On Line Referrals: Passing Fad or Remodeling’s Future

Online referrals

Facebook, Google, and Amazon are all jumping into an already crowded field, leaving many to wonder what the future will bring.

By Elizabeth Mack
Professional Remodeler

For someone drowning in remodeling projects on a 1905 farmhouse for two long, grueling years, the allure for an immediate price quote to hire a professional on our next project was too good to pass up. After a short Facebook message to Pro.com for a bathroom tile bid, I received an immediate message asking for my ZIP code. A cheery response with smiley emoji introduced my home project manager, who offered what she referred to as a “pre-estimate” if I could give her the total square footage and if I would be installing ceramic or porcelain. Simple enough.

After a three-minute wait, I received a message with my pre-estimate labor cost. I knew my floor was uneven, and when I pulled up the linoleum, I could see the room below through cracks in the rotten boards. How could they possibly give me an accurate estimate? My project manager asked what times work best to get a pro scheduled.

Whoa! After I rattled off several questions, my home project manager explained that pre-estimates are collected from several similar jobs in my area, but the final price is determined by my pro. I wasn’t comfortable having a pro hired for me, or scheduling a job before I had met the pro or signed a bid, so I said my Facebook good byes, inserted smiley emoji, and logged out.

A Widening Field

Online home-service marketplaces are popping up faster than dandelions in spring, and with a market of around $300 billion annually, it’s no secret why. Angie’s List recognized the need and a way to fulfill it—charging the homeowner a membership fee for quality pro referrals—20 years ago. Today, competitors looking to topple Angie’s List are flooding into the home-services market with their own business models, generating revenue not by charging the consumer, but by charging the home-service pro in the form of membership fees, a fee per online referral, or a commission on the total cost of the job.

Porch.com and Pro.com came on the scene two years ago and have been upping the ante ever since. Porch, a Seattle-based startup, is now in partnership with Lowe’s, which offers terminals in stores where shoppers can find a local pro for anything from replacing a toilet to building a deck. Porch’s latest move links Better Business Bureau ratings in the results. For the tech and social-media savvy, Pro.com offers “Text-a-Pro” and Facebook Messenger, the main selling point of which is instant, flat-rate estimates and scheduling on home-improvement projects right from your cell phone or Facebook page.

Google and Amazon have jumped into the fray as well. Amazon shoppers can simply add a pro to their online shopping cart at checkout, and the pro is charged a commission for the lead. Google is testing a beta program, Home Service ads, that returns search results when consumers do a Google search for home improvement projects like “install faucet.” Several options will appear at the top of the page for local plumbers with their contact info and even a picture of a company representative. For now, Google is only testing in the San Francisco area, so time will tell if it can carve out its own share in a crowded national market.

Other players, Thumbtack, Home Advisor, Contractors.com, Yelp, the list goes on, are all vying for a limited number of professionals to sign up for their referral services. The field is crowded and competition fierce, so what does this mean for remodelers?

“Marketing and lead generation are some of the most difficult challenges for businesses, and some of these services do this very well,” says Kermit Baker, project director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. Baker believes that these programs can be a more efficient marketing process that effectively uses technology for targeted referrals.

Not for Everyone

“The primary disadvantage [of online referrals] is paying a fee for a job that we might have gotten without the assistance of one of these programs,” says Toby Asplin, president of Handyman Joe’s, in Omaha, Neb., and a pro on Angie’s List. Asplin has looked into other programs, including Amazon’s, but fails to see the value, though he believes they could benefit new businesses.

Some remodelers, especially those working on higher-end projects, look at it in terms of cost per lead. “How much investment am I making for one lead?” asks Robert Criner, owner of Criner Remodeling, in Newport News, Va. “As a higher-end design/build contractor, I’m going to put my marketing dollars toward attracting my target consumer,” Criner says. In Criner’s case, that’s Houzz, where he constantly posts his latest quality images of completed projects.

And while online referral programs may provide some business, the vast majority of remodeling leads, at least for today, still come from more organic sources. “Our reputation brings us 90 percent of our business,” says Tim Janacek of Janacek Remodeling, in Rogers, Ark., a rural market north of Fayetteville. “Our local home show brings in clients serious about remodels, and our company trucks work as mobile billboards, which brings in customers based on local name recognition,” Janacek says.

So, with all these tech plays, where does that leave the consumer? Asplin says he struggles to see the actual value for homeowners. “What do these [services] offer that isn’t already available? There are too many variables to get a real quote from any of the sites,” he points out. And if homeowners want an accurate estimate, it’s up to them to fill out the online forms correctly—something that Asplin says is often a struggle.

Most remodelers agree that a forward-thinking company with strong digital content and search engine optimization doesn’t need paid online marketplaces, though new businesses with no marketing budget very well might.

So, is an online marketplace for the home remodeling industry the wave of the future? The jury is still very much out. “I’m waiting for the dust to settle,” Criner says.

 

Visit our website to find a professional, ethical remodeling contractor in your area.

Design Trends for 2016

OPEN SPACE

An open floor plan may feel like old hat, but it’s becoming a wish beyond the young hipster demographic, so you’ll increasingly see this layout in traditional condo buildings and single-family suburban homes in 2016. The reason? After the kitchen became the home’s hub, the next step was to remove all walls for greater togetherness. openkitchen

That has led to a lot of talk about how the formal living and dining rooms have been eradicated from new homes, but that’s simply not true. The rooms still exist; they function differently. The formal living room is now more of a “parlor” or an “away room Many people choose to make it multi-functional — it could be a library and a bar area. It could open to the patio and be more of a party room. The point is, it doesn’t disappear from the floor plan. It just becomes something that you’ll actually use for more than fancy-but-uncomfortable furniture storage.

Likewise, the designated dining room still exists, but it’s more open and casual. It could be the serving space for even more casual parties. Add bookcases, and, it, too could become a library. DRlibrary

Within the kitchen, expect to see back to back or side-by-side islands, one for cooking and preparing food and the other for serving food or dining will begin showing up in all styles of homes.

KITCHEN

We’ve come to expect stainless steel and granite in high-end kitchens, but maybe it’s time to expand your horizons. “Granite used to be a premium, but now it’s everywhere,” Consider engineered stone and other countertop options.

As for stainless steel, it’s still a thing. But like granite, it’s pretty standard stuff. You might want to take a chance on some of the new designs that is being produced — basically glassed appliances in all black, white, or chocolate. Black stainless steel is making a buzz on Houzz. In a poll, nearly two-thirds of Houzzers say they would consider the dark alternative to shiny silver metal. Not into the darkness? Head to the light with a Sunset Bronze finish.

For cabinets, think about some of the lighter woods or more natural-colored walnuts, or go bold with some matte lacquers. Many say white kitchens are coming back, too.whitekitchen1

High-Tech Cabinet Options

We live in a new world where we are always connected and kitchen designers have taken that to heart. As a result, many homeowners are adding a tech perspective to their kitchen cabinets such as built-in charging stations, hands-free functionality and tablet holders. These additions, along with other innovative kitchen additions, have made living in the 21st century that much easier.

OUTDOOR

Creating spaces that provide access to nature during day-to-day life whether you live in the city, the suburbs or in the country are expected to increase. Interest in spending time outdoors keeps mushrooming, and 2016 will hold a few new options for enhancing the space, including kitchens with pizza ovens, outdoor showers adjacent to pools and hot tubs along with better-equipped roof decks for urban dwellers. People are recognizing that the backyard has long been under-utilized square footage. In the quest to make every inch of property useful and liveable, indoor spaces are opening directly to the backyard or to patios with fire pits. The sight of a flame—real or faux—has universal appeal as a signal of warmth, romance, and togetherness. outdoorfireNew versions on the market make this amenity more accessible with more compact design and fewer venting concerns. This year, be on the lookout for the latest iteration on this classic: chic, modern takes on the humble wood stove. Also expect to see improvements in perks for pets, such as private dog runs and wash station

RJAleysolar-hot-water-systemGO GREEN, GET SMART, AND STAY HEALTHY

Having Energy Star appliances does not make you an environmentalist. That being said, if you employ geothermal pumps, you can get a tax credit — not a deduction. So if you have the money, that seems like a smart thing to do.

The focus is moving toward “healthy homes” or “wellness homes.” People are choosing surfaces that are easier on the body and clean-air filtration systems.

Builders are now addressing environmental and health concerns with holistic solutions, such as heat recovery ventilation systems that filter air continuously and use little energy Other new ways to improve healthfulness include lighting systems that utilize sunshine, swimming pools that eschew chlorine and salt by featuring a second adjacent pool with plants and gravel that cleanse water, and edible gardens starring ingredients such as curly blue kale

ENTRYWAYS stairway

Although still very well designed, expect the amount of space allocated to the entrance to shrink. Large doors make for grand statements but will open immediately into the main living space of the home. In addition, if you live in a cold region such as New England, consider putting a heated floor in your entryway to help melt snow and dry boots.

For more information on our services for members and consumers, visit our website at http://www.narict.org