The whole on-line lead generation thing is a convoluted, sucky mess.
Some questions on the way to sorting it out:
- Does it work?
- Is it worth the money?
- Am I giving up ground to my competitors, if I don’t use paid directory listings?
- If I am giving up ground, how much?
The whole on-line lead generation thing is a convoluted, sucky mess. Some questions on the way to sorting it out:
- Does it work?
- Is it worth the money?
- Am I giving up ground to my competitors, if I don’t use paid directory listings?
- If I am giving up ground, how much?
As you move through the process of evaluating directory services you also need to figure out how online directories, fit in with expensive, exploitative online referral agencies such as “A Place for Mom”. Then once you decide to use a directory service you will then need to figure out which directory or directories to use and what package will give you optimal results.
Sorting it Out – Two Models
A week or so ago I spent an hour on the phone with Blair Carey, the managing director of RetirementHomes.com, the leading online senior housing directory, in an effort to make some sense of the online lead generation ecosystem. There are two principal models available to senior housing communities: Move-in Fee Referral Agencies Blair explained these services have two big advantages:
First: you don’t pay anything unless they actually generate a move-in for your community.
Second: they have massive organizations dedicated to search engine optimization which means that in any Google search, they will always show up on the first page and multiple times as you go deeper in the search results. As a note: Any directory service including RetirementHomes.com will have dedicated developers who specialize in SEO. The referral agencies also have some huge negatives. You will pay a lot of money for each move-in, sometimes as much as 100% of the first month’s fee. Also, because of their massive web presence, in order to compete on a level playing field with other senior communities in your market area many communities feel essentially forced to use these agencies or you will lose residents to those who do, creating a blackmail style model.
Directory Services
When looking at directory services, each company approaches the problem a little differently. Then in addition each company offers a broad number of options their client communities. That being said, there are three primary business models:
Pay Per Click – Under this model, each time someone clicks on a link to a specific senior communities web page, that community is charged a certain amount of money. This is very similar to the Google AdWords program. The cost can range from as little as $.10 per click to over a $1.00 per click. The good news is that you have concrete evidence that people are paying attention to your listing. The bad news is that you have no way to control or evaluate the quality of those clicks. They could be your competitors, researchers, people who are looking for another type of senior service or even accidental clicks. There have been stories of competitors clicking through as a way to waste the money of their competitors.
Pay Per Lead – With a “pay per lead” program, some technology screening (as opposed to human screening) takes place. In a practical sense, it means that a “prospect” has taken the time to fill out an inquiry form, indicating what type of care and/or housing they are looking for and what geographical area and maybe has given some indication as to their ability to pay. The directory company takes those leads, packages them in an email or fax and they are sent to every contracted senior housing community in the identified catchment area. It is then up to the senior community to do additional filtering and chase those leads. These leads are more expensive $10-$50 per lead, and are at least theoretically prequalified. It still requires substantial effort to work the leads and many will turn out to not be viable.
Pay For Listing – Under this scenario a basic listing may be free (this means typically only the name and address of the community). Building on the base listing, companies offer various upgrade packages that will improve the community’s visibility and hence leads generated. The second part of these series with Blair Carey of RetirementHousing.com will continue on Thursday with a detailed look at how to get serious value from your directory listing dollars. Are you using directory services? What is your experience? Do you have lessons learned you can share?
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Good article Steve. There’s certainly no shortage of options when looking into referral based online directories. Whether a community is heavily into their own online lead gen efforts or not, they should test them out! However, it’s very important to measure their effectiveness. Unfortunately, many directories (and internet marketing companies) have people focused on cost per lead, and other metrics that can be a distraction. Leads don’t pay bills, residents do.
It’s much more valuable for a community to know the cost to acquire a new resident, and the lifetime value of your residents. If you measure how much it’s costing you to acquire a resident, then it doesn’t matter which model you use above because you really know what it’s worth to your community. And if you know how much a resident is worth over their lifetime with your community, then paying a full first month’s fee may actually be worth it. Knowing these two metrics is important and is why we’ve developed a proprietary return on investment (ROI) console for our customers to track these two important metrics and more for any marketing medium they choose.
The thing that continues to bother me is that these sites do not list all the available senior communities in their area. Only the ones who pay. The “big players” in town can afford it. Others can’t.
Kim,
I completely share your frustration, but to the defense of my colleagues, their focus is on lead generation, which is what most community providers seek.
Our site, Retirementhomes.com, allows communities to list on our site for free, they only have to pay for premium placement if they so choose. Moreover, our site if focussed on making the web users’ experience as positive as possible, which can be, in some cases disadvantageous for lead generation.
So members of Retirementhomes.com receive both lead generation as well as a premium online presence for branding purposes.
If you have more questions, please feel welcome to contact our team at [email protected].
Kevin,
You are indeed correct, understanding your true Cost of Acquisition (COA) is imperative in today’s marketing environment. One of the issues I have with providers and agencies is that they don’t incorporate all costs into the COA.
So in addition to the actual cost of your online marketing (which is the most measurable form of marketing), the costs associated with offline marketing (which can be measured), the costs of your sales team (salaries, benefits, etc.) and your implementation teams should also be incorporated into the COA.
Great article. Thanks for sharing.