Who pays for free quotes?
There are no free lunches in this world, then who is paying for free quotes? And the answer is CUSTOMER.
We all want better service at the cheapest cost. For ages shopping around is considered the best practice to find better price and quality. In the case of services, individuals have to search the contact details of businesses, call each business to request quotes, and then compare the quote prices. It is time consuming, inefficient, and painful process. With the growth of the internet, more and more people shifted online for the same task but it is still very time-consuming and inefficient.
It was this pain that commercial quote-providing companies exploited and promised to provide the quotes from different service providers at the click of a button. The process was simple, service vendors tie-up with the companies, and when a customer requests services, vendors are asked to send the quote to the customer through the website.
The promise of these companies was simple – better prices and better quality. Obviously, when multiple businesses compete for the same customer, the customer is inevitably supposed to get better service and prices. But actually, customers get the opposite of that. They not only end up paying higher prices for service, they get inferior services also.
The price of quotes taken from the commercial quote providing services is most affected by these 2 factors discussed here:
Price of the Leads: When a customer requests service on the commercial quote providing company website, the customer details of the customer are captured. These customer detail of such customers are called leads in technical jargon. These leads are sold to the highest bidder or as many businesses as possible. The price of these lead depends on the type of service, service cost, etc. Some of these leads cost up to $100 to businesses. Business owners have to pay for the leads even if they do not get business from these leads. This pushes up the business cost and finally adds to the service price paid by customers.
Other expenses: You must have noticed tags (special, new, bestseller, high rated, etc,)in front of businesses listed on quote providing websites. These tags get extra attention from the customers and cost hefty amounts to businesses. Getting these tags adds to the cost of service which is borne by customers.
The following 2 reasons contribute the most significantly towards the cause of inferior service from the services providers sourced through commercial quote providing companies.
Competing for price instead of quality: As quote-providing companies sell the leads to the highest bidders, they do not focus on the quality of service providers. As the new inexperienced businesses or dodgy businesses struggle to get work in the open market, they get ready to pays the highest commissions to get some work. Customer get quotes from these inexperience or dubious businesses and ends up getting inferior service at higher prices.
Quality service provider not participating: Quote providing companies charges hefty commission in return for leads. Quality service providers are not happy to share a huge part of their profit margin with these companies as commission. They get most of their work from reference and do not participate in the bidding process. So customers never get quotes from these quality service providers.
Service provider’s life is also not easy with these commercial quote providing companies. Firstly, these companies keep coming up with shrewd game plans to exploit service providers. Secondly, getting business from these websites becomes a full-time task itself after some time. Some quote providing companies have their own ranking systems and service providers have to work hard to manage their ranking on these websites. Businesses are not able to focus on their core businesses.
The main reason for the above problems is the very nature of these companies. These companies are here for making a profit and will do anything for it. To maximize profit, companies have to sell the leads to the highest bidder or as many businesses as possible. Companies cannot afford to care about the quality of service providers and impact their revenue negatively. As long as companies keep charging commissions to businesses, the customers have to pay for free quotes.
So now the question is whether free quotes should be used or not? As long as we do not have the alternative of these commercial quote providing companies, we have to. Building inspection council is one such not-for-profit alternative for community service. We do not charge the building inspector any fee or commission in any form. Customers can confirm this with any building inspector listed on our website. So you are guaranteed to get the best quotes from the best quality building inspectors.
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