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Amazon recently announced that they were getting into the home services link-up game, and I must confess that initially I was skeptical. Just because they’re the biggest conduit for physical products in the history of the world doesn’t necessarily mean that they know jack about efficiently bringing together homeowners and service providers. Or so I thought.
Upon further inspection of the service and how it is being incorporated into their site, I have a completely different opinion. I now believe that this will be a total game-changer for many companies, especially handyman and installation services. Though the service is brand-spanking new and only available in some areas, with time Amazon users will become more and more accustomed to using it, and eventually it will become a massive stream of income for organized and quality-driven pros all over the country.
Ride The Wave Or Get Left Behind
Amazon is the internet monster that just won’t quit. In 2014 there were over 270 million active accounts around the world, and this number seems destined to climb over half a billion within the next five years. The company is a complete beast, just in case you’ve been living under a rock for the last decade. In short, a platform like that gets you access to a ridiculous number of people.
And these are the kinds of people that you should want access to, just so we’re clear. A great majority of Amazon shoppers are people who place a great value on their time and quality products. They are less concerned about finding the absolute best deal. This is the kind of customer that every home service provider should be salivating over. These aren’t the types who are going to haggle with you on price. They just want it done quickly and done right. If they have to pay a premium for these conveniences then they are usually fine doing so. Can you say “ca-ching?”
The way that Amazon is integrating this service into their product listings is actually very smart. Consider this random listing I found for a ceiling fan:
See the text in that red circle? This is where Amazon is giving you, the local handyman, instant access to their prized customers. This is very valuable real estate, and it’s my belief that the first ones to rush in and grab it will be rewarded handsomely as time goes on. Reviews will accumulate quickly from your customers, and you could quickly build a lead that will be difficult for others to overcome in the future. Get in now and treat these customers like gold. Reviews are everything on Amazon. By the time your local competitors have awoken from their slumber and realized the potential, you’ll already be miles ahead.
The real value for you is in the long-run. Consider that many of these customers will likely hire you again and again in the future for everything from installing shelving to fixing a leaky faucet.
Apply here for Amazon Home Services. DO IT NOW and thank me later.
My name is Jeff and I created this blog in 2007 to help and inspire contractors and home service providers. It’s come a long way since then.
This is not a great service for any contractor the fees are high per lead. not worth it for any service contractor you have to pay amazon 20% for each lead
let’s we do a job that cost $5000 that mean we have to pay amazon $1000 for that new lead.
I disagree. These aren’t exactly “leads” in the typical sense where you pay a company to hunt down work for you which may or may not result in a paying job. With Amazon you only pay up if it actually results in a job. So all you have to do is build in some or all of the fees into your price. The fees range from 10-20 percent. So for your example of a $5000 job, let’s assume the fees are at the high end (20%). So you would list the job at say $6000 on Amazon. $1200 of that goes to Amazon, and $4800 goes to you. You eat $200 for the right to get a customer that will make you a guaranteed $4800…this is a bargain. As stated in my post above, most Amazon shoppers are willing to pay a premium for things and services that come with high quality and are highly convenient.
Contractors are in the same position as every other business; they need to continually grow their customer base.
Marketing and Innovation, to borrow from Peter Drucker, are the two main drivers of growth in any company.
Perhaps if we look beyond the initial “Cost to Acquire a Customer through Amazon” and think about the lifetime value of your customer we may find Amazon Home Services makes a lot of sense if it helps contractors acquire more high-profit, low maintenance clients.
“The 80/20 Rule for construction success” speaks to this and is essence it states that 80% of your construction company’s profits come from 20% of your customers and clients.
The long-term growth and profit of a contractors company comes from solid, repeat customers and when it comes time to sell your company one of the Key Performance Indicators business brokers and investors will use to establish a sale price.
Warm Regards,
Randal
Thanks for chiming in, Randal. Couldn’t have said it better myself! Considering the lifetime value of a good customer is something that most contractors don’t put enough emphasis on.