Home Warranty Leads: Questions and Answers for Marketers


Home warranty, one of my recent topics, generated quite a few questions from readers.  I would like to address some of them here for the benefit of others who might be curious.

If you missed the first article on home warranty leads you can click here to see an example of the type of lead generation campaign I referred to.  You can also read the original piece here.

Here are some common questions that might help you better understand home warranty as a marketing and sales opportunity.

 What is the difference between home warranty and home owner’s insurance?

While many home owners are required to have home owner’s insurance nobody is ever required to have a home warranty.  For this reason there is less awareness of the product and what protection it may provide to a home owner financially.

Typically home warranty is a term that generally refers to any extended warranty or service contract that covers major appliances and/or large systems in the home such as air conditioning.  The limits on what is covered vary from one home warranty company to another and often include dollar amount limits on how much coverage exists per covered item, per year, or per contract lifetime.

Unlike home owner’s insurance a home warranty covers normal wear and tear in most cases and in some cases may even cover manufacturer’s defects or owner’s lack of proper maintenance.

As an Internet performance marketer what do I need to consider?

I’ve been marketing home warranty almost exclusively for two years now and can say that the best way to decide whether to market home warranty or not is to consider these few points:

–  Do you already come in contact with home owners in your existing campaigns?

– Is targeting geographically something you and/or your affiliates are comfortable with doing?

– Does your typical campaign model consist of selling leads exclusively?  If not are you flexible enough to make a new campaign successful if selling the lead multiple times is not an option?

If you answered yes to at least two of these questions then it’s likely that home warranty, no matter how niche it may be, could be a good fit for your company’s marketing campaigns.  Targeting is very important in some cases though so it’s important to consider the limitations of your lead buyers before you choose to move forward.  Many home warranty companies you may work with will only be offering warranty coverage to home owners in a handful of states and some will even have numerous zip codes they exclude from their coverage.  This is typically due to lack of licensed and approved contractors to meet the need for service calls but may also be due to licensing requirements in certain states.

What is the competitive space like right now both from a lead buyer’s standpoint and from a lead producer’s point of view?

For marketers using affiliate traffic the competitive landscape currently is somewhat challenging.  If you are competing with other companies for email or search traffic from affiliates you should pay careful attention to what you can afford to spend per lead.  Conversations with affiliates and simple searches on sites such as OFFERVAULT.com should prove helpful.  You may find that what your lead buyers are willing to pay is not sufficient to support a competitive affiliate payout.  There are many other good strategies for producing leads though and depending on the volume demands of your lead buyers you may not need to strain your margins on lead sales in order to compete with larger advertisers who can afford to pay more for affiliate traffic.

From a lead buyer’s standpoint there are more sources of home warranty leads today than two years ago so it’s certainly a buyer’s market relatively speaking.  With so many lead producers using PPC search traffic you may find that duplicate rates on leads are too high to make the leads worth what you must pay for them.  For this reason it’s critical as a lead buyer that you question the production methods of your lead producers.  Search traffic is not a bad thing but if you have a small budget per customer acquisition then duplicate leads are a risk you must manage pretty conservatively.  As an alternative to paid search I personally rely mostly on organic search publishers but even this produces a fair number of duplicate leads.  Ultimately you are going to compete heavily with other home warranty companies and sales companies if you go anywhere near search traffic so be prepared to make your call center or your client’s call center as efficient as possible regarding the speed of follow up calls.

Is home warranty a one-call sale?

A one-call sale for home warranty can be tricky because so many consumers have existed without any home warranty coverage for so long.

If your price is low enough and your brand well-known then there’s a good chance based on my indirect experience with call centers.  Be prepared for a need for follow up though and also be prepared to pass the gate keeper.  By this I am referring to a tendency I saw in call center recordings where the initial call is just a fact-finding mission and the decision is made afterward.

As a marketer why would you help to educate other marketers on this topic?  Aren’t you just creating more competition for your company?

My reason is simple.  Though it’s true that competition might come out of this information I’m sharing I believe that there is a need for more high quality marketing for home warranty.  The more home owners become aware of the service that is available to them the more the industry will grow and that in itself creates more business for me.  If my company loses traction against other marketers who enter the competitive space it won’t necessarily be because I wrote some tips and made them available for free.  It will more likely be because I did not do a good enough job of taking care of my clients.

I’m happy to help anybody who wants to produce high quality home warranty leads.  If you have questions I have not answered please let me know by visiting www.paradoxm.com.


What's your opinion?