The following post is actually a comment that was left on my old blog in response to a post called “Angies List Ratings Given High Marks by Auditor.” The comment was made by a tech-savvy local plumber in Seattle. I have not edited in any way; it’s reproduced verbatim.
He comments primarily on his experience with Angie’s List but also about Google and the cost of a click for the keyword “plumber” or “plumbing” in Seattle. The discussion of Angie’s List from the point of view of an advertiser is very interesting:
I have years of experience with Angie’s List as a local plumber in Seattle. They have gotten money out of me and gave nothing in return except much trouble from customers that tend to be pretty passive aggressive. Angie’s List get paid on both ends – Any contractor listing you see is only visible to you if the contractor is paying Angie’s List through the nose. My cost for Angie’s List “hot leads” was $300 each. Testing Angie’s List cost me $7000 over two years. While paying such high costs for leads may work for a major construction project , it won’t work for a service call where we charge by the 1/4 hour.
Google clicks have gotten as high as $38 per click here in Seattle when the search term used is “plumber” or “plumbing”. On the average it takes 15 clicks to get a call. Do the math on the cost to the guy ringing your doorbell.
Angie’s List cost per job performed was 75% of my company’s average invoice total (about $400). My company does over a thousand jobs a year.
Any homeowner service using this advertising method is paying way too much to maintain any integrity in the service. This type of advertising creating an incredible amount of pressure to convert to a commission-based high profit business model for basic traditional services. If I pay Angies List hundreds of dollars just to ring your doorbell how can I treat you fairly when your plumbing problem requires an hours work? I can’t so I cancelled my advertising contract with Angies List.
Angie’s List uses a unique money making model that actually is a kind of pyramid scheme. They put all the local harvested contractors into their listings but you only will call highly rated ones. In order to be highly rated you must pay Angie Thousands of dollars a year for position in order to be seen AND time in grade is required to accumulate favorable reviews. Only a dozen or so can be in that position. The homeowner only calls the ones at the top so all new advertisers must invest thousands on continuing annual contracts to play the game on Angie’s List.
My solution was to put up a free local business directory with the policy of no shills, no fake listings, no paid advertising just so my neighbors and the local small businesses here in Seattle could find each other. (www.SeattleOnly.com) It may take a while for the new directory to get any real traffic as it is dependent upon local participation by local businesses and consumers.
In my opinion, it is time for both local business and consumers to get control over how we find our services and customers as the marketers are hijacking the business to consumer relationship and forcing costs so high that nobody can bear the costs.
Question: Why should we need out-of-state corporations to connect homeowners to services down the street? Surely there is a simple, inexpensive way for us to know our neighbors and small businesses. We all need to put a little thought and effort in that direction.