Angie Hicks is pleased to note that new categories get created all the time on the eponymous website Angie’s List, where consumers go to find reliable and recommended local service professionals in fields from home improvement to health care. In fact, she lists one category that is particularly representative.
“There are categories today where services didn’t even used to exist,” she says. “ Angie’s List earlier this year tallied its 2 millionth household subscription, which was secured 18 months after the 1 million mark was reached. In contrast, it took 16 years for the first million to sign up.
But that is only the tip of the iceberg that’s one of the biggest consumer website success stories. Revenues for fiscal year 2012 were up 73 percent to $155.8 million. More than 1,000 are employed at the company’s headquarters in Indianapolis.
While that may be impressive itself, Angie’s List earlier this year tallied its 2 millionth household subscription, which was secured 18 months after the 1 million mark was reached. In contrast, it took 16 years for the first million to sign up.
Hicks, who punctuates her upbeat conversations with “Exactly!” “Absolutely!” “Yup!” and “Right!” is more than the face of the company’s television commercials. As well as the founder, she is the chief marketing officer with an MBA from Harvard University and a bachelor’s degree in economics from DePauw University.
She spoke with Smart Business about the success of Angie’s List, and how an emphasis on quality makes the service stand above other business reviewing services.
Q: What was the motivation for founding Angie’s List?
A: We [she and CEO Bill Oesterle] started 18 years ago in Columbus, Ohio, and it came out of when Bill was trying to renovate an old house and was having trouble with a service company. He was familiar with a referral business that had been around in Indianapolis that he had used and started looking around and realized it was unique just to Indianapolis. So we started our own version of that company, and then about a year later I ended up buying Unified Neighbors, the Indianapolis company.
We named it Columbus Neighbors at first, which was kind of our spinoff of Unified Neighbors, but what we realized over time was that people just didn’t realize that the list was dynamic. This was pre-Internet days so we were a call-in service in our magazine. We decided to rename it. It was going to be named after one of our friends’ mother named Jackie who just knew everybody in town and everything in town. So in many ways, she kind of represented what we were attempting to do.
Then at the last minute, Angie’s List was suggested. Bill was a big proponent for it. ‘OK, she is the only employee,’ he said. ‘It certainly makes the story easier.’ Women today control the home checkbook, so it makes sense that it had a female name.
Q: Has your brand goal evolved over the years?
A: Our brand goal has always been the same — to help consumers find top rated local service providers and especially in the high cost of failure services. For example, going out to dinner, they could undo my dinner. It’s not a big expense. It’s not impacting me as much as if I hire plumbers and they do work wrong; it floods my kitchen and I am out time and effort.
So were really focused on those. We started in the home improvement categories; we expanded into auto repair, pet care, lawn care, and most recently the health care industry. So far we have opted not to review attorneys, but it is something that gets talked about. I mean it would work just like any of the other reviews in that kind of situation. There is certainly opportunity.
Q: You recently made TV commercials and the exposure has been successful, even playing a part in reaching the 2 million subscriber mark this spring. Can you describe your marketing strategy?
A: It wasn’t until we introduced our current ad creative that it really changed. I have only been in the TV commercials for the last couple of years or so. Before that, I would do media and things like that. But it’s certainly different now that we have the TV commercials running.
Public relations was always a part of our marketing mix. We started as local marketers. We would open our offices city by city. We usually received good PR in the market as we were opening. It always was a great boost. There would be an article in the daily paper or a TV opportunity. Those were always important for us.
Then it was about probably 2005 or 2006 when we had enough markets open that it made economic sense for us to start advertising nationally versus locally. You obviously get some scale when you do that. We were looking for an alternative to the daily newspapers, so cable television became the vehicle that we tried and have been successful with. So that was the switch. Our marketing mix includes television, radio, online and some print. It’s working well.
Q: Angie’s List promotes its reviews as high quality. Explain your thinking on that. Isn’t that hard to ensure?
A: I think the big differentiator at Angie’s List is the focus on the quality of the reviews. We do not accept anonymous reviews. So you are known to Angie’s List as well as the company you are reviewing. I think there should be accountability in what you say because people are using this information to make important decisions.
Obviously we have members who are driving the reviews that drive the ratings for the companies, so based on the fact that we have a deep relationship with them because they are members, there are also plenty of ways that we can run algorithms against the data to make sure we’ve got high quality reviews. If ever a review gets tripped in that process, we actually have a team of people that will look at that review.
One of the most common complaints we get is that service companies don’t return phone calls. That is something that we see as an opportunity to make it better.
A consumer can give a review in a scenario like that. Since there wasn’t work done it’s not weighted as heavy as when work is actually done so if they just come and mess up the plumbing work it is different from should they not return your phone call.
But it is still important as customer service feedback so the company can be alerted to that information. They are welcome to respond to the concern and make improvements to their business, based on that.
Their rating is an average of the reports of the reviews they receive, so each report counts — just like a school report card. There is an A through F scale, and the search request is also returned based on the grade.
Q: Are there ever any fraudulent reviews?
A: Every once in a while we will find one. We will find a company that tried to report on itself. There is a cost for that. A, we are very good at finding it when that happens because of our system. B, the cost is that we will stop returning the company in searches. If they are a plumber, we will stop returning them in searches for plumbers. That can be very costly because it is not unusual for us to drive a large portion of a company’s business. A company never leaves the list. So if people look for the company by name, they could see it but, if somebody just searched for ‘Angie’s List I need a plumber,’ the name won’t show up.
Q: How do you keep your employees motivated and on the same page to carry out of the brand promise of Angie’s List?
A: We spend a lot of time focused on culture. I am a firm believer that good culture doesn’t just happen; you have to cultivate it. We empower our employees to do what is right to help the consumers and focus on core ideas. Take your work very seriously; don’t take yourself too seriously. Be honest. Be frugal. It is just those basic things. It’s both by talking about it and also leading by example that creates that kind of culture.
Q: What do you foresee on the horizon? What are you working on in your R&D department?
A: There are a couple of things. One is continuing to expand our member base, making sure that consumers are finding the best companies they can, but we are also spending time thinking about ways that we can help improve the interaction between consumers and service companies: ‘Here is the company that I want to call or want to get in contact with. How can Angie’s List help facilitate that communications cycle?’ Getting a quote, getting it scheduled, that whole process. So we are spending a lot of time thinking about the real opportunities there.
How to reach: Angie’s List, (888) 888-5478 or www.angieslist.com
The Hicks File
Founder and chief marketing officer
Born: Ft. Wayne, Ind.
Family: Mother of three children and lives with her husband in Fishers, Ind.
Education: Bachelor’s degree in economics from DePauw University, in Greencastle, Ind., which named her a 2007 Distinguished Alumni for Management and Entrepreneurship. Master’s degree in business administration from Harvard Business School.
Awards: In addition to the distinguished alumni award from DePauw University, she was named a Torchbearer Award winner in March 2009 by the Indiana Commission for Women in recognition of her entrepreneurial accomplishments and for providing a positive example of the influence women have on their community and the state of Indiana.
She is nationally known as a consumer expert. She has raised awareness to attempts to gag consumers from freely discussing customer service experiences; pitfalls in the real estate industry; and home improvement safety. Hicks has issued calls for action in several areas, including health problems caused by lead paint, radon and mold. She is also an advocate for accountability and fairness in the consumer ratings and reviews niche.
She currently serves on the DePauw University Board of Visitors. Hicks also is a co-founder and past member of the Board of Directors of The Governor Bob Orr Indiana Entrepreneurial Fellowship Program, which provides a two-year fellowship at an Indianapolis-area business to graduates of Indiana colleges and universities or Indiana residents.
On her competition:
There are certainly online players, but I always remind people that if you add up all the online players, it is still very small to the total service industry. We follow a very old-fashioned way of doing things — you literally just ask your neighbors, you ask your coworkers, things like that. We collect about 65,000 consumer reviews each month covering more than 550 home and health services.