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    Blog: The Rise and Fall of Angie’s List

    Storm Group Roofing is a full-service contractor specializing in full-service repairs as well as new exterior projects. At Storm Group Roofing, we take great pride in our staff to ensure great customer service and responsiveness to your needs.

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    The Rise and Fall of Angie’s List

    Angie’s List used to be service-based, intent on providing unparalleled customer service. The formula worked wonderfully, connect top-rated contractors with top-rated homeowners.

    Angie’s List was founded in 1995 by Angie Hicks and her business partner William Seelye Oesterle. Hicks produced this system because she wanted to develop a way for customers to be able to find reliable construction contractors.

    She implemented a ratings system, using data she collected by going door-to-door in different neighborhoods, asking people which companies they felt offered the best services.

    In 1999, as the internet soared in popularity, Hicks took all the data she collected from years of research and published it on her website.

    For over fifteen years, Angie’s List became the go-to destination for people searching for reliable contractors, peaking in August of 2016 when the website had over 3.2 million paying members.

    Yet, just three short years later, Angie’s List has begun to plummet. What happened to this once giant staple in the construction business? In this blog, Storm Group Roofing explains how Angie’s List has lost its reputation, one that for so long seemed impenetrable.

    What happened to Angie’s List? Where are they today?

    Here at Storm Group Roofing we would argue that Angie’s List was the best service to connect contractors and homeowners that has ever been on the market. On May 2, 2017, IAC, a powerful media company based in New York City, announced that it had purchased Angie’s List to the tune of $500 million. IAC had ambitions to change the structure of Angie’s List.

    Unfortunately, now that Angie’s List is owned by IAC, who also owns HomeAdvisor, we would argue that HomeAdvisor is absolutely the worst platform to connect homeowners and contractors.

    The demise of Angie’s List didn’t happen overnight. Before 2015, the company had been relying on capital infusions from investors, and for eighteen years the company never recorded a profit in their annual income reports. Something had to give.

    So, what happened? How did the worst company in business buy the best company in business?

    Angie’s List has been struggling for years, as a matter of fact for 18 years Angie’s List has been depending on cash infusions from investors. They were simply not profitable and only turned a profit right before they sold to HomeAdvisor.

    Angie’s List was a search engine. Think of Angie’s List as a Google for contractors. On the other hand, HomeAdvisor has always been in the lead generation business. A completely different business model. Angie’s list was focusing on quality where HomeAdvisor has always focused on quantity.

    Angie’s list was service based. HomeAdvisor is based on selling information. Angie’s List was connecting top rated contractors with top rated homeowners. Angie’s List worked because contractors were not competing with other contractors, they were competing for the attention of homeowners. Competition based on their reviews, based on how many offers they received through Angie’s List. It was good for business.

    A lot of people in the business from those early years 2010 through 2012 said that 80% to 90% of their business was coming from Angie’s List because the search engine was so powerfully relevant to the contractor. Reviews were really good and reliable, contractors were trustworthy, they were the best of the best. Bottomline, the best contractors would compete with the top 10-15 contractors in town. Angie’s List built the platform that was connecting homeowners with the top contractors. The contractors who made to the first page of Angie’s List did very well.

    Instead of Angie’s List prioritizing customer service, it is geared toward finding as many homeowners as possible, and then selling the prospective customers’ information to contractors.

    HomeAdvisor is all about who is willing to pay. You can start a company today and tomorrow you can start buying leads. So, your information if you’re the homeowner would be compromised. With HomeAdvisor they pretty much start selling information right away and it doesn’t matter how good the contractor is or how many reviews they have, they promise to connect you with the best. In reality they are connecting you only with the people who are willing to pay for the service.

    Angie’s List never turned a profit through their 18 years of business. They kept struggling, their stock kept struggling. On May 02, 2017 IAC Interactive Corp owner of HomeAdvisor announced that it had agreed to acquire Angie’s List for five hundred million dollars.

    Angie’s List was service based, it was connecting top-rated contractors with top-rated homeowners. Under the umbrella of IAC, Home Advisor’s acquisition of Angie’s List was simple, capitalize on the contractors and customers Angie’s List already had in place. HomeAdvisor is selling information to any contractor but mostly startups who are struggling to find jobs. The HomeAdvisor business model is very simple, find more homeowners to sell to more contractors. That’s why HomeAdvisor really needed to buy Angie’s List because they just became a huge competitor with way too many contractors who believed in it.

    HomeAdvisor acquiring Angie’s List was a no brainer. They wanted both homeowners and contractors that’s what they were after. They start making changes right away. It’s getting much harder to see contractors on Angie’s List. So pretty much if you’re a homeowner and you come to Angie’s List today you will be redirected to HomeAdvisor contractors and your information is going to be sold to them. So, you’re no longer using the search of Angie’s List. In some scenarios it is still possible but it’s way harder to actually get down to it because they’re building walls to protect those contractors because HomeAdvisor wants to make money. If a homeowner has a request for a job HomeAdvisor will trick you to connect you with a HomeAdvisor contractor and sell your information to them.

    HomeAdvisor does not want you to use Angie’s List as a search engine for top contractors. They don’t want you to see the actual list of top-rated contractors. They want to sell your information to people who are willing to buy it. And those people are not always the top rated. The way it works, if a contractor wants to buy leads that day and if you come in that day, it doesn’t matter who the contractor is, if he’s buying lists he’s buying leads and HomeAdvisor is going to sell it so that’s how it works today.

    Despite promises of keeping the Angie’s List model as it was, HomeAdvisor now sells customer information to HomeAdvisor contractors. Because of this discrepancy in honesty and policy, Angie’s List today does not get their old contractor renewals because a lot of companies all dropped out within the last two years.

    So, today Angie’s List lost a lot of good contractors, probably 80% of paying contractors. Because contractors are no longer willing to pay Angie’s List to promote their business because they don’t get leads from Angie’s List anymore. Those leads are being sold to HomeAdvisor contractors and pretty much HomeAdvisor has ruined Angie’s List. This means that high-end homeowners who loved the quality of Angie’s List are now being bombarded with inquiries from contractors with little to zero reputation, creating an environment that is not beneficial to either party.

    So, what’s the conclusion?

    The only way HomeAdvisor can keep growing is if it keeps buying platforms. Just recently they purchased Nextdoor app. Nextdoor was an amazing app where a lot of people were finding good contractors. But now, just like Angie’s List, it’s the same thing HomeAdvisor has been doing for years. So instead of a changed business model to monitor contractors they pretty much keep making money and not in a very ethical way. Nobody recommends them, turnover is huge inside the company and outside the company contractors don’t recommend them and nobody wants to be part of the network. Maybe we’ll get another player similar to Angie’s List who will be bold enough to compete with them. Amazon is doing a lot of things in the right direction now. Somebody like Amazon can put a stop to the current model of corruption, it’s only the beginning of the end.

    The bottom line is that under the new ownership, Angie’s List has been compromised. Angie’s List has turned into a company whose reputation loses credibility each time a frustrated homeowner is put in contact with an unreliable contractor. Today, the once proud contractors of Angie’s List? The ones who made the website what it was? They too are left wondering, “what happened?”

    Let me know what you guys think in comments below. I would like to invite you to take the public survey. If you’re a contractor and you did do business with Angie’s List and maybe you don’t do it anymore, or maybe you still stick with it, let us know in comments below we would like to hear from you or go to our Facebook page and share your story and we will send you a free t-shirt. Thank You, Storm Group Roofing Team.

    Dmitry Lipinskiy
    Host of Roofing Insights YouTube channel CEO of Storm Group Roofing Founder of Roofing Business School

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    1. Thank you for opening our eyes about Angie’s list. We have used it before since we are home owners and needed someone reliable. We did find and hired someone that way. Then, by mistake Home Advisor was used for our next project. What a headache that was. Not only were we given contractors that WERE NOT in our area. Many were not licensed, nor wanted to do the job. Plus, we had to change our email due to them selling our email address to SPAM senders.

      • I was a Home Advisor Contractor, and came across some pretty good customers. I was tired of paying for free estimates that never materialized. I began to refer new customers to my old customers and built a “Word Of Mouth” business.

        • When you say “I began to refer new customers to my old customers…” what do you mean by that Anthony? You went with the old school way of providing references?

    2. Excellent review. Thank you. I used to use Angie’s list in the past. Now it has been destroyed. I tried using it the other day and it is totally shady and a crap service. I now have to go to my friends for recommendations. Really upset with Angie Hicks for letting this happen to her company.

    3. I got to hand it to Angie HIcks and Bill Oesterle. They walked away multi-millionaires on a company they ran for nearly 20 years without ever turning a profit. It was never a good business model and the shady things they were doing was reflected in the several lawsuits against the company.

    4. I am in the Commercial Insurance business and had many conversations with Contractors, They were not fans of Homeadvisor. They would promise leads for a Fee, but never really materialized because of the Undercutting of Price for Project hence leading to unhappy homeowners, Shoddy Workmanship. .

    5. I never liked homeadvisor and it was obvious from the first time I used them that they just took your info and immediately sold it to everyone, I had the sketchiest “contractors” showing up to give me bogus quotes whereas angies list provided a list for me to look for, they also had contractors offering essentially flat fees for services, such as furnace installations etc which made it easy for budgeting/quotes. I really miss angies list. HomeAdvisor is the worst and I knew they were going to ruin angies list once they bought them.

    6. Unfortunately they oftentimes match me with “Angi Pros” that have no reviews and they decide to cancel on the job. Not happy at all with Angi now.

    7. As a homeowner, I used to use Angie’s List a lot. I could browse through lists of contractors near me, I could read reviews, I could read what the contractors wrote about themselves and their services. And if I felt like it, I could solicit estimates & proposals from specific contractors — NOT random ones! When I first went into the “Angi” website, I was terribly disappointed. What had happened to my favorite resource? I’m forced to go through the process of describing a project, and then submit it for proposals from contractors I have no chance to review or select ahead of time. I miss the old Angie’s List. This new model just doesn’t work for me. I’m going back to general internet searching when I need work done around the house.

    8. What you’ve described here is verbatim what I’ve been experiencing and trying to figure out for the last year plus. Wow. We’ve been with Angie’s List since 2009 having over 400 reviews and a 4.8 star rating. I the last 2 years or so the leads have become what I’ve described as the bottom of the barrel or the leftovers. We recently threw another $200 a month at Angi to see if it was just a needing more leads problem, but that has not really helped much at all, just more crappy leads for me to sift through.

      Angi is the only place we have ever advertised in the 17 years we’ve been in business, so we are faced with considering what direction do we want to put our efforts into re-establishing our online profile and source for leads. Google Local Services was suggested to me today along with marketing to our 2400+ clients we’ve done work for or at least provided a quote to over the years.

      Any suggestions of what others are doing as Angi becomes worse and worse, as an alternative, would be very much appreciated.

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