To Angie’s List or Not To Angie’s List: That is the question

contractorI’ll be honest finding a contractor sucks!

Last winter an ice dam required me to get a small section of my roof replaced. Searching for a reputable roofer online to me seemed a kin to the proverbial searching for a needle in a haystack. How would I know if they really are a trusted professional producing high quality work?  After making numerous calls, and leaving messages for 5 or 6 different companies, I hadn’t gotten a single call back. I figured the roofing business must be pretty good if they aren’t concerned with acquiring potential clients. At this point I was seriously contemplating a career change and trading in my laptop for an industrial staple gun. Then the shingle gods shined on me and someone actually came out to give me an estimate. After assessing my roof, FROM THE GROUND, they said they would email me a quote. I must have missed the word NOT that came after that sentence because no quote ever found it’s way to my inbox.

In a time long, long ago (the 90’s) if you needed to find help with a home project you went to the yellow pages. YP Like most industries the digital era has disrupted how we search and select our home improvement professionals. Plumbers, Electricians, Roofers, and the like have had to adapt. If you’ve ever had the opportunity to thumb through the phone book you will see there is a disproportionate amount of businesses beginning with the letter A. Very similar to the advantages of being on the 1st page of a Google search, being on the first page of the directory gave companies a  leg up on their competition, not because they were better but simply because their listings appeared first.

So what’s a girl, who doesn’t know which end is the right side of a hammer, to do?  What about all these referrals sites out there, could this be the answer I was searching for? After all I trust other reviews on sites like Yelp, EBAY, Amazon, why not referral sites like Angie’s list? I still had a lot of questions though about professional referral sites:

  • Are referral sites worth it and do they charge for the information they provide?
  • What’s in it for them?
  • How do the service professionals feel about them?

To answer these questions I looked at one of the more well know sites,  Angie’s List.

About Angie…

How does Angie’s List work?

angies-list-logo-vector Angie’s List, a professional services referral site, hangs its hat on bringing consumers real reviews from real people. Consumers become “members” and can gain access to thousands reviews for countless number of services. Angie’s List reportedly ensures the reviews are coming from true consumers and not from family/friends of the professionals. Benefits claims include upfront pricing and service quality guarantees. Businesses and professionals become listed once a member writes a review, other providers/businesses can build profiles on Angie’s List but will appear after the providers with reviews.

funfacts

How does Angie’s List make money?

Angie’s List was founded in 1995. The site turned a profit for the first time in 2015, generating $10.2 million of net income in 2015 and adding 1,033,222 members. Revenue comes from memberships, although in 2016 Angie’s List launched a freemium Green members ship. Other memberships (Silver/Gold) offer additional features and can cost up to $80.

memberships

 

More revenue every year is coming from the service providers. ADREVAngie’s List allow those that have earned high A and B ratings and have met other eligibility requirements to advertise coupons, discounts, or other promotions to members. Also Angie’s List Big Deal is an e-commerce offering that provides additional revenue.

What do service providers think of Angie’s List?

The jury is out here if paying to advertise on Angie’s list is worth it, after all it does seem strange to have to pay a company to offer discounts on your service. Angie’s List has decreased in popularity for consumers with the advent of YELP but offering free membership might reverse this trend. Service providers also have access to better analytics and exposure with  Google AD words. I was surprised at how many negatives search results comes up when googling information about Angie’s List. If I was a service provider this alone would be enough to get me to steer clear. There are some tips available out there if you are going to invest marketing dollars on Angie’s List and you can read more about it here.

Conclusion

Important to the Angie’s List business model is trust. There claim: We’ve done the research for you, gets a little muddy when really it is just a collection of non expert opinions on various service providers work. Moving to a free membership model should have been done much sooner. They had an early advantage, predating the advent of YELP by almost 10 years, but by today standards their offering has no differentiated model. To keep Angie’s list relevant and continue to grow revenue from ADs they need to increase membership. Free access will help attract the eyeballs needed to make it worth service providers investment to advertise but they must also consider providing more for their service providers to give analytics and intelligence behind what is working and not working for them. Google of course is prime competition and probably a better place for service providers to invest. Also Instagram, Facebook and good old fashion WOM offer alternatives for both consumers and service providers to connect, advertise, display sample work, and offer disounts/special pricing.  Angie’s list gets a C in my book from a transparency and trust perspective and without these key elements they will eventually go the way of that dinosaur known as the Yellow Pages.

 

Epilogue:

I ended up going with good old fashion WOM and hired Rory the Roofer on the recommendation of a close friend. He showed up which put him “above” all the other roofers I tried to contact and he was cheap and gave me a discount for paying in cash. He also assured me he was licensed and had top quality work. The roof is still in place a year later so it all worked out!

 

 

7 comments

  1. Interesting article! I think there is certainly a significant opportunity for improvement in this space. Just yesterday I was thinking about how there is still a lot of opacity when finding service centers when I need work done in my car. I can shop around and ask for a quote, but at the end of the day, I still don’t know exactly what needs to be fixed and unless it’s a friend of a friend I don’t know which places I can trust. It’s challenging finding the right business model to fill this need. I feel like for Yelp, I can get thrown off by mixed reviews as they could be people who just had a one off bad experience. What’s the best way to get honest reviews? Amazon had an issue where companies were giving discounted products for “unbiased” reviews, but Amazon recently banned that. How can we implement an honest rating system for service providers? We discussed this when we talked about the Uber rating system, but how can we apply this to other venues?

  2. Nice post! Thought your overview of Angie’s List was very informative, and I liked how you shared your own roofing story! I had no clue that Angie’s List had paid memberships, I can see why Yelp pulled ahead. Just read Ben’s article about Foursquare having to beat back Yelp too (https://isys6621.com/2017/04/03/foursqaure-dead-i-dont-think-so/#comment-20092) – Yelp sure did a lot to disrupt other online companies, as Angie’s List is nearly a decade older!

  3. Great post! Similar situation to Josh, but flipped, I had no idea that Angie’s List had a free membership. I agree that Angie’s list was late to the table with the free membership, which ultimately hurt them once Yelp entered the market. There are just so many options out there for company reviews now that I find it hard to believe Angie’s List will survive. Had they developed the free service earlier, it may have helped to keep Yelp and other options from stealing market share. Angie’s List developed a great business model, but didn’t have the foresight to see where the industry was going and its either going to lead to their downfall or slow their growth substantially.

  4. Nice job with this post. I have never used Angie’s List but I definitely feel like it could provide value for me once I am out of college. It is interesting to see how the reputations for companies like this hold up since customers can have such vastly different experiences. For example, one contractor might do a great job for one customer and a poor job for another. If only the one who received poor service leaves a comment/review online for the worker, then chances are the reputation for the company won’t be great online. I have never used this site before but would be willing to try in the future. Contractors I have used have simply been people I Google searched or used through a service such as Handy. However, Handy has started charging increasingly high fees in order to use their service so I no longer use the site.

  5. Really interesting post! I personally have never used Angie’s list because of the requirement for a paid membership, but that may change now with the low end free membership option. The biggest issue I see with this, or any other reviews-based site for that matter, is that the vast majority of people will not write reviews. The reviews will predominantly come from people who have had either unusually pleasant or horrible experiences, with the latter being more likely. This puts businesses at a disadvantage because one poor experience with a client can ruin the reputation of their otherwise high quality service.

  6. NIce post. I confess that I am an Angies List member, but mainly because I haven’t gotten around to cancelling it (maybe I’ll do it now). I do prefer word of mouth, but sometimes its just hard to get someone that knows about a niche area (particularly if you’re new to an area, which is often when you need contractors most).

    Update: Apparently my membership has already expired, so we’ll see how long before they kick me out.

  7. Awesome post! I feel like not enough people do their due diligence with hiring contractors, and simply call the first people they find on google. My parents needed to get our house tented for termites this past summer and they didnt do any research on the company. The workers ended up robbing our house and when they looked at reviews after the fact they saw that many people had said that they stole things from their home. My dad ended up joining Angie’s list after that to make sure that nothing like this happens to us again. Sometimes people have to learn the hard way

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