Highlighted

Re: Model of when you get charged

Community Veteran
Best Answer

@Ferbert, Imagine the drills you want to look at are on average $2000, they're made of adamantium and vibranium hence the lofty price tag. The clerk says you can look at them and even try them out but it will cost you $200 to do so. If you decide the drill isn't for you then he'll give you your $200 back. How does that sound? Would that work?

Apply that to Thumbtack.

A $2000 gig. Thumbtack charge you $20 for a lead. Thumbtack has a lot of 'ghosts' and most leads won't reply to you but let's say that you're able to close 1 in 10 of those leads. You end up spending $20 x 10 = $200 to get a $2000 gig. You essentially end up paying Thumbtack a 10% 'finders fee'. How does that sound? Would that work for you?

@Ferbert, using Thumbtack's current model do you think paying an effective 'finders fee' of 10% is fair.

The problem with Thumbtack is that they grossly overvalue the value of a lead. Thumbtack's leads are unvetted and unqualified. Thumbtack don't know and you don't know IF the lead you're paying actually wants to hire ANY Pro let alone you.

Paying $20 a lead for a $2000 gig would work for us but it wouldn't work for Thumbtack though which is why that lead with $2000 revenue potential for you will cost $50 - $100.

If 1 in 10 of the leads you purchase hire you and you're paying $50 a lead then you're paying Thumbtack a 25% 'finders fee' of $500 for each $2000 gig. If you're paying $50 a lead then you'd need to be closing 1 in 4 because then you're paying Thumbtack a 10% 'finders fee' of $200 for each $2000 gig. 

@Ferbert, with your 'typical' gig what would you typically quote a lead and how much do Thumbtack 'typically' charge you for that lead?

Regards,
Laurence.

 

 

 

 

 

Highlighted

Re: Model of when you get charged

Community Veteran
Best Answer

@Larjust to continue the thought on lead value: There is no possible way that a lead that isn't exclusive to 3 or less pros is worth anywhere near $50 for any profession.
As soon as there are more than 3 pros in the mix it is undisputed by many experts that the lead value declines rapidly. I believe several large universities did studies on this and the value of a lead became near worthless very fast after being distributed to 4 or more pros.

To play fair and with integrity, the right thing for TT to do would be to reduce lead price per pro as the number of selected pros increase. (or limit to 3 pros) 

Highlighted

Re: Model of when you get charged

Community Newcomer
Best Answer

When I first started with Thumbtack, the cut off point was the first 5 people to reply to the customer and the leads were a lot more reasonable than they are now so a few "tire kickers" didn't hurt. But $75 for "I was just curious"?

Highlighted

Re: Model of when you get charged

Community Veteran
Best Answer

Out of curiosity @mariaandskip what would you quote the customer for one of these $75 leads.

Regards,
Laurence.

0 Likes
Highlighted

Re: Model of when you get charged

Community Newcomer
Best Answer

I never persued those, too much money for a maybe. For me to get a price together for a kitchen remodel takes an immense amount of time, days. Then to pay a fair amount of money to do that as well as compete with other contractors....No thanks

Highlighted

Re: Model of when you get charged

Community Veteran
Best Answer

They're all 'maybes' though aren't they? 

If you figure the job is worth $7500 to you if you get hired, and your historical hire rate for these kinds of jobs is 1 in 10, then at $75 a lead you'd spend $750 to earn $7500 which means your 'cost of marketing' is 10%. That's a reasonable 'cost of marketing' for me. $75 for that type of lead could be 'good value' and is probably worth accepting.

If your hire rate isn't 1 in 10, let's say it's 1 in 20 (because there's lots of competition in your market) then at $75 a lead you'd spend $1500 to earn $7500 which means your 'cost of marketing' is 20%. That would be too high for me. $75 for that type of lead could be 'poor value' and you should probably decline it.

However, if estimate that the job is worth $15000 rather than $7500 then with a hire rate of 1 in 20 at $75 a lead you'd spend $1500 to earn $15000 which means your 'cost of marketing' is back at 10%. That would be OK for me. $75 for that type of lead could be 'good value' and is probably worth accepting.

The 'value' of a lead all depends on what you estimate your hire rate to be, what you estimate the job is worth to you if you get hired, and the 'cost of marketing' you're willing to accept.

 

From the comments of many Pros here Thumbtack on occasion is grossly overvaluing it's leads.

If your historical hire rate is 1 in 10 then a $300 job is worth no more than $3 if your target 'cost of marketing' is 10%.

If your historical hire rate is 1 in 20 then a $300 job is worth no more than $1.50 if your target 'cost of marketing' is 10%.

Hire rates are low on Thumbtack because all their leads are unvetted and unqualified. Most leads never end up hiring any Pro on Thumbtack. If you take the time to track the hires of your competitors in your category then over time you'll be able to see just how low they are. Easier still, go back and look at all the leads you paid for in the last 3 months. See how many of those leads actually hired ANY Pro on Thumbtack.

 

Regards,
Laurence.

0 Likes
Highlighted

Re: Model of when you get charged

Community Regular
Best Answer
75.00 more than i otherwise might have quoted...the point is...75.00 for a lead that is worth around 300.00...
0 Likes
Highlighted

Re: Model of when you get charged

Community Expert
Best Answer

@mariaandskip I see that you currently are promoting for Finish Carpentry but not the other categories that you offer. Due to this, the leads you get for those other categories may not always be in line with what you offer or nearby, but you'll always be able to choose to accept or decline the lead. Same goes for those jobs that you'll see in your Jobs tab that you can pick and choose from, which will soon have the option to sort by distance. 

Give me a 'Kudo' if you find this post helpful or mark 'Best Answer' if it answers your question.
0 Likes
Highlighted

Re: Model of when you get charged

Community Regular
Best Answer
I agree that thumbtack grossly over-values their leads or at least a majority of them. I would be fine with a 10%, and possibly up to 20% on larger projects or "preferred" leads. A few years ago the fees were more reasonable. 39.00 fee for a job i might bid for 100? That would mean i have to recoup that expense through my customer which invalidates my whole mission statementand commitment to providing affordable, quality service.
0 Likes
Highlighted

Re: Model of when you get charged

Community Regular
Best Answer
I completely feel your pain! Just today, I had a customer respond, thereby getting charged for the lead. Okay, I accept that. We start a dialogue, he even emails me the work he wants done. But then, I assume, maybe another pro he was talking to must have gotten back to him because about 15 minutes later, he responded to me by saying "I started with someone else, thank you." So basically, I just wasted $10 for one email that went nowhere.

But my biggest gripe is, a large portion of my Services is resume writing and design. Technically, that's classified as a writing service, but Thumbtack allows customers to erroneously classify their projects, which sends it to the wrong pros. They have been classifying resume writing and design as graphic design. That means the difference between a $7 lead versus a $20 lead for me!