Over the last decade, a new wave of consumer-driven agencies such as Angie’s List, Home Advisor, Yelp, and Thumbtack have popped up across the Internet. Their sole existence is to match a consumer with the right service contractor that provides a service or product he or she needs. Although the concept is simple, don’t look for any of these web-based businesses to resemble each other beyond the initial premise.
UPDATE: On May 1, 2017 it was announced that Angie’s List will merge with competitor HomeAdvisor. Learn more about what this means for service contractors.
When Angie’s List launched back in 1995, Angie Hicks, it’s founder, wanted to find a trustworthy online model for determining the quality of products or services a company provides. She was looking for real answers from real people about real issues. The concept had a lot of promise, but finding a way to turn into a profitable business was another matter.
It took the company roughly ten years to establish any real footing. With the help of investors and a lot of awareness, Angie’s List grew and became a nationwide phenomenon. Angie’s list could provide an unbiased platform for consumers to post reviews and give more detailed feedback about their experience with a given provider. Contractors could sign up, create accounts and advertise their services. In those early days, most of the services provided on Angie’s List were contractors and home improvement companies.
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Fast forward to the end of 2015; Angie’s List has grown to 70,000 subscribers, expanded into other markets such as healthcare and auto care and has reported over 3.2 million paid memberships.
With all of Angie’s List’s massive success, there is also plenty of criticism to go around. The biggest issue is whether paid prescriptions are worth the money. Unlike most of the other services, consumers must pay to access information about businesses, leave reviews, and utilize other features of the services. The membership runs three-tier with added benefits and features the higher your membership goes up. While the jury is still out on the value of a paid subscription, the tradeoff is easy user navigation and user-friendly options, in-depth reviews (as opposed to rants) that are trustworthy, and collective feedback that gives you a more accurate picture of the type and quality of service a contractor provides.
As a contractor, Angie’s List can be beneficial in getting you real interaction with real people who need real jobs. Keep in mind; your chances of landing a gig often hinge on three things:
- Amass several positive reviews and maintain an A rating. This is sure to keep you in the front of the line when clients come knocking.
- Offer discounts straight to customers or through Angie’s List ‘Big Deal’ program. These are usually brought to the beginning of the results pages.
- Paid listings can also get you on center stage. Something you need to remember, however, is that with a paid listing you are competing with other companies who are well established on Angie’s List, meaning they have several reviews and lots of ratings. It’s best to build your reputation on the free account before you begin investing money to give your business more airtime.
The Competition: Home Advisor, Yelp, and Thumbtack
As the credibility and business model of Angie’s List is currently in question, other Internet companies have popped up with alternatives to the customer – business relationship assessment platform. Among the notables are Home Advisor, Thumbtack, and Yelp. They’re all built on the same idea: give both customers and businesses a platform to leave reviews, ratings, and offer advice or additional comments. This is done in a public setting for all to see. Businesses do have an opportunity to offer rebuttal either directly or indirectly. They can also offer apology or restitution if necessary.
The web-based consumer companies offer more options in a more controlled setting than the Google Rating & Review Package. They all have similar advantages that make them more attractive to contractors:
- Exclusivity and notoriety in a smaller arena.
- Opportunities to compete on the same level with more reputable companies.
- Assuming the worth of the payoff, a more straightforward, direct, and cost-efficient method of advertising.
- Ability to maintain a positive identity and PR in the community.
- Ability to vet clients.
Memberships & Fees
The biggest criticism of Angie’s List is the investment vs. the payoff. Any company who doesn’t mind paying anywhere from $22 to upwards of thousands of dollars to get the edge over the competition may find Angie’s List to be very valuable. Especially if their bottom line has increased exponentially. The long line of complaints, however, has become a cautionary tale for newer companies like Thumbtack and Home Advisor.
Home Advisor bypasses the long line of competitors somewhat, by fine-tuning the consumer’s search. A potential client will sign-on and answer a series of detailed questions before a list of ideal candidates pops up. Those seeking contracting services can also fill out lead cards. This is where Home Advisor generates its revenue. Rather than requiring paid memberships, HA offers leads that cost anywhere from $20 to $80 to the contractor. This has sharply divided camps of both criticism and praise. Some contractors have found enormous success with HA, while others have dismissed it as a scam. Contractor Beware: Your company will go through a rigorous background check before being approved. This is of great benefit to consumers, however, who are tired of being taken advantage of by less-than-honest contractors.
Home Advisor’s ability to qualify who is added to its roster is a better option than Yelp’s wide open platform. For many businesses, it’s the hell’s kitchen of review sites. A new business in town either has to deal with its sudden enormous success or a well-established business is now staving off a PR disaster from a series of criticisms. Yelp is second only to Google regarding business reviews & rating activity. It can do wonders for business or bury it indefinitely. Before adding your company to Yelp’s directory, have a well laid out, educated strategy for dealing with the traffic. If you are proactive, get expert advice, and develop a game-plan, Yelp can become your lemonade.
Like, Home Advisor and Yelp, Thumbtack offers a more open platform for any market than Angie’s List. It currently boasts that it’s in over 1,100 industries. Thumbtack is similar to Home Advisor by charging each connection with a potential client. They go one step further, however, by charging companies to post bids for client requests instead of following up on leads. The contractor pays $1.67 per Thumbtack credit that is used to bid on a request. It’s certainly less expensive than Home Advisor’s fees, but considering that Thumbtack attracts lots of smaller businesses, it’s difficult to maintain higher prices with a mass appeal. For this reason, a mega-contractor looking to find clients is just as likely to experience success on Home Advisor regardless of the higher fees.
The Final Analysis
Angie’s List is built for contractors and home improvement companies. Its entire existence has relied on connecting clients with contractors in various industries, but not necessarily with to help with business management. But is it worth the monthly fee? Thumbtack and Home Advisor don’t have monthly fees but charge a la carte for leads or bids. A contractor’s ability to convert them and seal the deal should find either to be a great resource.
While Yelp is free (although they aggressively try to sell their marketing products), it can also be a jungle where it’s survival of the fittest. Yelp can work in your favor, however, with some strategy. Find your needs, narrow your market, and know what you are getting into before you sign on. This will increase your chances of success on any of these sites.