HelpHive Launches “Cost per Job” Model

Screenwerk • by Greg Sterling

Picture 12Seattle-based home services directory site HelpHive is launching a promotional program, called “referral pro.” In addition, the company announced a free video offering in partnership with TurnHere. According to the release out earlier today:

Through this partnership, HelpHive is able to offer businesses that have claimed their HelpHive business page FREE, custom-produced video profiles in order to engage potential customers and generate new business on the Internet.  In research conducted by TurnHere and its partners, online video was shown to increase call volume by 16-20%.  The video package includes a 60-second TurnHere-produced video, and access to TurnHere’s strong network of independent, professional filmmakers.

The referral pro service entitles the business to premium positioning in a number of places on the site as a “featured business.” Currently HelpHive is only in Seattle and wisely trying to “get one market right” before expanding.

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All the calls or referrals coming through the site are tracked. The novel element in the referral pro program is that it’s billed not on a PPC, PPCall or even pay-per-booking basis, but on a completed pay-per-job basis. HelpHive will take a commission on the value of the completed job. This is a fairly radical change in the model, although it’s not totally unique in the market — affiliates take a percentage of the sale price on goods often.

The businesses themselves identify whether a call or lead is “qualified.” If not, there’s no cost to them. A business receiving a “qualified referral” (as determined by them) has roughly a week to act or lose the referral to another. If the referral is marked as qualified but the business doesn’t get the job for whatever reason, there’s a small fixed fee ($5). And as mentioned, if they complete the job, HelpHive will bill the SMB a percentage (5%) of the value of the overall  price.

I spoke with HelpHive co-founder Karim Meghji at some length the other day about how they’ll monitor and protect against contractors trying to undervalue projects to minimize the commission and related issues. Meghji has thought through most of these issues. He basically said that they’ll rely on people to be honest but that they’ll have systems in place to monitor activity.

I’ve long thought that the local services market might move toward something like this for selected verticals. We’ll see if HelpHive has success and whether it can roll out more broadly with the model. I think, however, there’s no question about SMB interest and acceptance.

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