What is the conversion rate for a General Contractor receiving a lead from Home Advisor, Buildzoom, and Houzz's lead generation service?
Hello! Thanks for your question about the lead conversion rates from HomeAdvisor, Houzz, and BuildZoom's services for general contractors.
The most useful sources I found to answer your question are Contractor Talk and Blue Corona.
The short version is that the estimated conversion rate for general contractors receiving leads from:
- HomeAdvisor is 15%
- Houzz is 11.25%
- BuildZoom is 7.5%.
All three lead generation services use forms to collect data from prospective customers.
Below you will find a deep dive of my findings.
METHODOLOGY AND PRESUMPTIONS
I began my search by looking for the conversion rates of the three lead generation services. I received mixed results. Then I widened my search by looking into the contractors’ forums and similar websites to collect data from personal experience. I also looked into the lead conversion rate of the whole lead generation services for comparison.
I can only provide estimations because after searching extensively through trusted media sites, user forums and review sites, as well as the corporate websites, I've determined that the exact statistic or calculation on general contractor's lead conversion rates for HomeAdvisor, BuildZoom, and Houzz is not available publicly.
This might be because such information is considered private and while there are some mentions about how many total leads or revenue general contractors have generated since they used the services, the exact number of lead that successfully converted into a paid project is not revealed.
Such data would reveal how many leads that a contractor did not manage to get after sending their estimates, so it might not be something they would like the public to know. The lead generation services are unlikely to publish such data either as they cannot promise the same lead conversion rates for all its clients, especially for websites like Houzz where some contractors perform really well and others not at all.
As such, all of these percentages are educated guesses based what data I have managed to find on the internet.
As requested, I focused my search on the general contractors segment only. I've also checked each service's website to see how they collect data from potential customers.
The lead to sales conversion rate's calculation formula used is
(total number of projects gained/total number of leads) x 100%
OVERALL INTERNET LEAD GENERATION SERVICES' CONVERSION RATE
According to Blue Corona, one lead may be sent to 2-3 people at once hence the conversion rate could be 50% less than a business' normal lead-to-job conversion rate. This is assuming the lead is immediately acted upon. This is an indicator that the three websites might not have that a very high conversion rate.
This article estimated that it might take about 10 leads before a contractor can get a job, meaning the lead conversion rate is 10%.
Another article mentioned that only one or two leads out of twenty is valid, meaning the lead conversion rate is about 5-10%.
Taking into account the highest and lowest percentages mentioned above, we can safely assume that the average lead conversion percentage for the overall general contract lead generation services is (5%+10%)/2= 7.5%.
For HomeAdvisor, 1 (one) or 2 (two) out of 10 leads would be converted into a paying job. That means the lead conversion percentage for HomeAdvisor is about 10-20%. Assuming the average of that will give us a 15% lead conversion rate for HomeAdvisor.
The company offers non-exclusive leads to their clients, meaning the contractors have to act quickly since the same lead is sent to several of their competitors as well. HomeAdvisor obtains leads by asking prospective customers to fill in forms, a method you are particularly interested in.
There have been some complaints, in blogs and forum, about HomeAdvisor's customer services as well as the inability to get out of a contract even when the clients (general contractors) feel that they are not getting their money worth from the company.
For the general contractors, Houzz's testimonials are more forthcoming about the project values they won after using the services but again, no mention of the exact lead conversion rate. Within a year, successful general contractors could earn from $150,000-$500,000. One even mentioned having earned a seven figures income thanks to the website.
One of the testimonials mentioned that Houzz's leads are 50% more valuable compared from other sources. Taking into account the average conversion rate of lead generation services is about 7.5% (as explained above), we get that Houzz's general contractor's lead generation conversion is likely to be (150%x 7.5%) = 11.25%. The website also uses forms to get the lead's data.
Though it is not a general contractor, Deuren, a bespoke door manufacturer reported a 10% lead conversion rate.
It has to be noted that the reviews from general contractors using Houzz paint a very contradictory picture of its usefulness. There are those who use this website as an integral part of their business and others whose didn't even get a lead at all. I did not include businesses who got no lead in my calculations as there was nothing to convert.
There are some main points to observe when using Houzz's services in order to become successful, including taking good photos for your company profile. While the return of investment is poor, the website is a good marketing tool to gain exposure. Aptly, one of the blogs have summed it up, "Houzz is not for everyone".
Buildzoom is barely mentioned in any of the user review websites, blogs, or forums. From what I have found on their blog, the contractors who use Buildzoom also rely on other channels to market their services. They sent their leads via email and text messages, which according to a user's comment, needs to be acted on within seconds.
Since there are no solid lead to triangulate the lead conversion rate for a general contractor using Buildzoom's services, I would presume that the estimated rate for overall lead generation services (as explained above) can be applied here, which puts the lead conversion percentage at about 7.5%. This website also uses forms to obtain a lead's details.
To wrap it up, I have estimated the general contractors' lead conversion rates of the three requested websites. They are:
- HomeAdvisor: 15%
- Houzz: 11.25%
- BuildZoom: 7.5%
I've also estimated the overall internet lead generating services' conversion rate, which is 7.5%. All three lead generation services use forms to collect data from prospective customers.
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