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The Real Costs of Cheap Leads: Time, Money, and Business Growth

Learn why cheap leads can cost your business more in time, money, and growth compared to investing in higher-quality exclusive leads.

When you first do the math, cheap leads seem like a great deal. More names = more calls = more projects... right?

But if you’ve ever tried to sell your services to these leads, you’ll know they usually aren’t worth the trouble. You spend tons of time chasing ‘low-quality’ prospects, wasting your effort and money and dealing with a lot of frustration.

Bottom line: Cheap leads are not anywhere as cheap as they first seem.

1. You’re Not Buying Leads. You’re Paying to Enter a Competition.

When leads are sold to multiple contractors, it’s a race to see who can reach the homeowner first. You might be spending $20 per lead, but you’re really paying to compete as one of many contractors trying to get a single homeowner’s attention. 

The result: Wasted time, constant rejection and lower close rates. 

Even if you’re fast and professional, being one of six calls in a single afternoon makes it hard to stand out. The experience becomes frustrating for both you and the homeowner.

Instead of focusing on selling your services, you're forced to focus on speed. And that pressure can negatively impact the quality of your first impression + it often forces you to compete on price which is a terrible place to be.

2. Time Is Money. And You’re Wasting It.

Following up on low-quality leads takes time away from what really matters, meeting with serious clients, managing jobs and running your business. Every bad lead you speak with isn’t just a missed opportunity. It’s wasted time you can’t get back.

Ask yourself: If it takes 10 or more calls to book one job, is it really saving you money?

A survey by HubSpot found that salespeople spend more than 21% of their day writing emails and 17% prospecting and researching leads. Much of this time will be wasted by chasing bad leads when your team could be focused on closing new projects.

And it’s not just about the volume of leads. It’s about the quality of your workday. Would you rather spend your morning dialing 20 unresponsive homeowners or walking through a potential project with a prospect who is ready to buy? 

3. Cheap Leads Don’t Scale With You

Cheap leads may be manageable when you’re just starting out, but they don’t scale well as your business grows. As your team grows and your calendar fills, you need leads you can count on, not a constant stream of ‘maybes’ or ‘nos’.

Inconsistent quality, unreliable contact info and overlapping calls waste your team’s time and lower your return on investment. 

Investing in higher-quality, exclusive leads makes things a lot easier because you can streamline your process, forecast business more accurately and build a more stable foundation.

What is the difference between exclusive and shared leads

4. Poor Close Rates Raise Your True Cost Per Project

A $25 lead might sound like a great deal, but that changes when you need ten of them to close one job. The costs add up quickly.

$25 × 10 = $250 per new job

Now consider buying exclusive, higher-quality leads at a higher price, such as $60 each. If you only need 3 to close a new project, your total cost per job is just $180.

$60 × 3 = $180 per new job

In this case, choosing cheap shared leads ends up costing you more money and more time to achieve the same result: a booked project.

Unpredictable close rates also make it harder to forecast your earnings and plan your team’s work ahead of time. 

Higher close rates mean fewer follow-ups, less frustration and better use of your time. And when each lead is more likely to convert, you can spend more time on your core business… preparing estimates, delivering great service and growing your company.

5. Your Reputation Can Take a Hit

When homeowners are contacted by multiple contractors, they feel overwhelmed and often become annoyed. Contractor calls become almost ‘spam-like’.

Trust is harder to build when you’re one of many. You may be professional and polite, but if a homeowner has already received five similar calls, you’re likely to be met with resistance or ignored entirely.

"We used to get complaints from homeowners saying, 'I’ve been called five times already.' Since switching to exclusive leads, that problem disappeared. It makes us look more professional." Briana C., Bathroom Remodeler 

Think about how hard you work to deliver a good customer experience. Don’t let the first impression a homeowner has of you be annoying!

Want to learn how Briana grew her business with exclusive HomeBuddy leads? Read the full case study on our blog.

6. Burnout Is Real.

Chasing homeowners who didn’t ask to be contacted. Getting ghosted after quoting. Fighting five other contractors for the same job. It can wear you down and drain your energy and morale. It’s brutal!

Martin Walsh

Dead-end leads don’t just stay in your CRM tool, because they are so unpleasant and stressful, they follow you into your evenings, your weekends and even infect your mindset. Over time you can get burnt out, with high turnover on your team and missed opportunities to grow your business.

To help you with some best practices that reduce the stress of prospecting, our Call Center team built a simple One-Pager with follow-up tips, scripts and automation ideas to make the process smoother. 

Download it here to save time, improve your results and protect your mental energy.

Want To Try Quality Over Quantity?

At HomeBuddy, our exclusive leads go to one contractor only. There is no competition with other contractors... no reselling… no confusion, only homeowners ready to speak about their project.

We’re here to help with leads that match your goals of business growth and a more efficient sales process. If you’re ready to try exclusive leads, we’d love to talk! Get In Touch Today!

Rachel from HomeBuddy.

Rachel Jacobs is the Senior Director of Marketing at HomeBuddy. She is passionate about creating data-driven strategies that connect contractors with high-quality leads. Rachel is dedicated to helping contractors grow their businesses and achieve success through innovative marketing and lead generation solutions.

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