Right now, Angie’s List is under fire and many small service companies have put her on their 'enemies list.' Poor Angie is getting bad feedback from subscribers, investors and businesses alike, for bad reviews from low-rated businesses, disappointing earnings, executive departures, and lawsuits alleging misleading practices. There’s also younger, hipper competition offering similar information for free.
Angie’s List wants users to think they’re consumer-driven, when in fact 70% of their revenue comes from advertising.
“It’s not advertising from Coca Cola, it’s advertising from the companies they rate,” Jeff Blyskal, a senior editor for Consumer Reports explained.
While companies do not pay to be listed on Angie’s List, companies can pay to appear higher up in the search results—which Blyskal believes compromises the validity of the Angie’s List sorting system.
“If you’re looking for a contractor, you’re only going to look at page one or two. That skews the ratings,” said Blyskal. “It’s about who advertises and I don’t think they’re being straight with the public on that.”
In a recent statement, Angie’s List founder and CMO Angie Hicks said, “Angie’s List is built on a foundation of fairness and transparency. Everything at Angie’s List starts with the consumers. The consumers give the reviews and assign grades. The companies’ A–F ratings are the average of the consumer reviews we receive. Companies that are A–B rated are eligible to advertise with Angie’s List, but they must offer a discount with that advertisement and if their grades fall below a B, we pull their advertising.”
Hicks also noted that the company puts itself through an outside audit in order to determine that the data-handling process is fair to all businesses listed on the site, and that these audits have “always found Angie’s List reviews a fair, impartial, trustworthy source.”
Angie’s List has been criticized for the fundamental contradiction between its mission statement which states, “Companies can’t pay to be on Angie’s List,” while in reality its top-rated businesses are allowed to advertise. Small business owners (like body shops) are crying foul, because they believe that if a company advertises with Angie’s List, their negative reviews will be removed. The company’s effort to keep advertisers happy reveals their conflict of interest, which is why subscribers and businesses are claiming that Angie is playing favorites.
Angel Iraola from Net Business Consulting & Solutions in Santa Rosa, CA has advised his clients in the past to use Angie’s List, because for many years it was better and more credible than Yelp, he claimed.
But no longer, Iraola said. “The A- and B-rated companies on Angie’s List can buy their way to the top of the default search results and that makes it patently unfair. My automotive repair clients are gravitating more now toward Yelp, because they’re not so blatant about giving special treatment to advertisers.”
One body shop owner (who chose to be anonymous fearing bad reviews from Angie) said the following: “It seems to me that just a few short years ago Angie’s TV commercial was completely different. She seemed to end each one with the statement ‘no company can pay to be on Angie’s list.’ But, now they’re forced to make money and advertising seems to be the way they’re doing it. I think ‘truth in advertising’ should pertain to everyone, especially those that claim complete transparency but don’t adhere to their own claims. Do we even know if Angie is the real owner or just a paid actor like Flo on the Progressive commercials? I’ve lost my faith in this site, so we don’t use it anymore and we took their link off our web site as a result.”
How can a body shop owner be certain that Angie’s List is on the up and up or playing games with your reviews? Iraola says do your due diligence and get everything in writing.
“Angie’s List is just like any other review site” Iraola said. “They need to make money somehow and at the beginning they were going to the customers to get it. But, how many people are going to pay $100 annually to find good, honest companies if they know that these companies are also paying for their positions on Angie’s List? That’s one of the biggest problems with Angie’s List. Are the top-rated companies really there because they do excellent work or are they there because they bought that spot? Once any review site loses its credibility and the end users doubt its validity, problems will follow. I hope Angie’s List can figure out a way to re-invent itself, so that my clients will want to get involved and the customers will believe in it again.”
When it comes to review-based sites, Iraola prefers Yelp to Angie’s List, especially for body shops.
“Yelp is more relevant and many shops still don’t like it, but in the end it’s their best way to go. I tell collision marketing people to manage your Yelp page and respond to every review, both positive and negative. Use it as a tool and stay on it, because if you let a bad review sit, it looks like it’s justified. And stay away from Angie’s List at least for now. They will undoubtedly re-invent itself to a certain degree very soon, because right now they’re losing traction.”
Curtis Nixon is the president of AutoBody-Review.com in Chino Hills, CA, a company that verifies every customer review by tapping into a database that confirms their identity and thereby gets true reviews for its body shop clients.
“The big problem with these review sites is that they do not contain verified reviews,” Nixon said. “We make sure that the customer doing the review indeed had their car repaired by the shop they’re reviewing. We elicit the reviews by doing a customer satisfaction survey and we’re finding out that about 25% of the customers are writing reviews on our site as a result. This way, both body shops and customers can rely on these reviews, because they’re real.”
AutoBody-Review.com charges its body shop clients a monthly fee and does not offer advertising to get any shop at the top of any list.
“Staying objective is crucial and that’s why our reviews carry weight. We never manipulate reviews or call customers to have them changed or delete any review, negative or positive. Our playing field is 100% level, so if a shop does good work, they get praised and vice versa. Selling ads for prime positions is definitely a clear conflict of interest and not the right way to do things, in my opinion. The customers should dictate position, not the almighty dollar and that’s why we will never sell ads to our body shop members—ever!”
In response to this article, a spokesperson from Angie’s List submitted the following list:
1.) We do not, have not and will not remove negative reviews in exchange for advertising.
2.) We’ve always been transparent about our advertising revenue stream and the process by which we ensure there’s no manipulation of grades.
3.) Everything at Angie’s List starts with grades, which are wholly controlled by our members. If companies can consistently earn high grades, they’re eligible to advertise as long as they can maintain that high level of service.
4.) Reviews are under the control of our members. In cases of complaint resolution, if companies resolve a dispute to the member’s satisfaction, we require the member to update the grade of the review to reflect that satisfaction level.
5.) Our mission statement: “Our mission is to help the best consumers find the best service providers and promote happy transactions.” Your reference is to an outdated tagline. Companies cannot and have never been able to “pay to be ON Angie’s List.” Being “on Angie’s List” simply means having your information listed. What’s important to Angie’s List members is the grade the company has earned for its service performance. Grades are controlled by members.
6.) Regarding verification of reviews, the Angie’s List accountability process starts with a ban on anonymous reviews (We have never and won’t allow them) and a requirement that our members give us their honest assessment of their own experience. It included proprietary technological checks, human review, free-of-charge monitoring and response from service companies and an annual outside audit.
7.) We currently have more than 2.8 million members and membership starts at $9.99 a year, or a fraction of that for monthly memberships.
8.) Lastly, both our reviews and Angie are real. Her name is Angie Hicks. She and Bill Oesterle co-founded Angie’s List in 1995 in suburban Ohio. She is our CMO.