Third-Party Referral Sites Help Boost Early-Stage Home Care Agencies

Third-party referral sites are simple marketing tools that can generate leads for home care agencies, but some agencies say that these third-party sites are best for early-stage companies and can become too expensive in the long run.

Referral sites like Caring.com, Aging Care, Home Advisor, Care In Homes and A Place for Mom have continued to capitalize on an ever-growing home care market. The general model is that a potential consumer turns to these sites to begin researching care options in their areas, and the site then passes along these potential leads to area senior living or home care providers. They typically charge a fee for leads and/or move-ins.

“It does bridge a gap between the clients and what types of care they need. That family may not know who to call or what types of services are out there,” Daniel Thom, president and CEO at Trusted Family Home Care, told Home Health Care News. “[Third-party referral sites] were able to get me going. I attribute those [third-party] referral sources to getting me to where I am at today. I couldn’t be where I am at without them.”

Thousand Oaks, California-based Trusted Family Home Care is offers private-duty services to clients across Ventura and Los Angeles counties.

Thom is currently at a crossroads, as he is trying to decide whether the fees for third-party sites are worth the potential clients.

“I am not bashing them by any means,” Thom said. “[But] I am at an impasse now, where I need to decide, do I want to continue to spend that kind of money on these referral sources, or take that money and put it into some employees that can go out there and market my business and then start to get these referral sources (like skilled nursing facilities or hospitals) to start giving me those clients … because those don’t cost me per referral.”

Trusted Family Home Care uses Caring.com, Care In Homes and Aging Care.

Third-party referral site fees can be expensive, but agencies should think of the fees as a part of an overall marketing budget and then decide whether the price is worth it, Peter Droubay, director of recruiting, on-boarding and training at Caring.com, told HHCN. It is a misconception that agencies pay directly for clients, he also noted. Rather, they are paying for an opportunity to market themselves to someone who has already indicated they are in the market for home care services.

San Mateo, California-based Caring.com is a website and senior care resource company that offers senior care related information and a directory of caregiving services. It is the second-largest third-party referral site nationally, and is being led by a new CEO, Jim Rosenthal, who took the position in late July. Rosenthal is a partner in private equity firm Caring Holdings, which acquired Caring.com in May 2018.

“We offer a home care agency an additional marketing or lead generation source — any good business is built on numerous sources of leads or marketing,” Droubay said. “[Third-party sites] are one more way of getting leads in … And in each way you market there is a cost. In our case, the cost is per lead.”

The price per lead at Caring.com is $50.

“Is it worth it? Is it not worth?” Droubay said. “The majority of people that use us definitely feel like it’s worth it, that’s why they keep buying leads. And we definitely feel like it’s worth it, because we see people that are successful that way. Just like placing an ad somewhere in a publication, a savvy business owner has to count the number of people and see what the conversion rate is.”

It is just a math problem from a business standpoint, Droubay added.

The newer, the better

For newer offices these sites can be an easy way to get into the business as soon as their doors open.

“We utilize third-party referrals quite a lot,” Lenny Verkhoglaz, CEO at Executive Care, told HHCN. “[For] the newer offices, I think it’s a great source of referrals to start. The referrals come in at a brisk pace, but there is a lot more work to be done because they come from the internet — people are just clicking away.”

New Jersey-based Executive Care is a home care franchise company that employs roughly 1,000 people in 22 offices across 11 states. The company has several locations in various stages of development.

Executive Care uses such sites as Aging Care and Care in Homes, according to the company.

“Leads through third-party referrals are what I call tire kickers,” Verkhoglaz said. “They are not [necessarily] committed to care. But there is a place for these referrals — it’s a great start for newer companies and we value those relationships. Some of our newer franchisees have built a decent number of clients thanks to those third-party referral companies.”

As Executive Care locations grow and expand with more organic leads in their markets the need for these sites can deteriorate naturally.

“The offices that have been operating for two-plus years, the dependency on third-party referrals is a lot less,” Verkhoglaz said. “By that time, they have established many different relationships with referral sources on the ground such as skilled nursing facilities, assisted living [communities] and hospitals. They draw more organic business [like] word of mouth referrals.”

The conversion rate can be relatively low on third-party leads as multiple agencies receive the information at a time.

There is about a 2% conversion rate on these clients, and it is a lot of work to sift through the leads and get a person on the phone, according to Verkhoglaz.

Turning those potential leads into clients can be more work for agencies too, as some third-party sites don’t properly vet a client before passing along the referral.

“Caring.com is doing their job … the company will talk to a client and ask them what their needs are and what their budgets is. But, some other referral agencies don’t do that — they don’t dig into whether a client can afford the service, they’ll just connect them to agencies,” Thom said.

This can result in frustration and wasted resources.

“I get a referral, and I tell them how much it costs, and they immediately hang up because they can’t afford it,” Thom said. “Had the [third-party] referral source dug in deeper to see if [a client] could afford it, they would have known this family could not afford home care services and not have wasted [the client’s] time, my time and my money … We are spending all this money on these leads that will never come to fruition because the client could never afford it in the first place.”

Trusted Family Home Care has spent about $21,000 year-to-date on third-party referrals, which translates to client acquisition costs of about $1,800 per person, according to Thom.

Is the price right?

The fees associated with third-party sites can be a hard line for some agencies.

“We used to use one when we initially started the business, called Home Advisor,” Said Aliyev, president at Virginia Home Care Services, told HHCN. “We had to pay $20 to $30 per lead — no matter how good or bad the lead was, it was $20 to $30. I had a problem with that because after a certain amount of time we noticed nothing [was] coming … that’s why we stopped.”

While Virginia Home Care Services backed away from third-party referrals after a few months, calling up these leads did help the company sharpen its sales pitch, Aliyev noted.

Vienna, Virginia-based Virginia Home Care Services is a home care provider offering services like private duty, companion and respite care to 110 clients in Northern Virginia. The company employs about 150 staff members.

Agencies need to consider the cost of alternative forms of internet marketing, Droubay said.

“We have hundreds of agencies that have told us this is worth it,” he said. “It is far less [expensive] than any other advertising sources they can go to. They are going to spend more with Google on search-engine marketing. Even if they bought 20 leads to get one client. That one client more than pays for it.”

Written by Kaitlyn Mattson