I recall a presentation by Ted Paff, Founder of Customer Lobby, where he asked an audience of HVAC business owners, “How many of you love Uber?” Pretty much every hand went up.
Then he asked “How many of you would rather use a yellow cab?” Pretty much every hand went down.
“Congratulations!” he yelled, “because all of your businesses are yellow cabs!” Silence.
I have been thinking about that presentation a lot lately because Google’s move into Local Home Service ads feels to me like the beginning of the Uber-fication of Local.
Google has gotten pretty good at squeezing most of the profit out of every industry it touches via Adwords, Google Shopping, etc. And Google’s Local Service Ads look pretty much like more of the same.
But the difference is the local pro angle.
Imagine “Dan” works for a pest control contractor. He spends his days hoovering up rat turds, sealing holes and poisoning vermin. If he’s lucky he makes a decent hourly wage. I have no idea what these jobs pay, but let’s say he’s making $25/hour. But his boss, “Doug”, is selling him out for $50/hour. Doug is the guy who booked the business. He’s the guy who has for years invested in his brand, spent tens of thousands on advertising and direct marketing and gotten great word of mouth referrals. Except I don’t really care. I just need someone to clean up rat turds and get rid of the damn things. I’m picky, but it’s not like I have a lot of experience hiring people who are good at this. And I’m too busy checking Twitter for incoming missile alerts to spend much time worrying about finding the absolute best turd expert in my area.
So imagine I search Google for “pest control near me” and instead of clicking on an ad or a local listing, I get a form with a message from Google saying that if I give them a little bit of info about the job, they’ll find me a local pro to do the work at a set price — and they’ll back it up with a Google guarantee.
Now Google has been selling ads to pest control contractors for years. They likely have a good idea about what the going rate is for a customer for most types of queries. And they likely know how much a local contractor is going to charge me to get rid of my turds. And they know while I care about quality, I probably care more about price, particularly if a brand like Google is supposedly going to back up the quality.
Google knows Doug the boss is going to quote me $50/hour for the job, so it is happy to do no evil and tell me that it can connect me with a local contractor for $40/hour.
Google texts Dan, who clicked on a Google ad himself a few days ago about becoming a Google-certified contractor and making some extra bucks in his spare time. Google offers Dan $30/hour to take care of my rat turds. Dan quickly does the math and books the job for his next day off. He is excited about the extra change he is going to have soon.
And he starts thinking that maybe it might be more profitable for him to start taking more days off…
What is that old saying? If you don’t know which business is the turd in the market, it’s probably yours.