Filter by message states (for user id: -1, login: Anonymous):
results: 10
topic id 25265: Pricing
topic id 24883: The purpose of promotion and set your budget in advance
topic id 22503: Leads
topic id 26197: Paying twice for the same lead
topic id 22064: Questionable leads
topic id 14288: Declined "Leads" charged
topic id 18721: Old format
topic id 19454: Marketing Executive From Thumbtack Chooses Promoted Lead, Then Radio Silence
topic id 18206: New Model?
topic id 7183: I'm trying to remove a credit card remove ,from payments,system wont let me
Lar
Level 9

What makes TT a 'Good investment for your business'?

Hi @Kameron

Setting aside the current problems and issues that I and other Pro's have with TT I would like to get a better understanding of what TT's goal is for me and its other Pro's.

In a post on this thread you say...

"However, we always want Thumbtack to be a good investment for your business."

I assume that the opposite would also hold true insofar as TT never wants their service to be a bad investment for its Pro's.

The phrase 'good investment for your business' is obviously subjective. Each Pro will have their own definition as to what makes TT a good (or bad) investment for their business. TT has their own definition presumably.

How does TT define 'a good investment for your business'? 

From my perspective my personal 'investment' in TT is largely a combination of the time I spend on your platform following up on leads and trying to turn those leads into clients AND the 'financial investment' - the money I pay TT for those leads.

I view the 'financial element' of my investment in TT as a marketing expense. I have other marketing expenses on other platforms as well as 'agencies' that hire me for gig and to whom I pay a 'finders fee' when they book me for a gig. 

Over say 12 months if the amount I pay TT for leads works out a being 15% (or less than 15%) of the revenue I am able to generate from those leads then I would indeed consider TT to be a 'good investment for my business'.

For the purspose of further explanation I'll refer to this percentage as being 'Cost of Marketing', the COM ratio.

Here's a couple of simple examples to illustrate what I mean.

Over 12 months on TT I pay $350 for 35 leads, I close 15 of those leads for total revenue of $3000, on average $200 per lead. My cost of marketing ratio for those 12 months (COM) is therefore $350/$3000 = 12%. With these figures I would consider TT to be an 'excellent investment' for my business. TT rocks.

Over 12 months on TT I pay $350 for 35 leads, I close 10 of those leads for total revenue of $2000, on average $200 per lead. My cost of marketing ratio for those 12 months (COM) is therefore $350/$2000 = 17.5%. With these figures I would consider TT to be a 'satisfactory investment' for my business. Not 15% but close enough that I would stick with TT for another 12 months.

Over 12 months on TT I pay $350 for 35 leads, I close 5 of those leads for total revenue of $1000, on average $200 per lead. My cost of marketing ratio for those 12 months is therefore $350/$1000 = 35%. With these figures I would consider TT to be a 'poor investment' for my business. I would seriously consider ditching TT and spending my money elsewhere.

Over 12 months on TT I pay $350 for 35 leads, I close 3 of those leads for total revenue of $600, on average $200 per lead. My cost of marketing ratio for those 12 months is therefore $350/$600 = 58%. I would consider TT to be a 'terrible investment' for my business. TT doesn't work for my business.

I realize @Kameron that using a ratio like COM is a simplistic approach to guaging the investment value of TT. There are I am sure other more complicated approaches but I use this in my business to quickly assess if I'm spending my marketing dollars wisely and effectively.

@Kameron, going back to your statement which was...

We always want Thumbtack to be a good investment for your business.

I'd like to ask you this question...

Using 'Cost of Marketing' (COM) as a benchmark what percentage would Thumbtack consider to be indicative of a 'good investment' for it's Pro's?

15%, 20%, 30%, 50%?

I'm asking this question because I have a sincere desire to engage in an honest discussion about the investment value of TT and how TT themselves define it.

I hope you will give my question careful consideration and take the time to provide an answer that will lead to a fruitful ongoing discussion. 

Regards,
Lar

States
8 responses
CLGPatrick
Level 7

Re: What makes TT a 'Good investment for your business'?

@Lar 

You're officially the first pro I've seen that thinks the way I do.  I honestly struggled with this a bit at first.  I'm very analytical in my TT business approach and it appears you pay very close attention to your numbers.

You numbers aren't TOO far off from mine.  So, I feel like I can fill in some context.

My goal is to maintain a 12%-15% COM month-to-month.  Because photography is seasonal, I have to constantly alter my content.  Every time my COM bumps up over 15%, I start researching as to why I haven't been hired as much as previous months.  Here's my process.

  1. I deeply evaluate my content on my page to see if there could be adjustments made to increase my probability of getting hired.
  2. I look at the competition of the jobs I didn't get hired for to see what the other photographers have for content on their page.
  3. I reach out to previous clients to write a review (note: the more recent your newest reviews are, the higher you appear on search results for jobs).
  4. I make adjustments accordingly.

Every time I've bumped up over 15%, I do this and it's always managed to bring me back down.

I hope this helps.  This is coming from someone that HAS seen 40% COM and was furious.  I thought this was TT's fault when in reality no one wanted to hire me because there were always better options then.

Cheers,

Patrick Skinner
CLG Photography
Lar
Level 9

Re: What makes TT a 'Good investment for your business'?

Thanks for the reply Patrick, I'm glad that you get where I'm coming from.

Thumbtack assures us that the recent changes were introduced to make us more successful than before. It is evident to me (and evident to the vast majority of Pro's on this board) that despite their assurances I will likely to be less successful on Thumbtack than I was previously.

The equation is dead simple; fewer leads = fewer potential customers = less potential future revenue. 

What am I missing here? If I'm receiving fewer leads than before then how does that help me become more successful on Thumbtack?

Will Thumbtack continue to be a good investment for my business? Will Thumbtack be able to meet my expectations as to what I feel constitutes a 'good investment'? Are my expectations unreasonable? If they are unreasonable then why are they unreasonable? 

I want to understand what Thumbtack themselves thinks a 'good investment' in their platform should actually look like? 

Regards,
Lar.

Lar
Level 9

Re: What makes TT a 'Good investment for your business'?

I was hoping to get an answer and some feedback to my question @Kameron

Regards,
Laurence.

0 Kudos
Moderator Meckell
Moderator

Re: What makes TT a 'Good investment for your business'?

@Lar it's completely up to pros as to what they feel is a good investment for their business. Every situation is different and we leave that up to you. @CLGPatrick had a great response about his personal experience and I'm sure other pros would be happy to share their thoughts as well. 

Lar
Level 9

Re: What makes TT a 'Good investment for your business'?

Thanks for the reply Meckell.

I understand that what makes Thumbtack a 'good investment for your business' is very much up to each individual Pro to define, I even said as much in my initial post... 

The phrase 'good investment for your business' is obviously subjective. Each Pro will have their own definition as to what makes TT a good (or bad) investment for their business. TT has their own definition presumably.

I presumed wrong apparently. TT does not have a definition for what would constitute a 'good investment' for its Pro's. 

I'm extremely surprised that Thumbtack can't define what makes TT a 'good investment' for an average Pro. If Thumbtack can't DEFINE what a 'good investment' is then they can't have a goal or a target in mind for making Thumbtack a 'good investment'. Simply saying 'it is up to each Pro to decide' is just vague and non-commital.

I'll go with what you say though Meckell, here are my 2018 figures.

I booked 8 gigs on Thumbtack in 2018. Total gig value was $2725. I spent $271 on leads. My 'Cost of Marketing' (CoM) was therefore $271/$2725 = 10% approximately.

That's a 'very good investment' because my target CoM with Thumbtack is 15%. I may not have booked a lot of gigs but in my category in my area Thumbtack doesn't generate a lot of leads anyway. The money I spend with Thumbtack in 2018 was money well spent.

A lot of the leads (about 30%) I got via Thumbtack were completely unsuitable. Because the 'preference' settings in Thumbtack are very inadequate I often received leads with budgets that were completely unrealistic for my fee. In these cases I requested and was given a refund. This was good customer service. The refunds I got amounted to $165.

If I had not been proactive on Thumbtack and explicitly requested those refunds then I would have wasted an additional $165 on those dud leads and spent $271 + $165 = $436 on leads in which case my CoM would have been $436/$2775 = 16% approximately. If I hadn;t requested refunds for these unsuitable leads then Thumbtack would still have been a 'good investment'.

My concern for this year (and going forward) is that this type of return isn't going to be possible with the new Promote platform. For 2019 my results thus far suggest that your new Promote revenue model is making (and will make) me less successful on Thumbtack than I had been previously.

To any Pro who is reading this post.

How much did you spend on leads with Thumbtack in 2018? How much revenue did you earn from those leads? What was your 'Cost of Marketing'?

Was Thumbtack a 'good investment' for your business in 2018? Was it better than 'good' or worse? Did Thumbtack meet your expectations? What is your outlook for 2019?

Regards,
Laurence.

 

 

 

CLGPatrick
Level 7

Re: What makes TT a 'Good investment for your business'?

Hey @Lar 

So far, my COM has been lower in 2019 than it was in 2018.

BUT:

From 2018 to 2019, I evolved quite a bit and really delved into what I could do with my profile to maximize potential client interest.  Plus, I wasn't actively using TT throughout the entirety of 2018.  I have been actively using TT in 2019.  These are my percentages from January to date:

Screen Shot 2019-03-22 at 7.59.50 PM.png

My total lead count is as follows:

January: 25

February: 18

March: 18

 

So far, revenue has been close to the same all 3 months, and I'm trending a little higher for March at the moment.  That being said, I've been keeping a slightly bigger piece of the pie as each month goes.

 

That being said, I've maintained contact with previous leads from 2018 and have been filling in gaps with them to keep continuous work.  The biggest ROI I get from TT is giving a really good experience to each of my customers and maintaining an 18% returning customer rate.  The more leads I get from TT, the more returning customers I get overall.

 

I hope some of that data helps.

 

Cheers,

Patrick Skinner
CLG Photography
0 Kudos
bonnie_bill
Level 8

Re: What makes TT a 'Good investment for your business'?

@LarThat is a nice approach to calculating the TT value to your business. We use a slightly different formula. Rather than a pertentage of gross revenue. We calculate the cost by percentage of "net profit" earned after paying all costs associated with accomplishing the business. Sometimes we have to hire additional resources plus we have cost of goods in our orders. So the gross is not all profit. In fact the profit is closer to 15% of gross if all goes well. So the new higher costs of the TT platform makes it difficult for us to use the service and make a profit at all. When the costs were substantially less we could inch out a small profit or consider it an investment in acquiring volume. It is much harder to do that now. But I like your concept and that you know your ratios. Good work!

0 Kudos
Lar
Level 9

Re: What makes TT a 'Good investment for your business'?

Thanks Patrick and Bill for your comments. Every Pro will have their own way of quantifying Thumbtack's performance as it relates to their business, I aim for a CoM of 15% because fortuntately my overheads are small compared to other lines of business. 

I'm not sure how Thumbtack calculate what they charge me for each lead but I estimate that it's around 3% of the estimated lead value. This means that if I'm aiming for a CoM of 15% then I need to close roughly 1 in 5 leads that I receive from Thumbtack; that's another way of looking at it.  

Regards,
Laurence