Referral Service Funnels the Breadth of the Internet

By stressing the specificity of its leads and the ability to connect prospects and contractors in real time, ServiceMagic Inc. is becoming increasingly popular among contractors.

May 31, 2004

By stressing the specificity of its leads and the ability to connect prospects and contractors in real time, ServiceMagic Inc. (www.servicemagic.com) is becoming increasingly popular among contractors. According to co-CEO and co-founder Mike Beaudoin, the home-improvement referral service gets almost 70 percent of its clientele via word-of-mouth from other contractors.


Contractors specify the desired geographic location of jobs and choose from a list of almost 500 tasks and job types. They can opt to receive leads one of five ways: e-mail, text message, fax, voice message or by checking the Web.


David Beckman, owner of White River Construction & Remodeling in Lynwood, Wash., has been using ServiceMagic for more than two years. He gets from six to 30 leads daily. Initially skeptical given his previous experience with two other referral services, Beckman likes that the service does not require the remodeler to accept a minimum number of leads or impose a penalty for turning down leads.


"I do a lot of insurance work, which can be touch and go. I use ServiceMagic to supplement my workflow as needed," he says.


ServiceMagic operates on a no-contracts, no-fixed prices model with its contractors. Generated leads cost between $6 and $60, with remodeling leads averaging about $40 apiece.


The 6-year-old company received more than 61,500 requests for additions and remodels in 2003. Beaudoin estimates that will increase to almost 100,000 in 2004.

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