Back to Our Blog

Customer Service: Angie's List - Your Money is where our heart is

Customer Service: Angie's List - Your Money is where our heart is

The pioneer in the online home improvement referral services, Angie’s list, started over 20 years ago with a noble public awareness message of homeowners coming together on an online platform to share their objective home repair experiences, so that they could help each other by recommending the good service providers and avoiding the bad ones. Angie’s List would collect a fee from these homeowners who wanted to gain access to their portal and in return would connect them with service professionals based exclusively on their user rating and independent from any quid pro quo relationship from the service providers. 

Starting from scratch to over $300 million in revenue, Angie’s list, over the last 20 years, has grown into a giant corporation through a series of carefully crafted advertisements featuring its friendly-faced Midwesterner founder, Angie Hicks. The ads personify Ms. Hicks as a humble, soft spoken, honest, hardworking small town girl turned Harvard-educated businesswoman delivering a simple promise to the home owners: “Reviews you can trust.” Who can forget their endearing taglines from their advertising over the years, like the one defining themselves as a place where “real people” leave “real reviews” for everything from dog walkers to carpenters; to it’s a site where the “members come first”, and their trust is the “number one priority”; to “businesses don’t pay” to get listed; to the latest one “Your home is where our heart is” – or so we were led to believe.

In reality, Angie’s List never lived up to the noble claims it made above. This is simply a function of their business model, whose modus operandi was to gain the trust of their customers by promising to bat for them, and to add legitimacy to that claim, setup a pay-wall to take their money. They then turnaround and in a major betrayal of their customers’ trust, also adopt the “Pay to Play” model wherein businesses that paid (advertised), were able to secure higher page-ranking. They took this model to the next level, where some businesses with deep pockets would pay thousands of dollars a month and tens of thousands of dollars a year for the ability to rotate as the top 5 or 10 search results. Through this egregious business model of dipping into the pockets of both their customers and businesses, they made it clear that they were serving only one master: themselves.

 How are consumers supposed to get reliable, objective references from a big business (Angie’s List) that accepts payoff from the people that they claim to police? They don’t. And that was the basis of a lawsuit filed by Janelle Moore, a resident of Pennsylvania in 2015, who claims “…the online-review site lures consumers of local service providers to pay for access to purportedly unfiltered reviews, ratings and search rankings when it actually profits from secretly manipulating those features.”

Angie’s list settled the lawsuit the same year for $1.4 million without admitting to any wrongdoing but “agreed to provide expanded disclosures about service-provider advertising on its website and in its membership agreement,” thus signaling a clear victory for its customers.

According to an article published in the Daily Beast titled “Is Angie’s List Making Business List Owners Pay for Top Spot?,” its author, Abby Haglage, describes how “Questions about the authenticity of Angie’s List have been around for years, fueled by the company’s revenue stream, which relies heavily on advertising. In 2014, for example, 76 percent of the company’s $315 million total revenue came from service providers (advertising). Twenty-three percent came from membership.” 

She also states, “Similar numbers raised flags for Consumer Reports’ Jeff Blyskal, who reviewed the site along with Yelp and others in 2013. ‘[Angie’s List] makes a big point to say they’re consumer-driven, when in fact 70 percent of their revenue comes from advertising,’ Blyskal wrote. ‘It’s not advertising Coca Cola, it’s advertising from the companies they rate.’”

Ms. Haglage further writes, “A spokesperson for Angie’s List at the time called the allegations ‘baseless,’ and pointed to the company’s public SEC filings, which ‘contain robust disclosures regarding its operations.’”

The comments mentioned above follow a similar pattern of opaqueness, deception and misdirection from Angie’s List every time they’re challenged on their business model. Why can’t they be transparent about it? How often, or why do, their customers have to look up its SEC filings to understand its revenue model?

Anyway, using these evasive techniques on defense, and doubling down on slick advertising - to create a fairy tale narrative of the company’s history - on the offense, Angie’s List transformed itself into an online juggernaut boasting a customer base of 3 million users, with $100’s of millions in revenue, along with millions of reviews of businesses across hundreds of categories.

With millions of customers in the bag, and with even more millions of reviews collected over the last 20 years from these customers, Angie’s List chartered a new course this year (2016) to focus on doing what it does best – make more money for itself. How? By introducing a new tier of membership, that was rolled out earlier this year, that lets customers search for businesses and their ratings for “free.” This is a game changer. By pretending to represent its customers’ interests over the last 20 years, Angie’s List restricted its marketing services to its paying customers.

But each year it was in business, its business model was being discredited from many fronts, so they decided to turn the negative into a positive. Now, in addition to their paying customers, they are adding a brand new set of customers whose “free” search requests for providers and objective ratings will return the same search results that the paying customers have been receiving for the past 20 years - businesses that paid to appear as the top search results.  Angie’s List however will not present it that way to its brand new crop of customers. They will use canned statements like “in direct response to the feedback received from our customers, we’re improving and increasing our site access to our customers.”

This move frees Angie’s List from any conflict of interest and litigation from its customers who access their site for free; because they can now claim that the “free membership” is courtesy of the paying businesses. And by forcing its paying customers and businesses to accept their ever changing “Membership Agreement” terms in order to access the site, thus making it nearly impossible for them to pursue a legal recourse, Angie’s List continues to line its pockets by picking the pockets of its users and businesses while insulating itself even more from any liability.   

Additionally, with this move, they can finally come out of the shadows and openly solicit advertising from the businesses which they were doing anyway for the past 20 years but away from the purview of their paying customers. By opening up their huge existing (paying), and potentially an even bigger (free) customer base for solicitations, Angie’s List can charge even heftier fees than it already does from these businesses. Don’t forget, even before this move, Angie’s List derived more than 3/4th of its revenue from advertising.

We at housspros.com provide similar services to Angie’s List but we operate at a smaller level. Ok, at a much, much smaller level – a one man operation. What we lack in size, customers, businesses, revenue, name recognition and a bunch of whole other things that Angie’s List has, we make it up through a few attributes that they do not. Honesty, fairness, and an unrelenting focus on taking care of our constituents: the users of our website looking for home repair services and businesses that provide those services.

So here’s our challenge to both, the users and businesses of Angie’s List and all the other big players in this space: If you’re sick and tired of being scammed by these companies and have the guts to make a bold change to a new provider of online search services for home repair, we want to assure you that we’re up to the challenge to take on these behemoths. And as a first step in this direction, we’ve put our money where our mouth is by committing our time and treasure into the development of our website.

So please take a spin, and register on our portal. To our site users: Our services are free to you. And we don’t derive any revenue through advertising, period. Marketers like Angie’s List have a long history of convincing themselves and the businesses that advertise with them that non-marketers like you actually like marketing. We’re like you. We don’t like marketing, either. Because all it does is add another cost to the businesses, which will promptly pass on those costs to you. If you don’t believe us, put us to the test. We challenge you to use any software utility available to you to run tests to verify for yourselves that we don’t track your activity on our site to spam you.

Business Owners: We don’t use the “Pay-per-lead” or the “Pay to Play” model, so leave your credit card in your wallet and please feel free to use our website. The market leader and the other big players in this space have brainwashed you into thinking you cannot get a fair shake until you pay. We’re here to prove otherwise, so please register.

To conclude, we want to leave you with the following tagline – which we shamelessly stole from a recent Cadillac commercial - “Only those who dare drive the world forward.”

Image Source: phillymag.com



Last Updated: 2017-10-26 20:06:40

close

Letters remaining :

close
close

Add a Post

Letters remaining :

close

Add a Video