Websites like Rated People, Checkatrade and My Builder help put homeowners in touch with local tradespeople. But how effective are they at bringing in new business? Ben Dyer investigates
There are just under a million construction and trade businesses in the UK and this sector has been one of the worst served by technology and marketing services. But that's all changing and, with Yellow Pages lying in intensive care, finally there is some great innovation going on.
The latest referral service websites in the trade and construction space are Rated People, Checkatrade and My Builder. Their claim is that they help companies in the trade space to source new business. But do these services live up to their promise?
Can online referrals beat word of mouth?
Working with research firm Toluna, we questioned over 1,000 homeowners and asked them whether they had found and used a trade business sourced through Rated People, My Builder or Checkatrade in the past year. 12% said yes.
At the same time, 70% had used a company they already knew or that a friend had recommended. This means that word of mouth still rules.
Google beats Yellow Pages
It's not hard these days to be better than Yellow Pages. Still, 11% of homeowners from our survey found a trade business using Thomson, Yellow Pages or a local paper. But a full 18% had simply looked on Google. Google presents a potential big opportunity but it takes a lot of learning and effort for a local trade business to source jobs from it.
These new online referral services claim that they are providing a modern version of word of mouth. Given our research, this seems unlikely; and in future, online "word of mouth" may increasingly come through Facebook or Snapchat.
However, there are potential benefits for trade companies that use these websites. They don't just help you find more work; sites like My Builder and Rated People allow users to control the flow of new leads by turning the service on and off. This means that work peaks can be smoothed out.
Checkatrade doesn't provide this benefit as it continuously generates leads through regular TV advertising and the homeowners can see member details directly.
We found that 50% of homeowners think reputation is very important in choosing a supplier.
My Builder, Rated People and Checkatrade all gather feedback from homeowners and this is then available for anyone looking for a trade business. As these new services develop their own reputation for sourcing great tradesmen, these reviews will become very influential. It's something to think about when deciding whether to use them.
Getting started, however, is tricky when you have no reviews to support your profile. Without reviews it's hard to win jobs but without jobs you can't get reviews. This means that if you want to use any of the services, you may have to be very persistent and maybe even do a handful of loss leaders to get going.
How much do they cost?
All of the services are free for homeowners. Checkatrade vets all members and charges an annual fee. My Builder and Rated People get homeowners to list jobs that they want doing, then they sell these leads to their members. Each works slightly differently and Rated People is usually more expensive.
When it comes to user feedback, it's not hard to find people that are sceptical of these services. "A lot of tradesmen game Rated People by getting their friends to do feedback" according to Mark Goodchild of electric-call.net. Audrey Wright posting in UK Business says: "I haven't found a trade directory that offers fully legit ratings … they are all manipulated."
That said, our research shows that each of the services definitely works for some people and they get all positive reviews on social media.
Of course, none of this makes the choice easy. My best advice is to proceed with caution. But if you are ambitious to develop your business then it is probably worth giving at least one of the new services a good try.
Written by Benjamin Dyer, co-founder and ceo of Powered Now Invoicing App for small businesses, helping tradespeople to simplify paperwork and save time.
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Ben Dyer is CEO of Powered Now, provider of invoicing, estimating and scheduling software for small businesses. Ben was previously CEO of SellerDeck which he joined in 2008, after working for Xyratex, BSkyB and BAE Systems.