Smelling blood at the presumed decline of Yellow Pages, a number of sites have launched that provide leads to local service SMBs. You’ve got Angie’s List on the membership side. And ServiceMagic, Tree.com’s DoneRight, Sears’ ServiceLive and a number of regional companies (i.e., Redbeacon, Fixr, LocalPrice) using some type of leads model.
Now add HelpHive. Launched this summer in Seattle by four Seattle tech vets, HelpHive builds on licensed listings from iBegin to provide a “hand curated” directory of SMBs in 50 categories. Its business model is to charge SMBs an annual fee of $199 for a variety of “Pro” level services (introductory priced at $99) and 5 percent of the total job value. When leads don’t result in jobs, the service takes a $5 fee from the SMB.
It is interesting to note that the commission is half ServiceLive’s 10 percent fee. Also in contrast to ServiceLive, all payments are done on an honor system. ServiceLive has a complex system — perhaps necessary — of collecting payments and distributing funds only after consumers are satisfied.
HelpHive’s Pro service has a number of distinctive features, most notably one year of a basic, free TurnHere video, including a site visit by a videographer, and a 60-second clip. As with many other video offers, however, the video is not portable to other sites.
Citysearch had also provided introductory free video at one point. But those contracts were many times more expensive than what HelpHive is charging.
Cofounder Karim Meghji says the team considered the full range of business models currently offered in the space. At Real Networks, where two staff members had worked, “we ran a subscription business. You’ve got problems with churn, lifetime value of customers, and customer acquisition costs. It will be a challenge for Angie’s List to sustain that.” Subscriptions also run counter to the company’s hopes of providing information “to the broadest base,” he says.
As for a leads-based model akin to ServiceMagic, where SMBs are charged for leads whether they win the job or not, that doesn’t work either. “Consumers are seeking a service model, not an RFP-like model,” says Meghji.
The company launches its promotion this week with a $10 gift card to consumers who register to provide reviews. It is also appearing at a Seattle home show.