Stay informed. Sign up for our weekly newsletter
and receive Chapter 1 of Markup & Profit Revisited.

Construction Programs & Results Inc

We Like to See The Good Guys Win!

Are They Helping or Hurting?

by Michael Stone
Porch Professional Features

I was taken aback recently by the promotional advertising for the 2015 Remodeling Leadership Conference next week. One of their top speakers is the CEO of Porch, a lead generating company. Another is Mike Holmes, listed as "America's Most Trusted Contractor".

I'm not convinced that Porch is interested in helping our industry. From what I've seen, I think they're only positioning themselves to make money off contractors. And I'm not sure who decided that Mike Holmes, a Canadian, is America's most trusted contractor.

What bothers me the most is that the two major industry associations, the National Association of Home Builders (NAHB) and the National Association of the Remodeling Industry (NARI) are major partners in this event. How can they support an event that essentially endorses these speakers and at the same time say they are looking out for our best interest?

The Remodeling Leadership Conference is an event produced by Hanley Wood. Hanley Wood is a business offering magazines, publications, tradeshows and other events in the construction industry. Remodeling Magazine, which produces the valuable "Cost vs. Value" report every year, is a Hanley Wood publication. Hanley Wood also has a business relationship with Porch.

I won't take issue with businesses being involved in this event as long as it's all upfront. I object to industry associations partnering in the promotion of these speakers, especially Porch, a lead generating company.

In my opinion, there are three reasons a construction business should consider joining an association: to gain more knowledge on how to run a successful business, to gain credibility in their market making it easier to generate leads and make sales, and for the social and community activities.

Lead generation companies have one goal: to attract leads for jobs and sell leads and/or advertising to contractors.

The cost of developing a website has dropped considerably in recent years. It's now significantly less expensive than buying leads, and you have better control over your content. Associations should be helping you discover how to market your business online, not helping other businesses make money off you.

Now there are more players in the market like Porch and Amazon, who just announced their Home Services program. They're jumping in because there's a lot of money in the lead generation business, mostly because many contractors don't adequately market themselves online.

Porch obviously expects to make significant profits since they've now raised a total of $100 million from investors. Gang, investors only invest when they expect to see a significant return on their money. If you're a construction business owner, you're likely to be the one providing that return.

This is how it happens. An article published just last week has this quote from the CEO of Porch, Matt Ehrlichman: " . . . every day the 3.2 million home service professionals on Porch upload their completed projects, building out an increasingly unique and rich data set."

Do the math, that's an average of 64,000 home service professionals per state. Putting it in perspective, California reports 284,000 licensed contractors; Arizona, 37,000; Washington state, 53,000*. Does Porch want us to believe that practically every home service professional in the U.S. has signed up with Porch?

But read it more closely. It says "3.2 million home service professionals on Porch". It doesn't say that you've all signed up, it says that you're on Porch.

Public info, like your company name and address, can be in their database and they can use that to capture leads. Our friend Brian Javeline has done a great job of showing how lead generation companies are using your information. Go to Google, type in your company name and the name of any lead generation company. Or visit the lead generation website and look for your information. If you see a link to your company name, go see what info is available. Is it your phone number? If they give an option to send an email, does it come to your email address?

Did you give them permission to use your name? Either an average of 64,000 home service professionals per state gave Porch permission to use their name, or they're using names without permission.

Now notice how they advertise their Premium membership, which currently costs $100/month: "Get your business listed correctly across hundreds of Websites and search engines through our Porch network" (emphasis ours). So if it's listed incorrectly now, for instance with a different phone number than yours, you have to pay $100/month to have it corrected?

There's also this advantage to becoming a Premium member: "Leads from your profile page go directly to you instead of other professionals" (emphasis ours). Gee, thanks.

Today, while Porch is still getting started, it only costs $1,200/year if you want potential clients who find your company name on Porch to be able to reach you instead of another professional.

This gets to me. The contractors I know are hard-working people who bust their behinds to make a decent living for their families. They're crawling under houses through God knows what, drilling out studs to install electrical wire, climbing on roofs to repair leaks. They clean up and head out to sales calls, then come home and put together estimates for clients who might or might not use their services. They pay their suppliers, employees and subs before they pay themselves.

In my opinion, Porch is just the latest in a long line of lead generation companies looking to make money by taking advantage of those hard-working people. And national associations, who should be looking out for contractors, are instead partnering in an event that features Porch, acting as though it's an asset to the construction industry. I don't consider Porch an asset to the construction industry. The construction industry is an asset to Porch. The way I see it, they'll make money when you pay them to keep control of what should be yours anyway: your name.

I know that business is business. Porch, Hanley Wood and their investors want to make money. But associations should exist to help us, not to help investors make money. Isn't that why you pay membership dues?

I've long been a supporter of joining your local association; the networking and assistance you receive from other members can be valuable. The social side of associations is also great. It gets lonely being self-employed; it helps to spend time with other business owners who understand what you're going through. But don't join an association unless they are devoted to helping you and only you.

If you're a member of either NARI or NAHB, call your local office and give them heck for partnering in an event that supports Porch (or any other lead generation company), because they aren't looking out for you. They'll probably tell you they aren't responsible for the decision, but they can sure share your opinion with those who are responsible. And before you give them more money by renewing your membership, ask pointed questions about their future plans. If you and your business aren't their first, second, and last concern, it's time to find another group to join.

And please take charge of your online identity. Don't support a lead generating company when you can do it yourself for so much less money. Read the horror stories online so you don't become one. Get a basic website, get it optimized, get on it. You won't have to spend thousands of dollars, but if you don't do it, it'll cost you dearly.

If you find yourself listed on Porch or any other lead generation company's website, and you didn't sign up for a free listing with them in the past, ask to have your information removed. You don't need them competing with you for your own name. Let us know what happens.

We often promote Brian Javeline's webinars and his MyOnlineToolbox website marketing training. Brian has never paid us any money or referral fees; we promote his training because we know that he provides a valuable service to contractors. Brian promotes our book; we've never paid him any money or referral fees, either.

The MyOnlineToolbox Marketing & SEO training videos are short lessons with practical changes you can make to your website so that anyone searching online for your company or your specialty finds you, not a lead generation company. When it's your website, your information is correct. They'll call you, not someone else. You're in control, not subject to whatever the latest lead generation company needs in order to give their investors a return on their money.

*Figures aren't perfectly comparable. State figures likely include commercial contractors and duplicate records for contractors with more than one license. They won't include home service professionals who aren't licensed as contractors, such as maid services.

**If we're misrepresenting Porch and/or the advantages they offer to the construction industry, they're welcome to send us a clarification. We'll publish it with our next newsletter.

subscribe now

to receive our Wednesday morning newsletter