Painting Referral Sites
There are a lot of painting referral sites that promote vetting or qualify their listed painting contractors and other homeowner services. These sites appear to serve the consumer and help ensure that a homeowner receives quality services by reputable contractors. Let me first say that they do qualify and weed out some contractors. However, they filter out the lowest common denominators, and I am not quite sure who would hire these painters, roofers, and plumbers if they were to be found by other means. The perception to the homeowner is that only the best of the best contractors are listed on their sites, and if this was true, it would not matter who you selected, you could take the lowest price painter, and feel confident that they would perform just as well as the highest cost painter. But unfortunately, this is not the case, and you may know this first hand if you have attempted to get bids from contractors on Angieslist.com, HomeAdvisor.com, Yelp, or even the BBB.
I am going to peel back the layers, and let you in on the secret of painting referral sites. My only caveat is that yes, we have participated in some of these lists over the years, with varying success. So keep that in mind. I will try not to berate each site, but will attempt to give you the truth, so that you can make an informed decision on how to best use these sites, and do research to find the best painting contractor for your project. Know that there are new painting referral sites popping up every day, and they will always have some type of monitization strategy, and you just need to find out what it is.
The BBB (Better Business Bureau)
This organization is a 501(c)(6) and their income comes from “dues of individuals business” that join their organization. While the original mission was to protect the consumer, I am not sure how relevant this is in today’s social media world. Here are the standards listed on the BBB website:
BBB Accreditation Standards: These BBB Standards For Trust represent good business practices generally and BBB Accreditation Standards specifically…
- Build Trust
- Advertise Honestly
- Tell The Truth
- Be Transparent
- Honor Promises
- Be Responsive
- Safeguard Privacy
- Embody Integrity
While I am not saying the BBB is a bad painting referral site, I just don’t think they carry much weight. I think the majority of consumers would assume that there is a very strict policy and application process to be a part of the BBB. I just called and asked what the criteria was to join the BBB. The gal on the phone informed me that to join, you need to have been in business for one year, and not have any government judgements against you. That bar feels very low. I then asked how much it would cost, and it turns out that it is based on how many employees you have, but, if you have more employees, you do not necessarily get more services. After I asked about the dues, she quickly wanted to talk about different marketing options to advertise my business through them. Clearly, the BBB has turned into a marketing agency of sorts.
The biggest value that the BBB brings is clearly from a marketing perspective, and in that, mainly in web presence. Because they have so many organizations linking to their site, the BBB has a lot of Google power. A link from the BBB is more powerful than their consumer protection powers. The BBB has a rating system, but I cannot determine why some businesses have ratings, and others do not. The BBB reports complaints against companies, but all complaints must be in writing. Companies are given the opportunity to respond to the BBB (even if they are not a member).
I believe that the BBB would better serve the community at large (as its mission states) if it was funded by means other than membership dues. I believe this creates a conflict of interest that most people do not understand. It can be a good marketing tool for businesses, but does not really provide the protection that many consumers assume it provides. I will add that they do have an arbitration service that might be helpful. I have no experience with it, but could be of help to a consumer if things get that bad.
Yelp has mainly been used to gather and aggregate reviews on restaurants and entertainment venues, but you might not know that it is a painting referral site. It is also the search platform Apple uses (through Siri) on your iPhone. Yelp is considered by some to be a social media platform, as it has a membership area, a way to message people, and in the past has organized local events. However, keep in mind, they have an advertising component which is how they create revenue. What I don’t like is their ability to screen reviews. They have a “secret” algorithm that will hide some reviews. If you are not a veteran “Yelper” than your reviews may not be seen. They claim that this is to prevent bad or inaccurate reviews. But, their formulas still allow for bad reviews. For example, we have a negative review on Yelp from someone that never did business with us. He simply did not like our deposit policy…but that review shows, while other positive reviews from actual customers of ours, are hidden.
Truth be told, we did try the platform as an advertising vehicle. We were required to sign a year contract, and when we experienced the problems of the reviews being screened, we decided to cancel our subscription. Needless to say, we have not seen great things come from advertising with Yelp. To their credit, Yelp allows the business owners to respond to reviews, which is nice…there is always two sides to every story.
There have been lots of complaints by business owners about Yelp, though, and even litigation. A hardwood flooring contractor I know actually settled in court over a Yelp review. The homeowner claimed that the floor was not done correctly and refused to pay. Brian, the owner of the flooring company received a settlement of $15,000. I have to admit, I was kind of happy about that one.
Angie’s list started out with a great concept. Let homeowners pay for access to reviews from other paying members. It is a good painting referral site, but the problem is, not enough consumers are willing to pay for this. How do I know? Angie’s list just changed to a free model because they could not scale up once they became a publicly traded company.
I have tried Angie’s list to advertise as well. We did not have any real negative experiences, but we certainly did not see a lot of traffic come from them. We tried the platform while they were planning to roll out their “freemium” model, so maybe we did not get the best of what Angie’s list has to offer. But, like Yelp, their revenue comes from contractors and businesses paying to advertise. As you can imagine, if your revenue is coming from the people getting reviewed, there will be problems. Due to the fact that they have just changed their format, I am honestly not sure how things are being done, and what it’s like to be a contractor or a consumer using their service. Just know that contractors pay to advertise to Angie’s list “members” so they get expanded exposure.
HomeAdvisor, formally known as Service Magic is a big player in the painting referral site market. You can’t really type any home service category into Google without getting a HomeAdvisor link. I am most familiar with this platform, as I have had a love/hate relationship with them since the beginning. It is a company that is based out of Golden, CO; so it is hard for me to not want to cheer for them. Yes, we have gotten some great jobs from HomeAdvisor leads, but we have also been let down in the past.
But what does it mean for you, the consumer? That is really what matters right? The HomeAdvisor team might do the best job at looking into the background of a contractor. According to their website, this is what the process involves:
- Sex Offender Search
- Legal Search for Civil Judgments
- Criminal Records Search
- State Business Filings
- Identity Verification (Social Security Number)
It is a great start, and that with the combination of reviews on their site is a good mix. However, I am not quite sure how it works when you do a search. I did one for the zip code we are located, and I had to scroll to the third page to find this:
We have good ratings, and are in the exact zip code I searched for, and yet the search brought me all sorts of painting contractors from about a 15 mile radius, and they are not categorized from top rated to bottom. Very random. So, maybe that is a good thing.
The HomeAdvisor bread and butter is their matching service though. They really want you to put in a project to be contacted by “up to 4 contractors.” When I first signed up, it was up to three contractors. This may sound like a good thing for the homeowner, but to understand why they do this, you need to understand how the system works.
When a contractor signs up and is approved; they agree to accept up to a certain amount of leads per month. Each service is priced differently based on the type of service being estimated. For painting projects, it might be $70, for a home remodel, it might be $150, for lawn care, it could be $30. Then, as the contractor, you are charged for each lead. So, if a homeowner changes their mind after signing up, the contractor still needs to pay for that lead. To bring this around, if HomeAdvisor now connects you with 4 contractors, they get paid for 4 leads no matter if you contract with a contractor or not.
From a consumer standpoint, I think this model is the best. From a contractor standpoint, I believe they are doing some great things, but I think there is room for improvement. But now you know how it happens. HomeAdvisor has some other models of how homeowners can connect with contractors, but the referral service is their main business model.
The truth is, paint contractors need to connect with homeowners, and homeowners need to connect with paint contractors, and neither know the best way to do it. My hope was to shed some light from an insider perspective to inform you how some painting referral sites work and generate money. Even the BBB which is a non-profit organization exists because they generate revenue. If they did not make revenue, they would not exist. There are a lot of other services as well that on the surface appear to be working strictly for you, the homeowner, but there is usually a monetization strategy. Feel free to leave a comment or ask me a question, as I am sure I have left out a detail or two.