What are you doing here? Why are 'Tech' companies listed under 'Plumbing'?
One recent morning I was surprised by a package on my driveway. It was wrapped in plastic and inside was a telephone directory. More important than what was inside the plastic wrapper is what was inside the book. It was the “yellow pages.” [NOTE: “Yellow Pages” is a trademarked and copyrighted thing. In this article the author is using a colloquialism for the business listings of the telephone directory he found in his driveway, which are commonly printed on yellow paper. – Ed.]
Out of habit and curiosity, I turned to the plumbing category; over the years I have done that drill dozens of times. There was a time when my company, Plumbing Doctor, was in every phone book in my market sphere of influence. And we were there with a big presence. Usually it was a full page, or double truck (that is a two page ad) ad, in full color. But not anymore, and for good reason; it does not produce for us nearly as well is it once did. It is no longer a good return on our investment. I have learned to invest in online strategies.
As is, or rather was my custom, I looked at the ads in the “yellow pages”-type directory to see who was still using that media, and I got another surprise. I was surprised to see a technology company advertising under the plumbing category. That piqued my curiosity, so I went to the online “yellow pages” and found many technology companies advertising in the plumbing category.
Let me point out the technology companies in question don’t provide plumbing services. So, then, what’s the deal? Why would a technology company advertise in the plumbing category? What is it they want? I’ll tell you exactly what they want. They want what you should want and be fighting for: Your customers.
First, I want to expand on what these technology companies do, since we know they don’t do plumbing. They are lead generation machines. Specifically, they are known as “Online Lead Generation” companies. Online lead generation is an Internet marketing term that refers to generating prospective consumer interest or inquiry into a business’ products or services. Leads, also known as contacts, can be generated for a variety of purposes: list building, e-newsletter list acquisition, building out reward programs, loyalty programs or for other member acquisition programs.
They use technology and the internet to acquire consumer data. They aren’t after jobs, they’re after consumer data. They are building a list. They seek a consumer with a plumbing problem. They capture the consumer data (i.e. name, address, phone number, credit card info and so on.) Then, they sell a small piece of that data to you and other plumbers in your area. You had better be quick and cheap because there will likely be competition scrambling to land that dripping faucet job.
Often the price of the job is determined by the online lead generation provider. Usually, the payment for services rendered is made directly to the online lead generation company and you will get your fair, or maybe your not-so-fair, share.
The customer is not your customer, it is the online lead generation companies’ customer. You are likely restricted contractually from upselling or from proposing add-on sales. And you are certainly not free to solicit that customer for future work.
What is happening here is that you have become dependent upon the lead generation company to provide work for you. You are an employee! Maybe not legally, yet, bet perhaps in spirit.
Consider it the Uberization of the plumbing service industry.
Uber has changed the personal on-demand transportation industry, formally only known as a taxi. The courts are deciding and lawyers are arguing about whether an Uber driver is an Uber employee or an independent contractor (i.e. small business owner.). Consider that the driver of the Uber machine uses his or her own personal vehicle, does no marketing or advertising and only services the patrons of Uber, for the price that Uber dictates. Do they have a business? What can they sell as part of their exit strategy, a used car?
How long, I wonder, before it’s legally determined that the plumber who is getting clients from the online lead generation companies is really an employee of said company? After all, you are using your own personal vehicle, but, servicing their patrons for the price they decide and do little to no advertising? What can you sell as part of your exit strategy, a used truck?
Traditional taxi companies are feeling a pinch I’m sure, as are most taxi drivers. Complain as they may, if there wasn’t a need Uber wouldn’t have disrupted the industry. If the taxi industry had recognized perhaps there was a more excellent way, they could have set the trend instead of bucking the trend.
We can learn a lesson from the taxi cab.
What the online lead generation companies want are your customers. The real value of any enterprise is the customer list, its loyal patrons that can be harvested over and over again for decades. It is the customer list that matters and it is what we should be fighting to keep.
I expect we will see the cannibalization of the online lead generation companies. There are too many entering the space of the home services sector and only the strong will survive. I’ve been watching this trend for a while and know of some players who are already gone. They have vanished along with their investors’ cash.
So I ask you. Where is your company’s value? Is it in used trucks and worn tools? Absolutely not, it is the brand consumers identify with. It is the list of those consumers that adds value to your enterprise. In my experience the best way to guard against being Uberized is by becoming a known, local brand in the market you service. Tech companies see the value of the consumer, it is practically limitless, why let your value be hindered by a computer?
The Doctor is Out…