When people want to do something for you, generally it’s a wonderful thing, right? So when an online retailer wants to sell your services for you, would you be crazy not to jump at the opportunity? After all, they offer some crazy awesome prices and deals to their customers.
However, let’s take a step back, look at how their business model works, read the fine print, and see 3 ways that using that online retail service is no deal for your business.
How do these online retailers make money? By offering the public a deal – and you expensive leads.
Online retailers are trying to be the go-between for companies like yours and the public. In other words, they’re trying to get in on the transaction.
When you think about it, this is actually a pretty savvy business model. Here’s how it works:
- Find a prospective customer of some professional service
- Attract those customers to give their information by offering an incentive of some sort (deal of the day, multiple quotes, vetting services on your behalf, etc)
- Take that information and sell it (in whole or in part) to several competing companies.
- Collect money from the companies and let them try to win the customer’s business
- Never leave the office or worry about delivering on any promises to the customer – other than what happened in an automated way from the online retailer’s website
It’s a great gig for the online retailer! They get to do what they’re good at (selling products) without actually having to become a service company.
Do you see the problem, though? Selling a product isn’t the same as selling a service. And when someone sells a service as a product, at some point, it’s just asking for trouble.
Here’s 3 ways that trouble could hit your business.
1. Your valuable service becomes a cheap commodity.
Because the retailers are in the business of pushing products, they have zero incentive to educate the customers about key differences between you and your competitors. In fact, if they did, it could cause friction between their clients – you and your competitors.
Plus, doing so would make it harder for them to sell a simple product to the general public.
It’s much easier for them to sell “Carpet cleaning services,” than it is for them to add in extra value and services like pet odor neutralization, sanitization, unique company selling propositions, and any other differentiators.
Their business model requires turning your service into a commodity. And that means that the price is the natural differentiator.
But what do they care? They need to sell you as many leads as possible to make money. They got you a lead – now you get to navigate the hurdles they so thoughtfully put between you and a product-minded (rather than value and service-minded) customer.
Is that kind of extra work worth the steep price tag for a lead that might not even choose your company?
2. Your company cannot control the buying experience.
Because marketing starts with the first interaction, you’re already playing a losing hand. Why? Because the online retailer got to have that first interaction.
You’re second or third or even sixth down the line. Instead of presenting a professional first impression, odds are you’re going to be cleaning up after someone else’s mess before you can even make an appropriate service bid.
Finally, you aren’t in control of that customer’s data. The online retailer has it. You won’t be able to follow up, schedule future service calls, or ask for referrals.
Is the expensive half-lead worth that kind of headache?
3. Customer loyalty is gone.
Have you ever run a deal through a company like Groupon? How was your customer retention?
Unless you ran a secondary deal, you probably didn’t see those customers again, did you? Or if you did, there weren’t very many of them.
Why is that? It’s because the customer gave their loyalty to the online service retailer’s pricing. Not you.
And because they’re now loyal to the price, they’re loyal to that process that the retailer provided during that shopping experience.
In other words, to keep getting customers through that bargain website or retailer, you have to keep offering those prices that will attract attention and loyalty. And, a good sized cut of each sale goes to the retailer, because that’s how they stay in business.
Is competing with pricing for temporary loyalty something that you want to do?
You don’t have to play their games.
Look… if you answered no to any of the questions above, then it’s time to stop playing their games, because an online retailer just isn’t for you.
It’s time to start educating the public about the valuable services you offer; time to add more value to their lives instead of trying to cut corners to save them money they’d happily spend; and it’s time to take control of those interactions so that your business can grow.