You are a new contractor looking to secure a loyal customer base, or you are an established contractor, but you are having trouble finding leads. HomeAdvisor has probably reached out by now and has offered you their services for an annual fee and a pay-per-lead system. If you’re reading this article, you’re probably asking “is HomeAdvisor worth it?”
It sounds like a good deal at first – you are paying an annual membership fee and giving HomeAdvisor a cut of your profits every time they send you a lead. But does it work as well as it sounds on paper? Are there other ways you can generate leads without buying into the HomeAdvisor hype?
That’s what we are going to explore in this post. So, first, let’s dig into the specifics and learn precisely how HomeAdvisor has stayed in business since 1998.
Hint: it has to do with how they market themselves to you, the contractor.
If you’d like to talk to a digital marketing strategist from our team about how you can away from relying on websites like HomeAdvisor for leads, click here. We have a team specialized in SEO for contractors and may be able to help you.
How Does HomeAdvisor Work?
HomeAdvisor connects homeowners with contractors. For homeowners, it’s easy to find home service contractors quickly. Customers enter the service they require, and, in a matter of moments, they are matched with a list of contractors.
Though there are the occasional mismatched services and other technical glitches, the convenience of this digital marketplace makes it appealing for homeowners who don’t already have someone for the job.
How Much Does HomeAdvisor Cost Contractors?
However, for contractors to be listed in this digital marketplace, they must pay an annual fee, in addition to paying per lead. This system is attractive to contractors who are just starting and need to develop a solid client base. Paying the fee and paying per lead could also be appealing for established contractors who don’t want to dive or into the world of marketing.
To be listed in HomeAdvisor’s registry, contractors pay $300 annually and generally pay between $30 and $60 for each lead.
How does HomeAdvisor price leads?
HomeAdvisor considers the service request location, the home-service competitors in the area, and the type of service request when pricing leads. So, depending upon your area of operation and how many other contractors there are near you that do similar work, HomeAdvisor can charge you much more for potentially worthless leads. Some home-service contractors reported that they paid over $100 for leads that didn’t even work out.
Do contractors have to pay for leads that don’t work out?
Yes. One of the biggest complaints from contractors who use HomeAdvisor is that they must pay for leads that don’t work out. An additional problem that contractors encounter is that many consumers use HomeAdvisor only to shop around. They put in a service request to see what quotes they get.
Why not? It’s free for them to use, and they have access to TrueCost Guides, which are real-time pricing data that show the cost of similar jobs in their area. However, these misleading service requests show up as leads for contractors in the area, which means contractors have to pay when consumers only look at their options.
As a home-services contractor in an affluent or populated area, you may be paying an arm and a leg for leads that are worse than poor quality. They aren’t even genuine leads!
Home Advisor Lead Fee Schedule
If you read through HomeAdvisor’s terms for contractors, It states that they can adjust many factors concerning the lead price at their discretion. They do not have to inform you of non-material changes, like how often the lead fee schedule is updated. They also consider your continued use of their services as an affirmation of any material changes they make.
These material changes include the price. If you cannot check notifications and emails frequently, you might miss changes to how they determine the price of your leads.
With HomeAdvisor, Contractors are in a Bidding War With Other Contractors
When you receive leads through HomeAdvisor, so do all your competitors. The customer can look at different offers from other home-service contractors, meaning you’ll have to lower your price for the job if you are in an area with many other home-service competitors.
This competitive system also means you must be frequently engaged with their platform and always ready to respond to leads as they appear. If not, the job will go to someone else. However, you still have to pay for the lead.
HomeAdvisor Class Action Lawsuit 2021
HomeAdvisor’s tactics have received so much criticism from contractors that they are currently being sued in a massive class-action lawsuit.
Check out a statement from the attorneys on the case:
“Chimicles Schwartz Kriner & Donaldson-Smith LLP (CSK&D) is litigating a class-action lawsuit on behalf of Home Service Professionals against HomeAdvisor (“HomeAdvisor”) (formerly ServiceMagic), the company that owns HomeAdvisor (IAC/Interactive (“IAC”), a media and Internet conglomerate) and ANGI Homeservices Inc. (among others), for deceptive, coercive and unfair business practices related to HomeAdvisor’s lead generation services and purported benefits of Membership Programs.
- Home Service Professionals Against HomeAdvisor and their attorneys breakdown the allegations even further:
- maintaining and employing systemically flawed and deficient processes to generate leads;
- concealing and omitting material information about the quality and sourcing of Leads;
- using heavy-handed and coercive means to solicit new Home Service Professionals for Membership Programs;
- concealing and omitting material information about substantial monthly fees for mHelpDesk, a startup, cloud-based field service software;
- blatantly disregarding Home Service Professionals’ lead parameters and budgets;
distributing leads that are bogus or otherwise defective for the following reasons (among others):
- sending the same lead to more than four Home Service Professionals;
- sending leads for non-responsive and/or fake homeowners; and
- sending leads for homeowners outside of the Home Service Professionals’ designated service areas;
- adopting uniform internal procedures intended to deny and discourage refunds and/or lead credits; and,
- misappropriating HSPs names or likenesses to generate Leads for HomeAdvisor.”
Though the courts will ultimately decide the validity of these charges, it’s clear that many home-service contractors feel passionate about HomeAdvisor. They believe that they have been wronged by the business practices of HomeAdvisor and the services they offer.
HomeAdvisor and the Better Business Bureau
You can pour through hours of complaints from contractors and consumers who feel as though HomeAdvisor scammed them. Currently, on the BBB’s website, HomeAdvisor has received 1,913 complaints over the last three years. The site reports that in the past twelve months, only 650 complaints have been resolved.
The overall grade for HomeAdvisor is an A, but it has been as low as a B in the past. As of writing this, customer reviews from the BBB give it a 2.48/5 star rating.
What Are Alternatives to HomeAdvisor?
As successful digital marketers, the team here at Sagapixel knows quite a bit about digital marketing for the home-services industry. As a general rule, you should never pay a third party to generate leads for you. Any contractor referral service will operate identically to HomeAdvisor at its core – it’ll just be wrapped up in a different package.
We believe that a quality website with well-planned, SEO-optimized web copy and keyword-rich content with valuable links is the best way to get your name to appear high in the ranks of Google’s search results.
Google is the Ultimate Lead Generator
When people need something, they turn to Google to get it done. Whether consumers search for the next thing to buy or homeowners look for solutions to the leak in the basement, Google is the first place people go. Data collected through the search bar is a window into peoples’ wants and needs.
HomeAdvisor makes a profit from this process. Specifically, they are gaming the search engine system in their favor and at your expense. They take advantage of the fact that many people, in general, don’t know how SEO works.
What we are suggesting is that HomeAdvisor is stealing your leads and selling them back to you. Let’s explain this.
HomeAdvisor is Competing with Your Company on Google
The sad part is, you signed that search rank away when you agreed to the terms and conditions. When you use HomeAdvisor to generate leads, they optimize your search rank by spending a bunch of money on building links, creating local pages, and strengthening your SEO.
For contractors, HomeAdvisor functions as an SEO company that will help your company appear in the organic search when someone searches for “Plumber in Cherry Hill NJ.” This system can seem like a good thing if you are starting out or don’t have much of a web presence. However, as your business grows and you want to take more control of your web presence, the truth becomes apparent.
How HomeAdvisor Takes Your Leads Away From You
HomeAdvisor is taking your business’ name and driving leads back to their site. The phone numbers that appear in the search results for your business lead to HomeAdvisor’s employees. The links that potential customers click on when your name appears in the results take them back to HomeAdvisor’s site.
If you have established somewhat of a name for your business, this process becomes even more nefarious. HomeAdvisor is taking leads that would have come to you directly based on google search, but instead, these leads are intercepted by HomeAdvisor, who then sells the link back to you as well as your competitors.
So Is HomeAdvisor Worth It?
For a contractor not willing to invest in developing a lead generation system, HomeAdvisor may be worth it; in particular if that contractor is able to underbid the 3-5 other contractors that are likely getting the same lead.
Is HomeAdvisor worth it for a contractor that is likely to be more expensive than the others submitting quotes for a projects? It’s probably not. In this case, it would likely make more sense to engage a company that specializes in SEO for contractors and own take control of the company’s web presence. With some time, diligence, and a solid digital marketing strategy, you can start ranking in Google for many of your main keywords.
How Sagapixel Can Help You Grow Your Business
Sagapixel works with small businesses to develop and execute a comprehensive digital marketing strategy designed to help your business generate its own leads. We believe that selling a contractor a lead is no match for assisting them in building a fertile web presence to grow leads of their own.
We work with several home service contractors. They keep us around because we help them drive leads to their site directly – no middlemen. Contact us, and we can talk about how developing a digital marketing strategy will grow your business. Let’s cut HomeAdvisor out of the equation!
Further Reading
Check out our article on how you can improve your search rank if you want an introduction to some of the strategies we employ to help contractors grow their business.
For a breakdown of digital marketing terms and strategies, check out our article that talks about the differences between SEO, SEM, and SMM.
How to Cancel Your HomeAdvisor Account
If you want to join the increasing numbers of consumers and contractors boycotting HomeAdvisor, there is a way to cancel your account. Dial 877-947-3639 to speak with a live agent and tell them you want to cancel. Make sure you keep any cancellation information they provide you with for your records.
