business owner. But, you don’t always have the time it takes to properly market to new clients because you’re busy making sure your existing clients are happy (and rightfully so).
The result is that you end up wasting money on old familiar practices that are no longer as effective as they once were. Or, maybe you try something simply because it worked for someone else.
Before too long, survival mode kicks in and you begin to worry where their next job or project is going to come from so you look for a quick and easy solution.
It’s at that time that your supposed savior, aka the online marketplace who had been hovering above like a vulture, swoops in to provide a promise of hope.
Wanting to stay alive, you buy into the pitch — hook, line and sinker.
Just set up your free company profile on our marketplace, fill it with all of your amazing photos and accolades and will send you all the leads you can handle.
I’ll be the first to say it, if you’re a large builder with a big budget, this isn’t a bad approach per se. Heck, it might even work. But, if you’re a small custom home builder or remodeler, it’s a different story.
Let’s break this down:
You get a free professional profile on Houzz — but, is it really free?
You can argue that setting up a free company profile on Houzz or Angie's List in itself isn’t a bad idea. I mean, there is nothing wrong with getting your company to show up in multiple places — especially when it’s free.
Well … that is, as long as you think that it's worth the cost.
Wait, what? Didn’t you just say it was free?
If you’re not paying for the product, you are the product
For any marketplace to be successful it needs two things: buyers and sellers. If there are no sellers (that's you), there aren’t going to be any buyers.
Marketplaces NEED you and your "free" profile content to get buyers - plain and simple.
But here's the thing, those buyers you bring them aren’t just for you … they are for you and everyone else you’re competing with for those leads.
Let’s say you’re a kitchen remodeler in Atlanta with a profile on HomeAdvisor. Obviously, you want clients in and around Atlanta, so you list that on your profile page to help generate the correct leads. If I’m a potential client that does a Google search for “Kitchen remodeler in Atlanta”, do you think I’ll find your profile page on the first page of results?
Instead, the first page of results are filled with the marketplaces you’re listed on offering up the “Top 10” or “Best 25” kitchen remodelers to work with in your market.
Of course, you may be on that list of the 9 Best Kitchen Remodeling Contractors - which we’ll discuss in a moment - but what is important to understand is that HomeAdvisor and these other marketplaces could not have gotten to the first page of search results without the profile content that you and other builders like you provide them.
Want to know just how much they rely on your content to drive traffic to their sites?
Well, in the past 6 months, HomeAdvisor and Houzz have received about 22 million visitors each. Roughly, 16 million of those visitors (70% of their traffic) have come from search engines.
Porch and Angie’s List are even higher, with roughly 75% of their visitors coming from search engines.
So, it would only seem natural that in return for your role in helping them climb to the top of search results, they would at least feature you on those top 10 and best 25 lists, right?
Of course they will … well, as long as you’re willing to pay up. Which leads us to the second part of their pitch:
Your free profile on Angie's List will get you all of the leads you can handle
Marketplaces for pro contractors make money off the leads you help them generate.
Yep, you read that correctly.
Not only are marketplaces building their network of potential clients off of the content you provide them, but they are turning around and selling them to whoever is willing to pony up — whether that company is the best fit for the client or not.
This puts you, the custom home builder or remodeler, in the same tough spot you were in before the marketplace swooped to "save your day".
What begins as a free professional profile on Houzz to generate leads can quickly lead to you being locked into an annual contract costing you thousands per year — without even a guarantee that it will actually bring you clients.
To make matters worse, in the case of Houzz, the more builders and remodelers that are willing to pay-to-play in your area, the less results you’ll see for the same amount of money.
Let’s say that you’re paying $500 per month to be at the top of results for kitchen remodelers in your area. If it’s only you and 2 other companies that are paying, you’ll show up in the top spot 1 out of every 3 searches. What happens if another 20 companies start paying after you sign your annual contract? You’re still being charged $500 per month, but now you’ll only show up in the top spot 1 out of every 23 searches. Do you think your results will be the same?
And, when your results go down, or you’re just not seeing the return you need to make it worthwhile, cancelling may not be an option. Well, at least according to some of the stories and complaints about Houzz shared by other contractors that got locked into an annual contract.
The bottom line is this: before committing any money to a marketplace, be sure you research what you're getting into and ask that nagging sales rep questions so you know exactly what to expect.
Having said all of that, does this mean that you should avoid advertising all together on Houzz, Angie's List, HomeAdvisor, etc.?
Not necessarily. If you have a big marketing budget to spend, it could be beneficial to your business. However, if your budget is small or non-existent and your time for marketing activities is limited, there may be a better ways to spend your limited resources:
The better approaches to generating leads
Amaze your existing clients
As we’ve written about previously, it’s a statistically proven fact that 50% or more of your future clients are going to come by referrals from the clients you have today.
The only cost in order for that to happen is to deliver an exceptional experience for the clients you serve today.
Doing this takes some extra effort on your part, but it’s a worthwhile investment that directly benefits you and your business — not your competition. Plus, happier clients makes the job that much easier, which means you and your team are happy as well.
Check out our article, 3 steps to increase client referrals for your construction business to learn more about generating leads by boosting word-of-mouth.
Engage and inspire potential clients where they already are
If you’re someone that believes using social media for your business is a waste of time, it’s about time to expand your beliefs.
The one in particular that you especially need to pay attention to is Instagram.
The fact is, clients are now using Instagram to find the contractors they want to work with. And, builders and remodelers like you are growing their business by posting inspiring photos of their work and building relationships with an audience of potential clients.
In fact, builders like Johnny Hourihan from Vintage Builders have it down to a science.
If you want to see how Johnny and other builders like him have turned Instagram into their biggest source of new clients, we compiled their best tips, tricks and advice in this Complete Guide to Instagram for Custom Home Builders and Remodelers.
Improve your ranking on search engines
When someone searches online for a home builder or remodeler in your area, wouldn’t you like it to be your website on the first page of results? Without having to pay for it?
Of course you would, but that’s easier said than done, right?
Organically appearing on the first page of search results is not an easy task, nor is it something that magically happens overnight. But it is both realistic and achievable. And, it doesn’t need to cost you a dime, just time and commitment.
While search engines don’t openly share the exact recipe it requires to make it to the top of results, there are some tried and true methods that always remain the same.
We won’t go into all of them here, but you can check out the amazing article that Builder Funnel put together on SEO for contractors, home builders and remodelers which covers everything you need to know.
Get creative and think outside your toolbox
Robert Stephens, the founder of tech support company, Geek Squad, once said that if he had started his company with a marketing budget, it never would have become as big as it has — nor would it have gotten acquired by Best Buy.
Without having any money for advertising, Robert had to use his creativity to come up with low-cost ways to get his name out there. This oftentimes meant doing things that were unconventional and against the grain of what everyone else was doing.
These don’t always need to be off-wall creative ideas, but rather just things that your competition isn’t doing. Just because everyone else puts their company's yard sign at the job site doesn’t mean it’s a good idea — or that it even works.
To help get you started, we’ve put together a free playbook which is packed full of unique and unconventional ideas to help you get noticed, capture more leads and win more business without breaking the bank.
You can steal any idea you find in this playbook to use as your own, or you can use it to spark some ideas of your own.
Just fill out the form below and we'll send The Unconventional Marketing Playbook for Construction right over to you. It’s totally free!