It seems like every few months a new study comes out showing that more and more homeowners rely on online reviews over personal referrals when selecting a contractor. Not surprisingly, the percentages are affected by the age of the respondent— the younger the person surveyed, the more likely they are to name reviews as their most trusted source. One study even reported that 34% of 18–24-year olds will believe a review they read on Google over a friend or family member standing in their living room.
I’ve repeated that stat many times, and heard others cite it as well. The theory is that we’re transitioning to a world where online resources will slowly surpass personal networks.
On page 11 of this issue we report the results of another such survey, and seeing the findings made me start thinking about all of those studies more deeply. I believe the data is accurate—we have become a culture that uses technology to make home improvement decisions. Yet that research doesn’t give the whole picture.
The surveys I’ve seen had questions like, “Which source of information about contractors do you trust the most?” But in reality, consumers’ trust is based on a number of factors often blended in ways that homeowners don’t even consciously realize.
Say my neighbor is remodeling her house. The crews look professional and hard working, and I notice the jobsite is clean. I ask my neighbor if she’s happy with the company, and she says they’re great. I check reviews, all positive, and end up hiring them for my own project. Is my “trust” a result of personal impressions, her recommendation, or the reviews? In reality, it’s a blend.
Studies are valuable, yes, but the best information will come from clients themselves.
To that end, a referral, no matter how positive, won’t generally overcome a slew of bad reviews. And five stars on Yelp will quickly lose meaning if somone you trust says, “Don’t go near that company.”
It’s also worth noting that when it comes to this type of survey data, the stakes are high. Many online referral platforms view word-of-mouth as an actual competitor. HomeAdvisor, for example, launched a $100 million ad campaign designed to expose the “shortfalls” of word-of-mouth referrals, and “demonstrate a better way.”
Studies are valuable, yes, but the best information will come from clients themselves. If you aren’t already, try asking the following questions after every job:
1. Where did you first learn about us?
2. How did you research our company?
3. How much did what you learned influence your decision?
4. Why did you decide to hire us?
The answers to those questions will help reveal the most productive areas for marketing, both paid and free. It will also provide valuable insights to help increase your close rate.
Studies are crucial to the industry, but the best data comes from evidence-based research taken from your own business. The first is like a expertly drawn sketch. The second is the 3-D rendering.