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6 Tips Every Handyman Should Know Before Paying For Leads

Buying leads can be a great way to grow your handyman business fast, especially if you are just getting started.

Not only does it get you in front of customers immediately, it allows you to piggyback on the trust of a more established company.

But, just like anything else, if not done properly it can end up costing you much more money than it’s worth. It’s pretty obvious that if you don’t turn leads into actual customers, it’s not going to help your business much. In fact, it’s going to hurt it.

I successfully used paid leads to help grow my handyman business, and in this article, I’m going to share six of my best tips and strategies I learned in the process.

#1 – Remember That You Paid For A Lead, NOT a Customer

I’m alway hearing from contractors who are pissed off at Home Advisor, or whatever lead gen. service they are using, because none of their leads are converting. Naturally, the lead gen. service gets blamed (sometimes rightly so) and they want a refund.

Well, the problem is they didn’t pay for a customer, they paid for a CHANCE to get a customer. When you pay for a lead, you are paying for the opportunity to sell yourself to somebody who needs exactly what you offer, but the job is not guaranteed.

You’ve still got to earn the potential customers trust, understand exactly what they need, and be able to communicate that you are the man or woman for the job. It’s important to note that this isn’t done by just giving the lowest price.  The good customer’s aren’t just price shopping, they are shopping for a professional they can trust among other things.

In order to show them that you are the right person for the job, you will need to a combination of online and offline elements in place. Online reviews (ideally on the site they found you on) are certainly helpful, but are not necessary.  How you interact on the phone, how you communicate, and your sales skills are typically more influential to the customer decision.

#2 – Follow-Up Immediately

While paying for leads, I quickly learned that if I called a lead immediately after receiving it, I would almost always get the job. Every minute I waited my chances of getting the customer decreased substantially.

The truth is that homeowners who are looking for somebody to help them with a small repair don’t necessarily need three quotes. As soon as they find somebody who meets their requirements they’re ready to go.

Now, I’m sure this isn’t the case with bigger jobs, but I still think it’s important to be responsive as it gives a great impression. Customers love a responsive contractor.

#3 – In-Person Quotes Convert Higher

For a new handyman who doesn’t have sales training, it can be difficult to convert a lead into a customer with a single phone conversation. You just may not have the experience and customer insight to close the sale.

I remember struggling with this when I first got started.

However, by scheduling an in-person quote (even for a small job), you can get some valuable face-time with the customer. This is another opportunity to show them that you are professional and you can solve their problem. It also demonstrates that you care enough about earning their business that you are willing to drive out (for free) to look at the job and provide a customized quote.

Naturally, customers will want to reciprocate and hire you in return for the extra effort.

Personally, I don’t think offering free quotes is good business practice for the long-term (here’s why), but it’s certainly effective for increasing your sales conversion rates.

#4 – Focus On The Life-Time Value of the Customer

As a handyman, the majority of your income will usually come from repeat customers. Once somebody finds a good handyman, they go to them for almost everything.

It’s important to keep this in mind when paying for leads. You may end up paying $100 in leads before landing a $200 job. On it’s own, that’s not worth it. But, what if that customer ends up hiring you in the future and ends up being worth $5,000?  Suddenly the tradeoff is worth it.

Don’t be short-sided with your ROI when it comes to paying for leads because what you’re looking for is customers, not just one-off jobs.  Offer a great service to the leads you do get, and bank on them hiring you in the future.

Tip #5 – Use the 80/20 Rule To Your Benefit

Back when I used Home Advisor to help start my business, I paid for quite a few leads. After a while, I started to notice a trend – Leads for a certain job category almost never led to a customer.

With Home Advisor, you can got back and look at your old leads for reference. After a quick evaluation of my old leads, I noticed that 85% of my leads were for the same category.  I also noticed that I only got 10% of the jobs for that specific category while leads from other categories had a closing rate of over 50%!

So, I did what anybody would do and changed my profile to no longer accept leads from the category that wasn’t producing.  By simply evaluating my results and shifting more focus to what was actually working, I reduced my frustration and cost per acquired customer.

Unfortunately, you can’t just guess which lead categories are going to produce so you’ll have to get some date before utilizing this tip.

Tip #6 – Start With Small Jobs

A lead for a kitchen remodel is going to be significantly more expensive than a lead for a TV wall mount (usually by about 5 times). And you essentially get the same thing – the customers information.

So, unless you have a lot of confidence in your ability to turn leads into customers, you’re going to be better off starting with small job leads.

This strategy will allow you test out the lead generation, get your sales skills tuned in, and prepare for the bigger, more expensive leads. Once you get everything dialed in, you can step up to the more risky, more expensive, and more competitive leads.

Additionally, if you land a few customers for small jobs, you can always up-sell those customers to a larger kitchen remodel or bathroom remodel down the road. In fact, it will be easier to do so because you’ll already have their trust.

A Final Note

Buying leads is a great way to get your name out there fast and my hope is that these tips will maximize your results, make you more money, and reduce the cost of each lead.

But, don’t make the mistake of relying on lead generation services as your sole way of generating new business.  Doing so will leave you and your business at the mercy of the lead generation service, which is never a good idea.

Instead, use paid leads as a short-term strategy while you develop other long-term strategies to grow your clientele.

Do you have any other tips? If so, please share them in the comments below!

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  • Terrence April 9, 2015

    Dan,
    Thanks for the great tips and advice in your article about using leads and not being over reliant on them. One thing I want to ask you is what are the most popular lead generation sites out there and can you weigh the pros/cons of each? I would like to increase my customer base but am unsure of which lead gen. sites are the most effective.

    • Dan Perry April 9, 2015

      Thanks for the question and the idea for a blog post. I’ll be sure to create that content in the future.

    • John Grega April 10, 2015

      Dan,
      I’ve been using Thumbtack in my area for a few months now. Im getting 6-10 leads a week sent to me and I pick and choose which to bid on. Im closing probably 20 -30%. Costs me about $40 for roughly 10 leads so great ROI. I also just started with Red Beacon (Home Depot’s leads site) but you HAVE TO call the customer immediately or you lose out. I’ve got sent about 8 leads but so far no luck with them. Im not contacting them fast enough. Porch (Lowes site) was OK as long as I was paying to be a “preferred” vendor ($100 a month?) Leads were not that good so I stopped that and of course the free leads stopped. My site on Yelp is honestly weak and the results show…0 leads. Angies List…same thing, 0. Google, I’m on it but nothing. Craigslist, I took your advice about the headline and I get the occasional hit.

      • Dan Perry April 10, 2015

        Hey John,

        Thanks for sharing that. It’s always great to hear what is working for other people.

  • Pete May 22, 2015

    I kind of fell into the handyman business, and just now actually started one (literally, just today got my EIN and Virginia SCC LLC license).

    Anyway, how I fell into it – my wife works for a local (small) real estate company, and they were paying another real estate agent (who also, smartly, has a Home Improvement Contractors License) upwards of $150 an hour labor, to do handyman tasks. I told her I’d do the type of stuff he was doing for much less, after work and on weekends… And after only 3 months of this, I’m already having to turn down jobs, because I don’t have enough time (I have 20 months until I can retire from the Army, I.E., have to work full time until then). The owner, who manages about 120 rental properties, currently keeps 1 full time and 2 part time handymen as busy as they want to be.

    So, if any handymen out there are looking for more work, I’d highly suggest going to your local real estate agencies, creating a personal relationship with them there, and seeing what kind of work you can get from them.

    BTW, this website is awesome Dan! After only a couple hours reading, I’ve learned a ton, and ordering your books now.

    • Dan Perry May 25, 2015

      That’s great, Pete! Glad to hear of your success and thanks for sharing what’s worked for you with others. I’m sure plenty of people will be inspired by it.

    • Agustin Pabon December 17, 2015

      Pete above makes a great point. Building a relationship with real estate professionals can be very valuable. Not only do they manage property maintenance but they get requests from home owners all the time and refer those contractors they work with. Lot’s of potential….

  • Jose Lopez November 26, 2015

    Hi Dan, as I mentioned before on another post I was a former Handyman and like you I’ve used lead generation services. Some are OK and some did helped to get my name out. The problem with most lead generation company is that they will sell that lead to hundreds of other contractors. This is a bad practice and one that killing home advisor.

    Great post once again Dan!

  • Mike October 3, 2016

    Dan,

    I love your articles and podcasts. I just applied for my handyman business license thanks to your help and advice. I got a cold call from ITEX, a business bartering system. Do you or your readership have any knowledge or experience with ITEX? I did some research and found it to be a unique and intriguing concept. Then I found out (from YouTube) it costs around $30 per month to be a member and ITEX gets 6% of every transaction. That seems high considering most credit card companies take 2.5%.

    • Dan Perry October 4, 2016

      No, I’m not familiar with ITEX.

      What is the concept?

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