Should I Start a Contractor Marketing Agency?

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Should I Start a Contractor Marketing Agency?

Chloe Philipp
Rental Property Investor · Member since 2017 · 8 posts · 1 vote

Hello BP community!

After doing my last couple of remodels, a crazy idea hit me. Not sure if the concept is groundbreaking or if I'm reinventing the wheel, but the contractors working the job had been doing the same kitchen and bathroom remodel for the past few years. These guys had the skills and organization to build entire homes, but the only thing preventing them from doing so was their inability to reach new customers. If they could create a marketing strategy that would revamp their websites and social media channels, along with incorporating search engine optimization (SEO), they would have the ability to generate more leads and convert those leads into more sales/deals.

I’m looking into starting a marketing agency dedicated specifically to contractors. The company would help these contractors convert leads into deals, but also allow them to bid better projects and take on bigger jobs. Most contractors don't have time to do all of this themselves, so the agency would provide all the services for them. The services would include things like updating and managing their websites, creating profiles on and managing social media channels, and providing SEO services to help generate traffic to their websites. Does this sound like something contractors would find beneficial for their businesses?

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Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
7y

Good contractors dont go looking for work , the work comes to them thru their reputation . Most dont want more work . Why ?  then we have to hire more employees , then the quality goes down and or the price goes up . Most established contractors have found their sweet spot . They dont bite off more than they can chew . And we have learned how to say "No" to unprofitable work . 

Most good contractors are small operations , and have good employees , that are well paid . ( good employees are hard to find and harder to keep) . Thats why good contractors dont come cheap .  And why contractors sub out quite a bit . 

A contractor marketing agency is basically a general contractor .  The general gets the work , hires subs and makes 25% and up mark up .

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  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    7y

    Most contractor's won't even think of it so you'd probably find the biggest hurdle in marketing your own business to them and showing why they should shell out the money for it.

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  • Account Closed
    Vendor · San Diego, CA · Member since 2016 · 55 posts · 16 votes
    7y

    @Chloe Philipp that actually seems like a solid idea because of the same reason @Aaron K. cited. Due to the fact that most contractors won’t have a ton of knowledge or experience on these advertising platforms, specific keywords would be affordable to purchase and a basic AdWords campaign would do wonders for exposure. 

    Literally every single post on this forum is people in specific regions trying to find contractor services!  Clearly there’s a disproportionate number of people seeking someone for a service that isn’t effectively being marketed. 

    Maybe some of the more prominent members can chime in? 

    1Reply
  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    7y

    @Account Closed plenty of contractors just not many that provide both quality and affordability, the problem would also be that the OP would not be able to discriminate between the two, so yes the OP's business might do alright but we'd be back in the same boat we are now where there are plenty of contractors and not enough "good" contractors.

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  • Chloe Philipp
    OP
    Rental Property Investor · Member since 2017 · 8 posts · 1 vote
    7y

    @Aaron K. Thanks for the feedback, your point makes a lot of sense. From what I’ve gathered about the contractor industry, good contractors are so busy being good contractors and working on projects, they don’t have time to effectively market themselves to potential clients. After working a job all day, they don’t have the time or the additional resources to implement a successful marketing strategy. Most contractors are at the mercy of their direct network, which is mainly composed of word of mouth referrals. A person’s network determines their net worth, right? If these contractors could establish an online presence and build out their network, they would be able to reach more investors (like the ones on BP) looking for their services.

    It is very difficult for most people, especially investors to pair up with good contractors because of the inability of most to market themselves properly. Today, people use the internet to find almost everything. Why wouldn’t they turn to the internet to find an affordable, investment friendly contractor?

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  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    7y
    Originally posted by @Chloe Philipp:

    Hello BP community!

    After doing my last couple of remodels, a crazy idea hit me. Not sure if the concept is groundbreaking or if I'm reinventing the wheel, but the contractors working the job had been doing the same kitchen and bathroom remodel for the past few years. These guys had the skills and organization to build entire homes, but the only thing preventing them from doing so was their inability to reach new customers. If they could create a marketing strategy that would revamp their websites and social media channels, along with incorporating search engine optimization (SEO), they would have the ability to generate more leads and convert those leads into more sales/deals.

    I’m looking into starting a marketing agency dedicated specifically to contractors. The company would help these contractors convert leads into deals, but also allow them to bid better projects and take on bigger jobs. Most contractors don't have time to do all of this themselves, so the agency would provide all the services for them. The services would include things like updating and managing their websites, creating profiles on and managing social media channels, and providing SEO services to help generate traffic to their websites. Does this sound like something contractors would find beneficial for their businesses?

    What would you estimate the cost to be?  Some of the issues contractors face with social media is they have been burned by the early bird run of the mill sites. They paid and didn't get results. Of course there wasn't any personalized service like you are talking about.  I personally think its a good idea but only if its affordable. 

    1Reply
  • Account Closed
    Vendor · San Diego, CA · Member since 2016 · 55 posts · 16 votes
    7y

    @Mike Reynolds  That's a great point - the same way investors are looking for affordable labor from contractors, the shoe should fit on the other foot.  Think the OP's main question was whether or not the service had a tangible value proposition from a contractors perspective.   

    @Chloe Philipp Are you moving forward with this service?   

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  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    7y

    @Account Closed Yes, I think its an awesome idea. I think the key would be to show how the service pays and not what it costs. But to start I think it would have to a low introductory for the first ones because they have been burned by so many other that promise the moon and give only the cheese. 

    This is a main issue with most contractors. They dont advertise the right way and rely on word of mouth. Those other exceptional builders that cant compete in the mass marketplace on a yearly basis become spec builders and the customers come to them that way. But there are remodeling companies that gross 100-200 million a year in some of the big cities. They have their own marketing dept though. It would be a benefit for remodelers more than builders but builders could gain from it too.

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  • Chloe Philipp
    OP
    Rental Property Investor · Member since 2017 · 8 posts · 1 vote
    7y

    @Account Closed

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  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    7y

    @Chloe Philipp I'd start with those word of mouth referrals if you only want to serve good contractors, while it may sound counter-intuitive making this business more exclusive may actually be beneficial in the long run as you'll get a better reputation.  For the first couple you may have to offer services very cheaply or even free because as you mentioned most good contractors are too busy being good contractors to do much else.

    Much of the time it is contractors sitting on their hands all day and overcharging that are actively looking at marketing.

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  • Leo Poon
    Rental Property Investor · Queens, NY · Member since 2018 · 99 posts · 70 votes
    7y
    @Chloe Philipp thumtback and angielist are connecting contractors with homeowners and investors already. I think you are trying to bring traditional contractors an online presence and increase their SEO ranking which is not as direct as thumbtack and angielist that are giving leads to contractors to quote.
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  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    7y

    @Chloe Philipp Not really sure what a fair price should be. I would approach it as how much it would cost not to have it. Maybe you could even charge a small percentage of the work you can get them? I also agree with the above post that you should vet your customers pretty good at least at first. Quality over quantity. 

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  • Chloe Philipp
    OP
    Rental Property Investor · Member since 2017 · 8 posts · 1 vote
    7y

    @Aaron K. Definitely agree that starting out with discounted services and word of mouth referrals is the best option in order to target those good contractors that may be interested in our services. The biggest challenge is going to be convincing these contractors that an online presence is important for the future of their business. How do you typically look for and find good contractors?

    @Leo Poon Thank you for your response. It seems like Thumbtack and Angieslist are the type of sites that target less price conscious homeowners with smaller tickets and a one-time project. Investors and builders should be the target market for a contractor as they spend more money and have ongoing work as long as the contractor produces a quality product. From our data collection interviews with small/medium sized contractor companies, the downside of Angieslist and Thumbtack are the high commission/listing fees and lack of ownership in web presence. A website is an asset for a business and having a page on Angieslist is a temporary solution and can be removed by Angieslist moderators at any point. How has your experience been with using contractors from Thumbtack and Angieslist?

    @Mike Reynolds Think that a commission based service would turn away a majority of contractors, but coming up with an affordable price that delivers a quality product is extremely important. Do the majority of contractors you come across have a website? Do you ever Google contractors when searching for a service provider? 

    0Reply
  • Kim Allard
    Member since 2018 · 5 posts · 3 votes
    7y
    @Chloe Philipp various apps already offer this. They help create website, Seo optimized, portfolio of projects, quotes, invoicing, digital payment, community, etc. Around 15$/month. Half price if you pay full year.
    0Reply
  • Chloe Philipp
    OP
    Rental Property Investor · Member since 2017 · 8 posts · 1 vote
    7y

    @Kim Allard Sounds like a great value proposition. Do you happen to know any specific companies that do this?

    0Reply
  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    7y

    @Chloe Philipp for larger jobs the internet is usually not the best place to start, the only way to figure out if someone is good is by letting them do a job, but I think just getting away from some of the stupid high prices that some of the folks that come off of Angie's List or Thumbtack charge is a great start and first impression.

    0Reply
  • Jonathan Smith
    Moseley, VA · Member since 2016 · 115 posts · 60 votes
    7y
    @Chloe Philipp I used servicemagic back years ago and I hated the clients who are just shopping pricing or not serious about the project. You would pay for a lead and you know by speaking with them that they will not do the project. If you can somehow screen potential clients to the ones that are serious about a project and would like to receive pricing that would be worth the cost. If not a percentage of the project as a fee would be better. That way the contractor is not spending useless money on disappointing leads and everyone wins. If the leads are bad you would have upset clients that feel that the service is not worth the cost. It would be nice If you can bridge this gap.
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  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    7y

    @Chloe Philipp yes most of the ones I deal with now have web sites but I am doing commercial now and some of these subs aren't even in the state. Most of these companies are used to electronic communication. But on the smaller scale like I used to be no there is not a lot that do. Maybe a FB page that has a few posts from 6 months ago. 

    These that I know are good contractors that stay busy most of the time. Then comes a dry spell and there ya go. They scramble for work. Some of the homebuilders have a website. 

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  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    Good contractors dont go looking for work , the work comes to them thru their reputation . Most dont want more work . Why ?  then we have to hire more employees , then the quality goes down and or the price goes up . Most established contractors have found their sweet spot . They dont bite off more than they can chew . And we have learned how to say "No" to unprofitable work . 

    Most good contractors are small operations , and have good employees , that are well paid . ( good employees are hard to find and harder to keep) . Thats why good contractors dont come cheap .  And why contractors sub out quite a bit . 

    A contractor marketing agency is basically a general contractor .  The general gets the work , hires subs and makes 25% and up mark up .

    2Reply
  • Wesley Davis
    Contractor · Asheville, NC · Member since 2017 · 51 posts · 29 votes
    7y

    It's a great idea.  There's a guy around here that does it part time, he doesn't actually have a "company" to do it.  He just charges a percentage of the job.  So if it's $100,000.00 job I think he charges 7% or something.  I don't know what his actual charge is but I know he does really well for being a part time middle man.  I think he actually works with sub contractors and he has a list of GCs that he calls on when one of his clients/subs needs more work.  I'd try going for it if I were you.  That's a problem my Dad had before I got old enough to help him.  He did bathroom and kitchen remodels when he wanted to build houses and do large remodels.  We do that now, but I have no doubt in my mind he would have used someone doing what you're trying to do.

    0Reply
  • Chloe Philipp
    OP
    Rental Property Investor · Member since 2017 · 8 posts · 1 vote
    7y

    Thank you all for your input and feedback!

    Moving forward with the idea and have a few responses below:

    @Aaron K. Thank you, that makes sense. The internet is not usually the best place to start when looking for a contractor. The reason it’s not a good place to start is because good contractors are not easy to find on the internet. When we go out for lunch, we look up reviews and referrals online. It seems counterintuitive that we are not afforded the same opportunity when spending large amounts of money on a quality remodel.

    @Jonathan Smith Your point echoes the sentiments of many contractors and builders interviewed prior to pursuing the idea. Rather than play middle-man for a team of contractors, the agency would simply strengthen their web presence (or build it out for the first time) so they are able to directly vet leads. We are not looking to cut into contractor business because ultimately the more middle-men and subs, the higher the cost. Instead we will work directly with them to tailor their websites and organic Google traffic to attract the most relevant clients, which helps to eliminate the price shoppers.

    @Mike Reynolds Precisely my thoughts! The FB page from 6 months ago was the start of a good idea that never really gained traction. By having a dedicated agency that specializes in contractor branding, new content can be put out even during seasonal lulls. You wouldn’t hire a plumber to change out your electrical panel, so why would you try to have a general contractor build your website or market your web presence? Having a specialist makes the entire process seamless and keeps leads coming in when referrals dry up due to seasonal changes.

    @Matthew Paul Thank you for your input. What you are saying makes sense, but the marketing agency is a resource to simply help contractors build out their brand asset value. The agency wouldn’t act like a general contractor or take any markups from the job. We are here to help contractors achieve their business goals, whether that goal is to expand and take on more jobs or to generate leads with higher paying projects. The goals contractors choose for their businesses are entirely up to them.

    Even if a GC has an amazing reputation and referrals coming in daily - that isn’t a business. That is a single point of failure that is only as sustainable as that individual contractor. By wrapping a great GC around a brand, you’re creating an asset. You’re building out a system that will sustain itself long after the GC has retired.

    @Wesley Davis Thank you for the kind and encouraging words. Great work on getting your Dad setup with a website and Facebook page. That’s an awesome start!

    1Reply
  • Brian Garrett
    Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes
    7y

    Sounds like you're wanting to replicate InvestorCarrot or LeadPropeller but for contractors.

    I don't think there will be enough demand from contractors for a service like this to sustain a business though.

    Seems to me like it would be a smaller more niche business model rather than something scalable. 

    0Reply
  • Brenda Logan
    Investor · Baytown, TX · Member since 2014 · 49 posts · 12 votes
    7y

    Would this work like HomeAdvisor?  We have a contracting company and HA has been very valuable to us.  They have commercials on TV which helps the leads come in.

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  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    @Chloe Philipp  The "big boy contractors "  the ones that do 10 to 20 million a year dont employ many workers at all . They are sell and sub companies , very high prices , great contracts ( for them ) offer financing , and quality is marginal . Sell hard , and push your subs harder .  The "branded " companies are basically sales organizations . 

    Most small contractors are happy doing $500K to $ 1 million gross sales . 

    1Reply
  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    7y
    Originally posted by @Brenda Logan:

    Would this work like HomeAdvisor?  We have a contracting company and HA has been very valuable to us.  They have commercials on TV which helps the leads come in.

    It doesn't sound like that but I could be wrong. I think its more like SEO and web presence and not a lead generator.

    0Reply
  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    7y

    @Chloe Philipp There will always be those contractors that want to stay where they are. Those guys aren't your target market. I disagree with the GC being the marketer for so many contractors. That only works until the cheaper subs come around and take their place. I have been in this business for thirty + years. No matter what they tell you at first the GC will end up going with someone cheaper when the customer starts complaining that this GC is cheaper than that one. Its a shell game and always has been. 

    I was one of those myself once that was the pearl in the shell framing houses. GCs did not have loyalty past the last check. Except one and he passed away. I was talking to a guy on an online builders forum and he was an internet marketer guy. After about a year of convincing I paid him large sums of money to redo my web presence. I went from a one horse town guy to a multi state guy. At one point I had crews from Abilene Tx. to Palm Beach Fl at the same time. That was the year of Katrina/Wilma. I believe there is a market for this. But its for sure every contractor wont be interested. 

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