I recently saw a commercial on TV for an interesting concept called “Angie’s List.” It seems like a great business idea that has taken off. It also might be a way to save the cost of home protection insurance plans by simply hiring better, cheaper contractors. The service provides consumers with ratings on businesses in their local areas, helping them to make an informed decision on the companies they choose to do business with. For example, if someone holds themselves out to be a pro electrician but is really only doing the work as one of his retirement hobbies, ostensibly, you’ll know about it before you hire him.
It sounds a bit like another version of the Better Business Bureau or Consumer Reports, but a little research shows that it’s actually member-driven. Subscribing to the service allows you to rate businesses and read the ratings provided by other members.
Sounds fair so far.
Officially, Angie’s List is considered to be a “website aggregator,” which is a fancy term for a website that collects consumer reviews of local businesses and makes them available to consumers. What sets Angie’s List apart is that it charges consumers to have access to the aggregated information. The company claims that this gives more integrity to the reported information by preventing anonymous complaints or bogus reviews by the businesses themselves.
How It Works
This is truly one of many fascinating entrepreneurial ideas. The site was founded by Angie Hicks, hence the name “Angie’s List,” and it claims to receive something on the order of 40,000 consumer reviews in a typical month. While those are impressive numbers, they aren’t uniform. The company admits to being stronger in some markets than others. In some cities they may have thousands of business providers reviewed; in others the list may be slim.
According to the company, the site works in three basic steps:
- Whenever you need a plumber, roofer, dentist, electrician, auto mechanic, physician, dermatologist, landscaper (or anyone from our 500+ categories), search Angie’s List online, by phone or via fax.
- You’ll receive ratings and reviews of local professionals who’ve done work for other members in your area, plus important details about the type of work they’ve done, prices, professionalism and timeliness.
- Once your choice is made, circle back with Angie’s List to share your feedback.
Sounds simple in concept, so it’s not hard to see why it could work.
As mentioned at the outset, Angie’s List charges fees for their service. Fees can be annual or monthly. Monthly memberships require a one-time signup fee when joining. There are three lists available:
- Angie’s List, which covers local services, such as lawn care and pet care;
- Angie’s List Health & Wellness, which includes doctors, dentists, hospitals and various other healthcare providers; and
- Angie’s Bundle, which allows you to have both of the previous lists for one price.
The fees vary by city; in Atlanta it’s $4.25 per month, plus a $10 signup fee — or $39 for one year — for each of the two primary lists. Or you can buy access to both lists under the Bundle for $6.80 per month, plus a single $10 signup fee — or $62.40 for one year. That’s a lot cheaper than home protection plans, and I’ll bet the service providers will come over and do the job for (often times) less than the deductible the plans charge.
The site offers discounts for multi-year subscriptions. You can buy a four-year membership for the Bundle for a one-time fee of $164.80, which works out to $41.20 per month. But keep in mind that the fees in your city will be different.
In some cities where they’re still building Angie’s List, consumers can join for free. Members who sign up during that early time period help Angie’s List get started in their city. Once the list is built, however, free members will be required to renew their membership on a fee basis.
The site reports that you can cancel membership at any time, and they offer a 110% money back guarantee if you’re not satisfied, but only on annual memberships.
What You Get for Your Money
The site offers access to the business reviews available, which can give the member some idea what they’re getting into when they do business with a new company. That might prevent you from a business that has a history of delivering less than satisfactory service or even of overcharging. The site claims to maintain reviews and ratings of “over 500 home repair and health care categories.”
But in addition to that basic service, Angie’s List also offers live support through its call center to “help if a project goes bad,” as well as access to their complaint resolution team, presumably in the event that you have an issue with a business.
Discounts are available for highly rated service companies (rated B or better), and the claim is that those discounts can be as high as 70%. A single significant discount on a high cost service can more than cover the annual membership fee, and anything above that can be money in your pocket.
Controls Are in Place
The company claims to have controls to prevent anonymous reviews or reviews provided by the businesses being reviewed. The payment of fees by members can help to keep these from happening, but the company also maintains staff to verify compliance, also known as the certified data collection process.
The site doesn’t change company grades earned by a company or professional, nor can the business pay to show up at the top of the list for searches.
How well Angie’s List works may depend on geography — if you’re in an area that has a high concentration of reviews, the benefits can be immediate. If it’s an area they’re new to, or don’t have strong participation in, it could be a disappointment.
How difficult would it be for a guy running a weekend business like painting and handyman services to get a few friends to sign up and post rave reviews? How can that possibly be policed?
The site admits that non-members can file reports on businesses, which can cast doubt on the integrity of the reviews. The company maintains that non-member reviews don’t figure into the grading system; however, their reviews will still show up on the site.
Now this is just me, but I have a basic issue with any type of website aggregators, not just Angie’s List. People consider good service to be “normal” and are less likely to plug a good business. Human nature is that people are more likely to file a report if they have a negative experience with a business or professional—it’s a form of revenge. A site could then have a disproportionate number of negative reviews, causing the member to pass on the use of some completely legitimate local businesses. Since reviews are voluntary, there’s nothing scientific about the ratings.
Ultimately, it may come down to how much faith you place in rating systems.
For $39 (annual fee in Atlanta), I suspect this service is probably worth the money. That’s not a lot of money to pay for access to so much information. One can make the point that you can get referrals from other people — family, friends, neighbors and coworkers — but we live in a world where people are increasingly isolated, so having a third party referral source has merit. And if the discounts are anything close to what the site claims, it could be the proverbial no-brainer.
Have you used Angie’s List? What was your experience? What would you recommend to others who are considering joining the service?