Competing With Angi, Thumbtack, and Shared Lead Services: The Real Economics

Angi, Thumbtack, HomeAdvisor, Porch, Houzz… the list keeps growing.

These platforms promise a steady stream of leads. And they deliver leads. The question is whether the math actually works for your business, whether you’re building something sustainable, and whether there’s a better way to spend that money.

How shared lead platforms work

The business model is simple. A homeowner submits a project request. The platform sells that lead to 3-5 contractors. Those contractors compete to win the job. The platform charges each contractor for the lead regardless of whether anyone wins the work.

From the platform’s perspective, this is a great business. They sell the same lead multiple times and get paid whether you close the job or not.

From your perspective, it’s more complicated.

The real cost of shared leads

Let’s work through the math.

Angi and HomeAdvisor typically charge $15-85 per lead depending on service type and location, plus an annual membership fee of $300-500. Some markets and high-value services run $100 or more per lead. Thumbtack charges $35-75 per lead with a pay-per-quote model.

Say you’re paying an average of $50 per lead.

If your close rate on these leads is 15%, which is on the better end for shared leads, then 100 leads costs you $5,000 and you close 15 jobs. Your cost per acquisition is $333.

If your close rate drops to 10%, those same 100 leads at $5,000 only produce 10 jobs. Cost per acquisition rises to $500.

At a 5% close rate, which isn’t uncommon when you’re competing against 4 other contractors, 100 leads produces just 5 jobs. Cost per acquisition: $1,000.

Now compare that to Google Ads where leads might cost $100 each but you’re the only contractor calling. At a 20% close rate, $100 leads produce one job for every 5 leads. Cost per acquisition: $500.

The Google leads cost twice as much per lead but deliver the same cost per acquisition because you’re not competing against other contractors for every single opportunity. And on many jobs, the exclusive lead actually works out cheaper because your close rate is so much higher.

Cost per lead doesn’t tell the whole story. Cost per acquisition is what matters.

Why close rates are lower on shared platforms

By the time you call a lead from Angi or Thumbtack, 3-4 other contractors have probably already called. The homeowner is fielding multiple calls, comparing quotes, and often feeling overwhelmed. They’re in comparison shopping mode, which usually means they’re focused on finding the lowest price rather than the best fit.

The data shows that 35-50% of these jobs go to whoever responds first. Speed to lead matters even more on shared platforms than it does elsewhere. If you’re not calling within 5 minutes, someone else is already building rapport with your potential customer.

Learn more about the 5-minute rule and why speed matters.

Lead quality also varies wildly. Not everyone who fills out a form is ready to hire. Some are just price-checking to see what things cost. Some entered fake information. Industry research suggests 10-23% of leads from these platforms may be fake or unresponsive.

And there’s a positioning problem. On your own website, you control the first impression. You can build trust through your messaging, your reviews, your branding. On Angi, you’re just one tile in a grid of contractors. The platform controls the experience, not you.

The hidden costs

Beyond what you pay per lead, there are other costs that don’t show up on your invoice.

Every fake phone number and tire-kicker wastes your time. And time spent chasing bad leads is time not spent on good ones.

When 5 contractors compete for every job, there’s pressure to lower your price to win. That erodes your margins even on the jobs you do close. You end up working more for less.

When you pay for platform leads, you don’t build any equity in your own marketing. No SEO improvements, no stronger reputation, no growing website traffic. The moment you stop paying, the leads stop. You’re renting demand instead of owning it.

Most platforms lock you into contracts with cancellation fees. Getting out can cost hundreds of dollars even if the leads aren’t working for you.

And the reviews you earn on these platforms belong to the platform. If you leave Angi, those reviews don’t transfer to your Google listing. You’re building someone else’s asset, not your own.

When platform leads make sense

They’re not all bad. Platform leads can work well in specific situations.

When you’re new and need volume, you have to get leads from somewhere. A new contractor without reviews or search rankings can use platforms to fill the pipeline while building organic presence. It’s expensive, but it’s faster than waiting months for SEO to kick in.

When you have excess capacity and your schedule has holes, platform leads can fill slow periods. Some revenue is better than no revenue, even if the margins aren’t great.

When you’ve mastered speed to lead, you can actually win on shared platforms. If you’re the first to call every single time and you have a solid sales process, close rates go up dramatically. Some contractors build entire systems around winning the speed game on shared leads.

When the math works for your trade, higher ticket services can absorb higher acquisition costs. A $15,000 roofing job with a $500 cost per acquisition is only 3.3%. That’s fine. A $500 handyman job with a $300 cost per acquisition is 60%. That’s not sustainable.

When you treat it as one channel among many, platforms are less risky. If Angi is 20% of your leads and you diversify across other channels, you have options. If Angi is 80% of your leads, you have a dependency problem.

When to reduce platform dependency

If you’re already established with reviews, rankings, and a website that generates organic leads, you probably don’t need to rent leads from platforms. You can generate them cheaper yourself.

If your close rate on platform leads is under 10%, the math is hard to make work. You’re paying for a lot of leads that go nowhere.

If every job from these platforms turns into a price war where you’re competing to be the cheapest, you’re eroding your margins and devaluing your services.

If you can’t support 5-minute response time, you’re going to lose to contractors who can. The first responder wins 35-50% of shared leads. If you’re slow, someone else is winning with your money.

And if platforms are your only lead source, you’re in a vulnerable position. The platform can raise prices, change their algorithm, or deprioritize your listing. When your entire business depends on one company’s decisions, you don’t really control your own future.

The alternative: owning your lead generation

Instead of renting leads, you can invest in channels that you own.

Your website combined with SEO generates leads with higher close rates, typically 15-25%, because visitors found you organically and came to your site specifically. The leads are exclusive. The cost per lead drops over time as your organic traffic grows. And you’re building equity that makes your business more valuable.

Google Ads is fast to start and leads are exclusive to you. You have more control over targeting and messaging than on lead platforms.

Google Local Service Ads use a pay-per-lead model similar to Angi, but the leads are more exclusive and the Google Guaranteed badge builds trust in a way that platform listings don’t.

Referrals have the highest close rates at 40-60% and cost almost nothing. They compound over time as happy customers tell more people about you. This is real equity that appreciates.

Learn more about alternative lead generation methods that build equity instead of renting attention.

How to reduce platform dependency

Start by tracking your real cost per acquisition by source. Not cost per lead, cost per closed job. This tells you which sources actually work and which ones just feel busy.

Invest in your website with basic SEO, a strong Google Business Profile, and consistent review generation. These take 6-12 months to build momentum but create lasting value.

Start Google Ads with a small budget of $500-1,000 per month to test. The leads might cost more but they often close better because you’re not competing with 4 other contractors.

Build referral systems that ask for referrals systematically, offer incentives, and track where your referrals come from. Learn more about social proof and referral programs.

As your owned channels grow, reduce platform spend. Don’t quit cold turkey, but shift budget gradually toward channels that build equity.

The goal is for platforms to become a supplement rather than your foundation.

Where to go next

To understand what you should pay per lead by trade, check the benchmarks. To understand why leads might not be converting, look at common funnel leaks. And to understand what a customer is really worth over time, dig into lifetime value.

The best lead is one you don’t have to share.