Summary: a new industry, internet lead-generation for home service, has been emerging to control flows of consumers to home service businesses from internet searches. Local service businesses are fighting back by setting up their own websites and tuning SEO to make lead-generation engines for their businesses.
Conclusion: in a few years, home service businesses’ websites will NOT be main sources of leads from internet searches for their respective owners. Businesses should focus on leveraging social networks such as Facebook for lead-generation, and on using their sites to nurture relationships with existing and potential customers to counter the invasion by the internet lead-generation industry.
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With its recent Home Services announcement, Amazon is officially in the ring to fight for a share of internet lead-generation for local home service industry. Business owners are, in general, not excited about the new entrant and some are, legitimately, worried. Over the years, this crowded market has already seen established, upstarts and heavy-weights such as Google Local, Home Advisor, Red Beacon, Porch.com. Amazon’s announcement will intensify the war, whose sole objective is to control and profit from internet flows of customers to businesses.
This war is mainly be waged on two fronts: one is Search Engine Optimization (SEO) and the other is paid search, aka Pay-per-click (PPC). For those who are not familiar with this terms, SEO is a set of methods, technologies and best-practices in website designs and implementation with the objective to rank the website higher at various search engines, Google in particular. Needless to say, companies such as HomeAdvisor, Red Beacon, Amazon, Porch.com are masters of SEO. In fact, SEO is probably one of the most important technical competencies they must master in order to compete. On the other hand, Pay-per-click (PPC) is a mechanism by which businesses pay to have their clickable advertisements displayed. The more a business pays, the better the position in search results where the payer’s ad is displayed.
Not surprisingly, impacted business owners, in general, resent the internet lead generation industry which inserted itself between customers and home service businesses on the internet. A lot of business owners believe that the industry is “squeezing money off” them and they are seeking counter strategies to defend themselves. Currently, the most well received strategy is “Setup your own website, get it SEO tuned, to generate and own leads yourself”.
I have no doubt that this strategy is a sound and has been producing positive outcomes for now. At the same time, I am also concerned that it will be dangerously inadequate in near future. This is why:
- From consumer’s perspective, these internet lead-generation companies do provide benefits: initial round of vendor screening; price and quality transparencies; vendor selection/choices; and convenience, just to name a few. When consumers like them, they have lives and they are here to stay!
- Internet lead-generation companies are providing valuable services to businesses who have yet to establish themselves on the internet. Here are a few data points: more than 50% of home service businesses do not have internet presence. For those who have either a website or social media pages, 1/4 of them are dormant, and attracting no customers. These businesses will benefit from the services by the lead-generation companies
- Most importantly, lead-generation companies have undisputed technological (for SEO) and financial (for PPC) advantages to win against businesses in home services.
This leads to my prediction, companies of Internet lead-generation for home services are here to stay, and they will control major portion of search-based lead-generation for home service industry. In other words, the role of service providers’ websites as lead-feeders will be significantly reduced. This will negatively impact those who have been generating leads on internet and/or paying for PPC: they must pay more in SEO to get their share of traffic, or bid higher for the most relevant keywords, including keywords with strong locality flavors.
The next question: what will business websites be for if they are not main source of internet leads. This will be long discussion, but here is a simple narrative of my thought:
- Businesses need to employ more strategic marketing solutions to nurture demands for their products and services and to draw customers to them, including using social sites such as Facebook and Pinterest. Another important strategy is using “bait services” to attract customers, then nurture the relationship for bigger, conventional transactions. This is analogous to the prevalent “Info” or “Content” marketing strategy: giving something first, then nurturing the potential customers to real transactions. Examples of such “bait services” can be found here.
- Businesses must use their websites as “online nurseries” to nurture their relationship with existing and potential customers. This will become more important in the situation when businesses’ existing customers and sales leads were from lead-generation companies: whom the customers will give credit for being well served – the businesses served them or the lead-generation companies who brought service providers to the customers?
I’ll write about these issues in details in the next post. Stay tuned.
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