With remodelers scrambling for any and all prospects, lead-generation companies are receiving a lot more attention. When Alison Sturm, director of business operations at Attention to Detail Home Remodeling, in Roswell, Ga., wanted to find a good lead-generation company (LGC), she went undercover as a client. (She chose a lead she had received that was too small a job for Attention to Detail. She was willing to give the remodeler who responded a legitimate lead.) She wasn’t happy with the results.

Despite citing specific wants and needs — in particular, keeping her existing cabinets — Sturm was “hounded by a cabinet company, a plumber, and one or two people who may or may not have been remodelers,” she says. She couldn’t find company websites or do any research on them.

Chris Gash

Sturm, who has a background in marketing research, developed a series of questions to ask LGC salespeople in order to find a company she felt would offer the best lead responses:

  • Do you verify leads? Be specific, Sturm says. Ask if they verify all leads. “Yes” can sometimes means “randomly.”
  • Do you give credit for bad leads?
  • How do consumers find out about your company and its website? How much is spent on advertising locally and nationally? Where do you advertise? “If [the LGC] advertises only in places that show low-cost things, they [won’t] reach our target markets,” Sturm says.
  • If you offer trial memberships to remodelers, how hard is it for me to terminate the trial?
  • In which categories would you place my company? Sturm doesn’t want LGCs putting her company in the “electric” or “painting” categories where she wouldn’t get the proper leads.
  • Is there a monthly fee? A purchase-per-lead fee?
  • How much does it cost per lead? Does the fee differ by category? Sturm has discovered that sometimes an LGC claims that it costs $15 per lead, but then it turns out that, say, a high-end kitchen lead costs $60.
  • Do you have a preferred remodeler list? In other words, asks Sturm, “If a remodeler pays a higher price, does he or she get the leads before [the LGC] shoots them out to everyone else who pays the basic price? Clients may already have had 10 remodelers call before you’ve gotten to them, and it is your company that looks like it is harassing the client.”
  • How many remodelers do you send the lead out to at one time? You want to know how many people you are competing against once you get the lead, Sturm says.
  • If my company gets inundated with work, is there a way to put the program on hold?

Sturm hasn’t found a lead generation service she’s likely to stick with, but she’s continuing her research. “If you do the math, for every good lead you get, the price you pay, including the bad leads, may still be a cheaper form of advertising than traditional advertising,” she says. But she still finds that remodelers have to spend too much time weeding through leads to find the good ones. Perhaps LGCs are a better fit for plumbers, electricians, or other trades with specific areas of expertise.
—Stacey Freed, senior editor, REMODELING.