Service Magic Becomes Home Advisor -- What Does it Mean?

home advisorThe venerable contractor lead-gen site ServiceMagic has undergone a major rebranding under the leadership of a new CEO. Now called "Home Advisor" (a name purchased from Microsoft for such a good price ServiceMagic's new CEO Chris Terrill called it the "deal of the century"), the company is aiming to gain some new momentum and to slow the stagnation that's been creeping into the company over the past few years.

Of course, big companies morph all the time, but the move by this major player so closely related to the Home Performance space has got us wondering: why are they rebranding, what does this move tell us about the state of the home improvement industry, and what can independent home energy professionals learn here?

Why the Change?

As Local Onliner notes, the switch appears to have been driven by a number of factors:

  • Slow growth over the past few years
  • Increasing competition (from Yelp, Angie's List, etc.)
  • "ServiceMagic" being, after all, a pretty stale, generic name
  • The rebranding coincides with a revamping of the user experience -- presumably because the user experience hasn't been great.

Takeaways:

Why is this move something that we're interested in? Because we're all looking for more good leads, and if the price per lead paid to a lead gen service is reasonable, and your conversion rate to a sale is good, then it can be a viable part of your marketing mix. But, lead gen in the home performance industry can be a mixed blessing, largely because websites like ServiceMagic are one of your key competitors for online search. For example, search for "insulation contractor" and your city name in google; there's a good chance at least one ServiceMagic result will show up. For Portland, Maine, it's the top spot. If you offer insulation installation in your city, you want to win that click, not lose it to someone who will then charge you for that lead.

So what can we glean from this move on the part of ServiceMagic? A few things, at least:

The Importance of a Strong Brand

ServiceMagic was, after 12 years, willing to ditch the name and go with something new because the old name wasn't working. It's vague, it's boring, and it doesn't make a ton of sense. (What kind of service are we talking about? What kind of magic? "Home Advisor" is a lot more clear.) In a world where peoples' first impressions of your business are less and less likely to be during a handshake and more and more likely to be when they see your website's search result in Google or another search engine, a strong and clear company name is crucial. Make sure your brand tells homeowners what they need to know about your business.

Goliath Has His Weaknesses

ServiceMagic is attempting to revamp their image largely because that image isn't currently awesome. People use it, yes, but too many people aren't finding what they're looking for on the ServiceMagic website. So what is it that they're looking for? A more personal experience, greater ease in finding a contractor that offers the services that they need, and improved usability/design. There's no reason that you should wait around for Home Advisor to fill that niche: you can offer all of this stuff right on your home performance website and do away with the middle man altogether.

Hello Mobile

One of the big trends we're watching closely in search is the growth in traffic to home performance sites from mobile devices. To date, this is largely associated with emergency needs, like a broken air conditioner. The Home Advisor folks have apparently seen this too, and have created a new mobile app called Home911 for this purpose. We continue to believe that home performance is a more considered purchase, and less likely to originate on a mobile device, but we're watching the data closely. As of this writing, mobile traffic to the Energy Circle PRO network remains in the 8% range. 

The "Home Advisor" Role is in Increasing Demand

Perhaps most importantly, this rebranding shows that homeowners aren't interested in "service magic." They're interested in finding someone they can trust to take good care of their home. An "advisor," if you will. This perfectly fits the whole-house home performance offering -- as a home performance professional, you are a whole house home advisor who can offer advice about all aspects of the home, with credibility (BPI/RESNET certification) and third-party verification (testimonials and customer reviews). A big question we'll be watching is whether this results in a shift in how they approach their online advertising. To date, most of their pay per click ads were all about "low bid" and getting you the lowest price. So, when a lead comes through one of these services, the customer is already predisposed to be looking for the lowest price. In our world, that's not good. 

What do you think? Thoughts, comments, questions, concerns are all more than welcome in the comments!

Comments

Service Magin / Home Advisor is a SCAM. They ripped me off for thousands of dollars on fake leads. You have been warned.

I have heard that before, so I was skeptical about using them. My sister referred me to Servicegems.com. My hot water tank was leaking in Vancouver, and I hired a plumber from Servicegems.com. The contractor was great, and he lived up to his reviews in my opinion. I also like the layout of Servicegems.com more so than I do H/A.

It's amazing they even exist.What a racket

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