Overcharging for leads is real...
This issue relates to the contractors estimate vs. the price of the lead. There is no excuse for charging $60 for a lead that has budgeted and/or estimated $200. Because that means that even if I get the job I'm still only taking $140 before I even start the job.
Sometimes the customers stated budget is only $150 to $200 and I get charged $40-$60.
Again, there is no justification for this. In spite of my success on Thumbtack I might have to leave just because I can't take such a hit the profit every time I get a job and I can't just raise my prices by $60 to cover the added cost. There are some times when I add a "Thumbtack Tax" to jobs, if I can, just to defray the cost.
I believe that if you ask anyone... if you describe this situation to a disinterested party... they would call it gouging.
But I think it's just a problem that Thumbtack has had all along. They won't customize the leads generation for a particular type of contractor in a particular industry.
For example, I may be willing to pay more for a lead if I sell a recurring service, like a hairstylist; because the next time I will take all the money.
The disturbing aspect of all of this for me is that the 60 lead for a $200 job is a repeat customer. I helped her out last year and now she wants to hire me again... so she went back to Thumbtack to find me. Why? Because she thinks Thumbtack is free.
I don't know what it's going to take for Thumbtack to become profitable but this is not going to work. It is upsetting to see all these community posts and all the things that Thumbtack says it does to help vendors when they are unwilling to listen and get these things straightened out.
Further, it's at their convenience... I can longer control for my cost for Thumbtack because they have allowed themselves to charge me whatever they want. I raise my maximum lead price because I want to competitive but I would assume that they would charge more for a lead to a job that is budgeted higher.
In other words, it's unfair to charge $60 for a lead to a job that is only worth $200.
@JasonBleecher thank you for posting. I would recommend a couple of things:
- Please submit this feedback here — as we really want to make sure it is getting logged. Be as detailed as possible when you do. I have been involved in a lot of conversations around this topic and the feedback is really important.
- Lower your max lead price to a price that you feel confident and comfortable paying.
In the meantime, I will share this post with the teams working on this. Also invite you to join CommuniTEA tomorrow if you'd like to meet and talk with other Thumbtack pros and team members.
Thank you for posting and for keeping a difficult topic constructive. Hope to see more of you here!1
If I lower my lead my max lead price I will not be competitive. Thumbtack will not work if you are not competitive. I receive messages from Thumbtack all the time about the categories in which I am "not competitive." They're always trying to warn me that if I don't raise my max lead price I won't get the leads. "You have 1 service that could get more leads."
The problem is: I am paying for merely the competitiveness... the cost of the lead has nothing to do with the value of the job.
This aspect of the max lead function is questionable.
Thumbtack is only going to be as good to me as it remains profitable. I don't mind, to a certain extent, being able to control how competitive I am because I'm more established and I can "price out" the little guys.
My theory is that everyone has "maxed out" their lead price so we're back to selling on the strength of our profile.
It is so unclear how this system works; however, it only becomes questionable when the prices are so high; especially when compared to the customer's budget or the estimate.
If the price for a lead was nominal, like it used to be, I wouldn't worry about it. But we have arrived at a place where I actually need to consider whether a valuable source for leads is actually profitable enough to keep.
Therefore, I don't think this is necessarily a difficult topic... at least not difficult to understand from my perspective. I have had a very good relationship with Thumbtack as you can see from my profile and I want that to continue. It is not my intention to diminish Thumbtack in any way. In fact, I would love to discuss ways to strengthen our relationship... if they would only listen. Now our relationship is out of balance. The increase in costs has made the system no longer profitable for me.1
I agree with Jason. I do video production, and I usually don't do any projects for under $800. I've recently paid $50-$75 for leads where the listed budget was $400 - $700 or $700 - $1000. Not quite as bad as what Jason has experienced but still high. Most charges are $25-$35. Even if the listed budget is $3500 - $5000, the charge typically stays under $50. $55 for a $700 job but $45 for a $5000 job? How does this make any sense?
There has to be a formula where Thumbtack can make the same amount of money (maybe more), but also make the Pros feel like they aren't getting gouged.
Some other things would obviously have to change:
- Stop allowing job posters to select a large number of budget ranges. Limit it to 2 ranges. I had a job where the posted budget range was $400 - $5000. I got the gig and it ended up being $3400 but there is no reason the client should be able to select that many ranges. They know what their budget is. If a client comes to Thumbtack to price shop, then there needs to be another way to educate them without changing the Pro to do that.
- Get rid of the "I'm not sure" budget category.
- Give all contacted Pros a partial refund if the job poster doesn't hire any Pros on Thumbtack.
- Fix the parameters for some industries. For video production, a budget can be set for $1000 for one video or for 10 videos. Video quantities and per finished video price need to be added. I'm not interested in making videos for $100. When I select $1000 as a budget I can work with, I assume it is for a "shoot only" project or a 1 min edit at most. Not 10 x 1 minute videos.
- Change the Opportunities leads. Stop hiding the messages that are sent from Pros who aren't contacted by the job poster. This is a revenue stream that you are ignoring because you would rather not annoy the job poster with too many messages in their inbox. There are ways you could limit which Pros can contact them and how many of those Pros can. I often wonder how many first time users walk away from the platform because they didn't find a Pro that they liked and you didn't make it obvious to them that they had other Pros interested in their project.
Good commentary up there! ☝️ Agree
One small note that I incorporated in my customer dealings: at the end of a project I always tell them to contact me directly next time. No need to go back to Thumbtack now that we know each other!
As for Opportunities, I also find it a bit mystifying.0
@WDodson Of course I tell them to contact me next time. The aspect of issue to understand that not everyone works in short business cycles. By the time my client get around to hiring me again they very well may have forgotten who I am... no matter how emphatically I try to remind them. If I was, for example, a hairstylist, I would understand that the overall return on that lead is multiplied by the number of times the customer returns. That's not how it works for me. I do have some fairly regular clients... maybe two or three times a year.
The important aspect of the issue is that customers don't know that they are costing their vendors money by using Thumbtack. I figured that the idea is to keep it that way because we don't want people to think twice about using the Thumbtack service. But with lead prices like this, with fundamental problems in the pricing scheme the act of shielding potential customers only benefits Thumbtack. It is incumbent upon us as vendors to let the world know that when you contact someone through thumbtack be aware that you could be irrevocable taking upwards of $40, $50, even $60 from that person. Are you really serious about needing this service? Are you sure you are ready to commit to assigning someone to this project? Are you aware of the going rate for this service?
If we don't tell people that we are being charged for their inquiry they will continue to allow Thumbtack to charge us at will using mystery calculations.1
I agree with your suggestions and I want add a number of things to each of the suggestions you're making here.
Customer's Stated Budget: There is something about the budgeting that suggests that people can ask for a premium service for very little money. If someone wants me to do a job that costs $150 I might do it because it's probably really easy. The issue lies in allowing someone to state a budget that is inexcusably low for something that just doesn't cost that little. Further, those leads are charged as if they were going to be worth a lot more because they be more expensive. I have to start with most of my Thumbtack leads by asking for more money and explaining to them that work cannot be done competently without another $200, $300 or more. In short, I have a customer who stated they want to spend $150 on something that costs $300... and I was charged $30.
"I'm not sure" = "I'm not serious"
Refunds. Looking back over the years, Thumbtack's eroding respect for vendors began in earnest when they stopped giving refunds for bum leads. They genuinely destroyed their trust in the vendors when that happened and the bad feelings have continued as they continued to charge for leads that, for example, ask for a photo session in the snow in southwestern Oklahoma. (Where it never snows). The refund policy kept Thumbtack honest because they didn't want to tell people that the service isn't really free. So you get bum leads. People aren't serious... low budget, unrealistic budget, unrealistic expectations... but the door is open. We were free to discuss expectations without trying to sell reality to someone. Now that's all gone and Thumbtack continues to scrape money by refusing refunds with no explaination and no apologies. If being here was a matter dignity I would have left years ago.
"Fix the parameters for some industries". You almost got it right. Thumbtack's official policy: "Fix the parameters for some industries. But not others." As I read all these 'feel good' articles in the community it is clear that if Thumbtack wanted to fix the parameters for my industry they would have done it by now. The funnel, the litany of questions a potential customer must answer to be match with a vendor doesn't fit almost ever. I could make so many substantive suggestions on how to fix the pricing, estimating, scheduling, ect; in fact, I have, in the beginning, when I still thought they might listen. After a while you just don't have time to fight anymore. Again, if my pride were at stake, I would have left a while ago.
Whenever Thumbtack makes a change they make is sound like it was a suggestion from their vendors. But I find myself asking, "What vendor would want that?" Maybe one suggested it. And that makes it okay to say that we all wanted it. Sometimes they make it sound like they're doing you big favor by adding some meaningless feature. I am never going to use Thumbtack to schedule clients. I really hate it when someone figures out how to pay me through Thumbtack. I really didn't want to start taking payments through Thumbtack but I figure the transaction fees might help them turn a profit and drive down the cost of the leads. I want to do anything I can to help and support a platform that brings me work. The questions is: what are they doing to support the vendors... their real customers.
As far as opportunities: I think it's fair to give the chosen vendors a goodly amount to time to respond. One irony I discuss with clients using Thumbtack is to remember that good vendors are busy; therefore, not having the time to respond to your brief as quickly as the lowballer waiting to jump on your lead and take advantage of your impatience. And it does feel very 'spammy' when the customer only choses two or three vendors and, suddenly, they're getting tons of emails from people they don't even know. I agree that there is more they can do to find the correct vendors... for example, you might be seeing opportunities for a job when you should have just gotten the brief. If you know you can help this person why should you have to wait? On Thumbtack, these nuances will never be refined to make it work the way you want it to. That's because, in order to do that, they would have to give you an advantage over other vendors. Even the vendors that are in no position to get paid $3500 for a job. That's the missed opportunity.
I really don't have the time to devote to writing these long-assed comments here when they are met with such futility. I know it sounds like a lot of complaining... and I totally am complaining. But this service could be really great with some sincere work. I believe Thumbtack could be profitable. They're killing themselves. So it is the lost potential that upsets me more than anything. Lost potential for vendors, employees and investors.1
I have been on Thumbtack for over 6 years
600+ hires @ 98% 5 star top pro, platinum etc etc.
I just got charged $198 for a single contact to swap out 5 existing light fixtures. This is wrong and unethical. The job may take a couple hours and gross $250.
I believe I will be filing a complaint to the better business bureau.
Thumbtack has lost their way as evident by the comments here. They can conduct the business how they want but I am now going to seek other forms of lead generation. This platform does not listen to their pros and seems to be more interested in short term gains at the pros expense.1
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