Posted: Oct 4, 2022
Category: Live Performance
**Guest post written by Matt Santry, founder of www.WellPaidMusician.com.
Alright, let's get right into it. What's this magical app?
The app is called Thumbtack. I think it's overlooked by musicians because it's an app for every imaginable freelancer from dog walkers, plumbers, website designers, and yes, performing musicians.
So what sets this app apart from Fiverr and other freelancing marketplaces? The difference is it's focused on local in-person services. While remote services are great for some types of freelancers, there's still no substitute for in-person gigs for live performers.
Alright, so how does it work? There's no membership fee and Thumbtack does not take a cut of your revenue. So what's their business model? How do they make money?
Aside from about 700 million in venture capital funding, their revenue comes from charging pros, freelancers like us, for leads. So you pay for leads as you go.
Now, this is where a lot of freelancers go wrong. And why you see all the hate about Thumbtack. Here's their Better Business Bureau reviews. 1.15 out of 5 Stars.
So we should probably stay away from Thumbtack. Right?
Well, just to put this in perspective, I'm sure you've used Lyft before. Right? Let's look at their reviews on the Better Business Bureau. 1.11 out of 5 Stars.
It seems people love to hate. Now, is that going to deter you from using Lyft's ride share services? I didn't think so.
The pay-per-lead model can be tricky for sure. But the good news is, if you know how to use Thumbtack and you're good at what you do, then you'll be profitable because others will quit and leave scathing reviews.
Here's a look my profiles from the customer perspective.
I have a total of 117 confirmed jobs. Now that's since September of 2016, it's currently September, 2022, but take into account losing a year or so with the shutdowns in the pandemic, we'll call it less than 5 years of available work.
I downloaded the receipts of every lead I've ever purchased from Thumbtack. It’s a grand total $13,968.99. But that generated $200,201 in gross revenue from gigs! Again, this is gross revenue. i.e. before paying other musicians, travel, meals, etc. But, I’m using gross revenue because that's the number an agency uses to take their commission.
For example, if an agency booked your band for $5,000, they're typically going to take 20%, which is $1,000 commission. That leaves you with $4,000 to pay the band and other expenses.
Let’s have another look at the numbers from my example.
Total gross revenue from 117 gigs ~ $200,000.
Amount spent on leads ~ $14,000.
That’s approximately 7% of total revenue paid to Thumbtack.
Anything under 20% and you are winning the Thumbtack game. Why? Because as I just mentioned, an agency is going to take 20% or more of your gross revenue.
#1. No matter what industry you are in, make sure you set your customer preferences and availability correctly. For example, there's this great feature where you can set a minimum customer budget. That way you can't get charged for leads that don't meet your minimum job fee. Also, make sure you block off book dates that you’re unavailable on your calendar. That will prevent you from paying for leads for gigs you can’t do. It’s a costly mistake if you don’t keep your calendar current.
#2. Keep track of your spending on a quarterly basis and optimize. There's always going to be leads you pay for that don't turn into gigs. That number will vary from week to week. Look at the bigger picture, especially if you have busy and slow seasons. After your first 3 months, make sure you’ll still under that 20% zone of lead costs to gross revenue.
#3. Don't be discouraged if you're just starting out because Thumbtack rewards new professionals on their platform. It's common to see new pros ranking on the first search page and it's pretty easy to do. Just make sure your profile strength says "super strong". How? Complete all the required fields, link your picks and video, and get 10 off-site reviews. Bam. You start showing up and getting contacted by potential customers.
Last, this blog is based on a transcript from a tutorial video. You can watch it HERE.
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