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Service referral sites like ServiceMagic and Angie’s List have gotten some traction. But by no means are they dominating the business. What will it take?

Ashish Mohole, cofounder of start-up, thinks the key is to guarantee that users get a wide assortment of choices when they make a query. Too many queries come up empty or return just one or two possibilities, he says.

GetVendors’ solution is to provide seven listings for every user query. Of these, four are free listings that are organically matched based on the service qualifications — and come right out of licensed YP listings. The other three are paid listings provided on a pay-per-lead basis. Services are automatically called when they are matched with a user query.

“Users don’t get substandard matches just because we don’t have enough advertisers,” says Mohole. “This approach also enables us to draw organic traffic at a much higher scale.” And in theory, these users are likely to upgrade to paid listings “since there is a lot of competition for organic matches.”

Six months into it, GetVendors reports that it has provided more than two free leads to 5,000 California services. Traffic-wise, it gets 40,000 unique visitors a month, based entirely on SEO and repeat traffic.

It has also gotten 245 advertisers to upgrade. “We expect to close a deal with a few larger chains soon,” says Mohole. “All this without a sales force. Our lead notifications do the job of telemarketing for us without our having to invest heavily in a sales force. The more users we get, the more marketing will happen.

Mohole adds that an advantage of his service is it “gives real business to genuinely matched services.” Since they receive free, automated calls, the services aren’t forced to visit the company’s Web site to pick them up, a la companies like MerchantCircle, which calls businesses to say they have a review, whether they have one or not, to force businesses to sign up to see it. MerchantCircle now reports 200,000 registered businesses. “Our approach is simple, honest and yet effective and scalable,” says Mohole.

But Mohole also notes that the company’s prospects remain uncertain. “Small business will pay for leads when they can talk to real users.” But getting small-business advertisers is a long drawn process. “Our account upgrades happen one-by-one. It is hard to get these businesses excited even if they close business through us. It is unrealistic to think they [will be] referring other friends, etc.”

Mohole openly wonders whether the time has passed whether start-ups like his can make a go of it. “All the big guns are pursuing everything possible to get in the local market,” he says. “The local space it is not easy for a start-up to get traction in a short period of time without exposing to the risk of big players catching up.”

In fact, he and his two cofounders are contemplating selling the company. “A few years back, the experimentation would have been good idea with start-ups making progress under the radar. But now it is more than likely these ideas will get ‘picked up’ and won’t have a chance to build premium value.”

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