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Sears will try to leverage its identity with home improvement and repair with ServiceLive, a new leads provider for service pros that is being pitted against ServiceMagic, Angie’s List, DoneRight and others. The tagline for the service, which begins a marketing campaign next week,  is “Your price. Your time. Your way.”

Its basic concept is a mix of ServiceMagic and PriceLine. Consumers pay $10 to list jobs, and will provide project specs. They’ll have the option to upload photos of areas to be repaired (if possible). Then they’ll select from pre-screened contractors, while naming their chosen date for service, and their own price, guided by sample labor costs. If no one bids for a job, ServiceLive asks the consumers to up their price.

Under ServiceLive’s system, first respondents “win” the jobs. But then their fees are held in escrow by ServiceLive until jobs are satisfactorily completed. At that point, “ServiceLive Bucks” are deposited into contractor accounts, minus 10 percent for commissions and transaction fees. On paper, at least, the system promises to be much more efficient than other payment systems.

When jobs are completed, consumers are asked to provide comments and ratings on a five point basis. While reviews are expected to become a major part of the screening process, there aren’t many at launch, and it should take several months before any volume is built up. Until then,  consumers can rely on ServiceLive’s guarantee that its contractors have undergone complete background checks and provided insurance information.

Based on various contractor blogs, the service has been recruiting contractors in several markets since November. Nine thousand of the 23,000 that have registered have already gone through the approval process. But not surprisingly, posts on the blogs aren’t especially positive.

“Who in their right business mind would allow the customer to dictate how much a job should cost?,” said Ed The Roofer, on Contractor Talk. Patrick the Door Installer doesn’t like it either. “That just sounds like a disaster waiting to happen. ‘Sorry, they never logged in to OK the job; sorry, we can’t pay you till they do.”

Patrick added: “Sounds like it should be named: ‘Find a hungry, desperate’” Jason, from “The No Faux Zone,” sees more ominous issues, especially with the involvement of Sears. To date, he contends that contractors have been able to underbid Sears Home Improvement because it isn’t especially aggressive at the grassroots level, and it tends to build in corporate overhead.

But Jason fears that an online leads service will kill contractors’ competitive edge.  “If you’re the type (that)  wants to exceed expectations and brand your  business as something above and beyond, then this is just garbage,” he says.

We asked ServiceMagic CEO Craig Smith, a direct competitor, to weigh in as well. Smith notes that “a reverse auction is a challenging model to execute. It’s difficult for some homeowners to understand the full scope of materials and labor needed. Many homeowners and professionals will prefer to discuss the cost variables of each project in person before writing a detailed estimate.”

(Smith’s complete response is included as a “comment” to this post).

This Post Has 7 Comments

  1. Here is the Full Text of ServiceMagic CEO Craig Smith’s response to us regarding launch of ServiceLive.

    “A reverse auction is a challenging model to execute in our vertical because it’s difficult for some homeowners to understand the full scope of materials and labor needed prior to speaking with a licensed professional. ServiceMagic empowers our homeowners to receive a competitive price by:

    1.) Creating a marketplace of interested professionals who are matched to the homeowners needs based upon specific project attributes
    2.) We receive a lot of firsthand feedback from our homeowners through our rating and review process that provides very rich insight into projects cost by zip code and specific project details. Through this data capture, the ServiceMagic model empowers our homeowners to be informed when negotiating pricing with service professionals.
    3.) We’ve enabled homeowners to ask-a-reviewer direct questions, via our secure platform, about their experience with approved members of our network. Enabling this direct dialogue helps our homeowners become more informed about project costs and general expectations around their home needs.

    Overall, the scope of ServiceMagic’s platform isn’t limited by the size of the project. Regardless of whether it’s a small repair or a major remodel, many homeowners and professionals will prefer to discuss the cost variables of each project in person before writing a detailed estimate. Smaller projects have more predictable project costs but in almost every case the homeowner and our 10-point screened professional will need to meet to discuss project scope and set comprehensive expectations upfront to help avoid unexpected charges and, perhaps, frustration with the process.”

  2. Here’s a comment from “TX Pro” — thanks!

    I’m registered with both and I prefer the solution because with SM I buy leads that 20 other people buy with no guarantee of winning the job. In SL, when presented with a job I can accept and know I’ve won the business or respond with a conditional offer if I don’t think there’s enough money in the deal. SL doesn’t cost me anything unless I win a job. It’s worth 10% to me because it’s work I wasn’t planning on having to begin with and I didn’t spend anything to get it. The more business I get from ServiceLive the more I decrease my lead funds on Servicemagic

  3. Here’s a comment from FixR CEO Andres Torrubia.

    I really wonder the amount of leads they will generate once they start charging the $10 listing fee (March 1st, 2009).

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