ReachLocal’s Audacious ClubLocal Expands to San Francisco Market

ClubLocal logo ReachLocal’s home services business unit ClubLocal is formally expanding into its second market: San Francisco. Its first market was Dallas. More cities are “coming soon.” (I wrote about ClubLocal originally in March.)

ClubLocal effectively competes with a variety of home services directory and consumer review sites: Yelp, Angie’s List, HomeAdvisor, yellow pages, etc. It’s not a “lead-gen” site for SMBs however. It’s intended to be a consumer brand that replaces review sites and directories for the categories it serves.

ClubLocal is an e-services marketplace that offers a value proposition for the consumer (convenience, simplicity, trust) but also the SMB service businesses that fulfill ClubLocal appointments. ReachLocal is providing ClubLocal merchants with a sophisticated SaaS-ERP platform (“ReachCommerce“) and doing TV and online advertising (on behalf of the ClubLocal brand). The larger promise is a regular flow of new business as well as greater operational efficiency.

For the merchant it’s effectively like being part of a national franchise without being a franchisee.

The consumer doesn’t book directly with the merchant. She books with ClubLocal and one of its roster of “A-list” service professionals fulfills the request. ClubLocal aims to address more than 20 home-services categories. In the SF Bay Area it will initially offer “Plumbing, Handyman, Electrical, Heating and Air Conditioning, Appliance Repair and Mobile Auto Detailing.”

There’s a $100 credit being offered as a consumer incentive to try it out.

ClubLocal home page

ReachLocal identifies what it thinks are the best service providers in a given city and for a given category — they generally must have been established for a minimum of five years and have a clear track record — and invites them to be a part of ClubLocal. It does background checks and other due diligence on each of the firms involved. Then it negotiates “wholesale prices” that are generally below what these service providers would charge consumers directly.

ReachLocal CEO Zorik Gordon told me that the aim is to have consumer ClubLocal pricing be at or slightly below prevailing market rates. The broader objective is to provide a superior buying and service experience for the consumer. If it succeeds ClubLocal would become a trusted consumer brand and minimize or entirely eliminate the need to do “research” or seek referrals before booking.

Despite all the online information and reviews it’s still often difficult to find “qualified” SMBs and then to get them to respond. For example, I’m currently having this problem in three categories: plumbing, landscaping and window repair. I’ve sent emails and left voice-mail messages for a number of SMBs, who have simply neglected to respond or follow up.

With ClubLocal the idea is that consumers don’t exchange emails or voice mails with SMBs. Instead they simply book appointments online in desired categories (and pay online). Each of the service professionals are equipped with iPads and consumer feedback/reviews are solicited by ClubLocal after the job is completed. Gordon said that about half of consumers write reviews and the overwhelming majority of ClubLocal businesses get a “4 or 5 star rating.”

ClubLocal appointment

ClubLocal offers a 100% satisfaction guarantee. If ratings begin to fall for any individual service professional or entity on the ClubLocal roster that individual or business will be removed. Gordon says this has already been done in a few cases.

ReachLocal sees ClubLocal as consistent with the future of local commerce — the “retailing of local services” — which includes online booking, payments and CRM. Indeed, I’ve been talking about this in the context of deeper integration of vendors and technology platforms in the daily business operations of local merchants — vs. simply providing marketing leads (clicks, calls, impressions).

Not all is rainbows and unicorns: it’s going to be very challenging to build a consumer brand and get consumers to think of ClubLocal as their top-of-mind source for local service professionals. However the simplicity of general proposition is appealing in the abstract.

Gordon understands and sees ClubLocal as a long-term initiative, however. He told me, “It’s going to take a lot of money and a lot of time. We’re building an Amazon-like brand in e-services.”

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2 Responses to “ReachLocal’s Audacious ClubLocal Expands to San Francisco Market”

  1. Neal says at

    Club local will probably work better in markets where supply exceeds demand. That is probably not true these days in the Bay Area where a hot technology market is driving up home values and the market for services is very roubust. Why would a plumber who is getting lots of calls and can’t even keep up with word of mouth demand choose to join club local. Perhaps this will really work well in markets where the demand for services is not nearly as brisk as it is here in the Bay Area. 

  2. Greg Sterling says at

    The “mitigating factor” is that in markets like the Bay Area people may be more interested in consumer experiences like what ClubLocal offers. In addition the problem of finding “good people” still exists. Then there’s the return your call problem (which is worse where there’s lots of demand). So in that sense you may be right that it might be more challenging to get “good people” to sign up for this type of service when they’ve got a steady stream of clients.

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