Why pay-per-lead directories are not in the best interest of people seeking professional services

 Going in blind  

Having been in the professional online directory business for over fourteen years, we have seen a lot of directory business models come and go. Pay-per-lead directories have their place, but are not suited for professional services. Here is why:


First some history


My online directory, FindaProfessional, initially launched in 2004 with FindanAdvisor - a directory of financial and investment advisors. Prior to 2014 I had worked for several years as an investment advisor. In this time I met many people who were looking for investment advice – often people who had just retired and needed to invest large lump sums to sustain themselves financially for the rest of their days. I also met a lot of people who had made big investments with prior financial advisors, and whose investments had turned sour and needed emergency rescue.


What confounded me was how many of these investors knew so little about the original financial advisors they had appointed. They didn’t know their experience, their professional qualifications and even, in many instances, who they actually officially represented. “So how did you meet them?” I would ask. “Oh, he phoned me one day with a proposal and I thought he was such a nice guy.” Or “They worked for my bank.” Or “An old colleague gave them my name.”


Informed decisions - total transparency


I was already enamoured with the internet back then, even though it had not yet gone mainstream, and I recognised the opportunity to launch an online directory of financial advisors where all of the important information that clients should be asking them was showcased. This empowered South Africans seeking financial advice to make proactive, informed decisions when making the high-stakes decisions regarding their long-term financial health. One of our mantras for our web visitors is “Do the choosing yourself – don’t wait to be chosen!”


This model proved to be an immediate hit (See: It’s a lot easier to find a financial advisor) and so it wasn’t long before we rolled out two more professional directories - Find an Accountant - a directory of South African accountants, and Find an Attorney - a directory of South African attorneys. As with financial and investment advisors, finding the right accountant for a business, or right attorney to draft a will (for example), can have a significant impact on a person’s financial future.


Our business model is a subscription based service, where the listed professionals pay us a standard monthly (or annual) fee to showcase all of their information  After a visitor to our website has found the right fit for their exact individual needs, they contact the professional to request services.


Customer X - going in blind


Pay-per-lead directories, on the other hand, have a different business model. With their model, visitors to their website simply make a request. “I am in Benoni and need an accountant for Annual Financial Statements” is one example. The pay-per-lead directory then pitches this request (without the contact details of the customer) to their listed accountants, who, if they are interested in following up with this lead, pay a fee in order to get the potential client’s details.

There is zero transparency in this service offering. The accountants remain hidden from the people requiring accounting services, and the people requiring accounting services are hidden from the accountants. All information is controlled by the middle-man, and only released for a fee.


The popularity of this kind of directory with consumers boils down to one thing - convenience. The process for the consumer is quick and frictionless – type a one-liner on a webform for the service you are requiring, and within the hour, hungry service providers are contacting you. Easy Peesy.


But let's walk step-by-step through how the pay-per-lead process works. The consumer pitches their requirements to the directory, then the directory pitches the consumer to their listed service providers for a fee. 

In order to sustain themselves in the long term, the directory’s pricing of the offer to the service providers ultimately evolves into an outright auction – the service provider prepared to pay the highest for the lead ends up contacting the consumer (regardless of who the service provider is, how good they are, or whether they are the right match for your precise needs!)


Often, the service providers who are prepared to pay the most for the lead are the most desperate for new business. This is not necessarily a good thing. It is often the best service providers who are not desperate to take on any new unknown client as they already have plenty of work on their hands.


The invisible cost of convenience


But, as with too many things in our modern lives – convenience comes at a cost. Yes, the rushed consumer can save themselves the twenty minutes it takes to do some research on who they are requesting services from. However, when looking for  professionals, who have considerable leverage on long-term financial outcomes, the twenty minutes saved by the customer could potentially cost them for the next 20 years. Appoint the wrong financial advisor and a person could run out of money in their retirement. Appoint the wrong accountant for a business and the business might never reach its full potential.


Services like finding a plumber, or finding a furniture removal firm, have far less long-term ramifications. Appoint the wrong service provider in these cases and a person might lose R1000 fixing a toilet and having to shell out another R1000 to get another plumber. In a month’s time the whole thing is behind them. In cases like this, quick, convenient service may trump the homework it takes to make a properly informed decision. This is not the case with professional services!


Pay-per-lead directories - pitfalls for advertisers


Pay-per-lead directories often appear attractive to service providers too. Why pay an ongoing monthly fee to list on a subscription directory when you could just pay for the actual leads you get?


However, even for service providers it is not as favourable as it seems. Once the professional has paid for a lead - the approach to the customer is not that far removed from a cold call. All the service provider knows is that there is a “Pete from Pietermaritzburg” that needs an auditor.


Likewise, the customer being approached by the professional knows nothing about them, other than that are listed on XYZ Pay-per-lead Directory. So, the professional, has to start their sales pitch from the beginning. Their fees, their experience, their modus-operandi. In many cases, the sale never materialises, the customer or the service-provider (or both) realising that their needs and expectations were misaligned.


Compare this experience with the one you get as a professional listed on a comprehensive, specialist subscription directory. The customer already knows who you are, what you do, what your average hourly fees are, what the minimum level of business is that you are prepared to take on, and what you look like. This customer is what they call in the sales industry a “highly qualified lead”. Not all leads are equal 


Many pay-per-lead directories sell the lead to more than one service provider. If four service providers are prepared to pay the going rate for the lead, four will get it. In these instances the customer will be contacted by four eager contenders, and invariably the sale will go to the provider that quotes lowest. A customer using a pay-per-lead directory is clearly not that interested in differentiating professionals based on their expertise or quality of their offering, so in the end, price will be the differentiator. A race to the bottom ensues.

Another reason traditional online directories beat pay-per-lead directories is because pay-per-lead directories do not pass on any SEO benefit to the professional's own website.


Full disclosure


As a project director of a subscription directory, I obviously have a vested interest in this debate. However, having being part of this industry for many years, I also have a unique bird’s eye view of how the online directory ecosystem works, and have tried to apply my mind as objectively as possible. I would welcome any constructive feedback on what I have written. You can send any comments to chris @, and I’ll be sure to respond.



Chris Preen