Filter by message states (for user id: -1, login: Anonymous):
results: 9
topic id 26197: Paying twice for the same lead
topic id 25265: Pricing
topic id 24883: The purpose of promotion and set your budget in advance
topic id 22503: Leads
topic id 22064: Questionable leads
topic id 14288: Declined "Leads" charged
topic id 19454: Marketing Executive From Thumbtack Chooses Promoted Lead, Then Radio Silence
topic id 18206: New Model?
topic id 100: Is quick reply worthy of charge?
Lar
Level 9

Is Thumbtack good value for money or not?

I've no idea how Thumbtack calculate the cost of a lead (i.e. what they charge a Pro for a lead) on their system. There must be some esoteric algorithm they use but I'm buggered if I can figure out what it is.

Regardless of how Thumbtack calculate the 'cost' as a lead, from a Pro's perspective the actual 'value' of a lead boils down to...

  1. The 'cost' of purchasing the the lead from Thumbtack.

  2. How much the lead will pay you when you are hired.

  3. The 'estimated' probability that the lead will actually hire you.

Estimating the probability that you will be hired is a tricky one, I'll have a go though...

Meet Joe the Pro; Joe is a plumber.

The probability that Joe will get hired is determined by the quality of the leads he gets, the chances that those leads will actually hire a Pro on Thumbtack, and Joe's competition, i.e. the number of Pros on average that Joe ends up competing against when trying to get his leads to hire him.

  1. The quality of the lead. Joe knows the majority of customers that use Thumbtack are 'ghosts' or 'tirekickers'. He esitmates that only 20% of the customers that use Thumbtack have a genuine well-defined need and desire to hire a plumber like him. I'll call that probability Pq. Pq = 20%.

  2. The chance the lead will hire ANY Pro on Thumbtack. There are plenty of good Pros. Joe estimates that a genuine quality lead has an 80% chance of finding the right Pro for their job and hiring. I'll call that probability Ph. Ph = 80%.

  3. The competition. At a rough guess (via Insights) Joe estimate that he's usually up against two other Pros when trying to close a lead. It's sometimes more, sometimes less, but he go with two. That means (assuming a level playing field) that Joe has got a 33% 1:3 probability of beating out the competition. I'll call that Pc. Pc = 33%

So, the probability of a lead Joe purchases hiring ANY Pro on Thumbtack is Pq (20%) x Ph (80%) = 16%.

The probability of a lead Joe purchases actually hiring Joe rather than one of his competitors is Pq (20%) x Ph (80%) x Pc (33%) = about 5% = 1:20. That sounds right to Joe compared to how he's historically been doing on Thumbtack.

A typical lead for Joe on Thumbtack is worth around $300 to Joe, Thumbtack charge Joe $10 for that typical lead, Joe's probability of turning that lead into a customer is 1:20.

If 1:20 of Joe's leads become customers then Joe would end up paying Thumbtack 20x$10=$200 for those leads, one of whom ends up hiring Joe for $300. Joe earns $300-$200 = $100 from that lead before any of Joe's expenses. Joe calculates that he is effectively paying Thumbtack a 'finders fee' of $200/$300 = 66% for a typical lead.

Joe thinks that's way too much. He works with a few 'agencies' who find him guaranteed work and he pays them a 15% 'finders fee' for each job. Joe thinks about a compatative 'finders fee' that he'd like to pay Thumbtack taking into account that he's doing a load a work on Thumbtack replying and chasing up 20 leads just to get 1 hire. Joe figures that a reasonable 'finders fee' he would like to pay Thumbtack is 10%, it's an nice round number.

Joe gets out his calculator and does the math. The typical job is $300, the 'finders fee' he would like to pay Thumbtack would be $300x10%=$30. That sounds about right.

Joe has to pay Thumbtack for 20 leads before he gets a hire, he therefore has a 5% probability of getting hired, so he'd like to pay $30x5% = $1.50 per lead. Paying $1.50 per lead would make using Thumbtack worthwhile to Joe. Paying $10 does not make financial sense to Joe. The lead's he receives from Thumbtack aren't worth that.

 

Here's the bottom line.

Countless Pros on this board have complained that they are being overcharged for leads. 

Put yourself in Joe's shoes and figure out what you feel you feel you should be charged so that using Thumbtack becomes a sound financial investment for you.

You know how many of your leads are 'ghosts' or 'tirekickers'. You know what you will quote a typical lead. You know what Thumbtack are charging you for a typical lead. You know who how many other Pros you are usually competing against.

Figure out what your reasonable 'cost' per lead should be and then compare that to what Thumbtack is currently charging you per lead.

You'll be able to make an informed decision whether or not the money you are spending on Thumbtack is a sound financial investment for your business. If it is then you're getting good value for money, you're doing great. If it isn't then you'll have a rough idea of a cost per lead that would make it worthwhile for you to use their service.

Cheers,
Laurence.

3 responses

Re: Is Thumbtack good value for money or not?

Lar that is an awesome breakdown and I thank you for it. I myself have quit using TT all together and only keep my profile active so I can give potential customers a link to my reviews. I worked hard for them and they are mine and if I delete my account they are no longer visible. I hope TT sees the error in their "improvement's" and goes back to the TT I signed up and had great success with however I believe they are going to keep it this way because of the amount of money they collect off of everyone using the promote feature.

Highlighted
Lar
Level 9

Re: Is Thumbtack good value for money or not?

Thanks @Bateshandyman, I'm sorry that your no longer actively using Thumbtack. As you say the main residual benefit from being dormant on Thumbtack will be your reviews. It might be a good idea to take screenhots of your review; you never know what may happen in the future.

As Pros I think we are overvaluing and importance to Thumbtack. What we think our importance to Thumbtack should be and what our importance actually is as Thumbtack themselves are concerned are I think two different things.

If we were on the same page as Thumbtack then (a) I think we would see a more concerted effort by Thumbtack to engage with its Pros and (b) we would be aware of Thumbtack actively working towards resolving the many issues Pros have been reporting. We really don't see anything those two things happening and in fact it appears as if Thumbtack are for the most part disengaged from their Pros. 

Sure, we have this forum, the moderators help with usage issues and pass on our feedback and suggestions to the 'powers that be' but that's really as far as it goes. I haven't seen any engagement from anyone at Thumbtack who is in a position to effect any meaningful change and has the will to do so. Marco's Q&A was a bit of a waste of time. I'm still waiting for him to answer my question and the Q&A was over a week ago,

We ponder 'why isn't Thumbtack listening to us' and I think its because Thumbtack realize that they don't really have to listen to us. Our goals as Pros and Thumbtack's goal as a business are misaligned. If an individual Pro is successful on Thumbtack then I'm sure Thumbtack are happy for them. If they're not successful then I don't think Thumbtack will be too concerned.

Why do I think this way? Because despite all the hue and cry over the past few months from Pros on this board we've seen nothing tangible emerge from Thumbtack to address our concerns and issues.

In my category very few customers visiting Thumbtack actually end up hiring a Pro. There are 200,000+ Pros using Thumbtack and because so few Pros are getting hired I believe Thumbtack has an overabundace of Pros on its books. Thumbtack have more than enough Pros to service the needs of customers. If some Pros decide to step back from Thumbtack there are plenty of Pros willing and able to take their place. For every Pro that stops using Promote today they will be another Pro taking their place tomorrow. 

As Pros we're a 'commodity' to Thumbtack. Our importance to Thumbtack is primarily defined by our willingness to regularly purchase leads from Thumbtack.

I don't think Thumbtack have any genuine interest in making its Pros successful, if they did then...

  • They would not be immediately advertizing the leads that we purchase from them to our competitors before we've had chance to contact our leads.
  • They would be concerned that 10 Pros can pay for a lead and that lead doesn't end up hiring any of them.

...plus countless other facets of Thumbtack's system that by design are hindering and undermining our primary goal as Pros (which is to turn the leads we purchase into customers) whilst at the same time maximizing Thumbtack's own opportunites to generate profit.

As much as we might object to the 'unfairness' of everything we see going on I think we are fooling ourselves if we expect Thumbtack to entertain any idea or suggestion that they deem would negatively impact the ability of their new Search/Promote system to generate profit.

It's all about Promote now, that's the push, it's where the money is. It doesn't matter if we as Pros think Promote is broken, or unfair. It doesn't matter if we're getting fewer leads, or if we complain about paying too much for leads, or that we're always getting 'ghosted'. All those things are secondary to Search/Promote and the new system's ability to increase revenue. 

We may think the system is broken but so long as the system is meeting Thumbtack's revenue projections the system is working fine for them. They're not going to fix things to be the way we want them to be if as far as they're concerned the system is working fine.

I think that's why we see so little meaningful engagement from Thumbtack with its Pros. The system is probably working for them more or less as they want it to and it isn't broken at all.

Cheers,
Laurence.

 

Julius
Level 7

Re: Is Thumbtack good value for money or not?

Spot on Laurence,
It was so much better the old way when TT leads we're not responded to. TT said 80 percent were not being answered. It was so much more fun kicking the tire kickers in the teeth by hitting the delete button. Now TT is being paid for every single lead many times over with the Pay To Promote feature. The thrill of the hunt is gone. The lead does not feel that they can beat down the pro because TT has already beat them down and are able to furnish an endless supply of Joe Blows . Putting the tire kickers in charge and making paying pros look like beggars. This makes the lead suspicious,lazy and now the lead deletes the paying pro while TT eats our lunch. TT stays in control by keeping the pros out of control . Pros don't trust TT and leads don't feel TT satisfies the larceny in their hearts anymore. It's just too boring. I'm just so glad I never ever used the pathetic I would just LOVE to work with you prompts when leads would not reply.