Thursday, August 26, 2010

Angie's List - What a Waste.

NOTE: Since I wrote this posting, Angie's list has merged with another company and apparently changed its business model.  I offer no opinion on the "new" Angie's list, and this posting is really only relevant as an historical perspective and a commentary on "negative option" plans.

Is Angie's List a good site for reviews on local services? Well, you have to pay to find out!

The idea of an impartial review site on the Internet remains an unrealized dream, I'm afraid. Word-of-mouth remains the most powerful marketing tool out there.   If you can co-opt that, you could own the world. And many folks have tried, over the years, but found it hard to do. Like grassroots movements, you can't turn them into "AstroTurf" without people figuring it out.

In other words, you can't make a business out of word-of-mouth, just as you can't schedule spontaneity.

If you listen to NPR often enough, you will hear ads for Angie's List, a site that promises to provide impartial reviews of goods and services and service providers.  Sounds like a good idea, right? Maybe.

Unfortunately, such online review forums have met with a number of difficulties and they should be taken with a grain of salt.

Ripoffreports, for example, has been accused of shaking down businesses to get them to pay money to have embarrassing reports deleted.   I am not sure if this is true, but when I do read the site, I find it less than useful.  It is hard to tell whether the complaints are legitimate (some people are over the top) and the folks "defending" some odious businesspeople are clearly shills.   You have to read between the lines to find useful information - if any.

For example, truly crooked operations, like some of these Invention Brokers, might have a number of complaints on the site.   But then there are also "testimonials" which are obviously faked-up postings, which try to damage-control the negative comments.

You can sort of parse out what is going on, if you are Internet-savvy and astute. All it takes is simple logic - what is the motivation of the poster in making his comments? Laudatory comments are always suspect, unless the poster states a motivation. You have to read between the lines.

Other "complaints" are more along the lines of people doing stupid things and then blaming it on someone else. For example, one poster complained that FNC Insurance (which manages a bi-weekly payment scheme for Citibank Mortgage) was no good because the consumer let their balance go low in their bank account, causing the bi-weekly draw to bounce. The consumer then paid the mortgage payment directly, causing more checks to bounce when additional draws were deducted. They blame FNC for their troubles, when in fact, they just mis-managed their own finances.

It is like the "complaints" about Bank of America by disgruntled customers who find out that - horror of horrors - the bank will charge you an overdraft fee when you overdraft. Whose fault is that?

So you have to parse comments you see on complaint websites like ripoffreports, epinions, or the like. Negative comments by consumers who do something stupid should be ignored. Super-positive comments are also somewhat suspect. In other words, you have to THINK about what is being said, and make sure you are not being BAITED.

The second problem with some of these "consumer evaluation" sites is that a lot of them are faked-up.   If a company wants to sound legit, they put up a phony website that sounds like a consumer evaluation website, and put lots of laudatory remarks on it.  For example, the White Van Speaker Scam people put up fake websites that claim that their off-brand speakers are high quality.  If you can't read between the lines or know it is a fake, you might get taken in.

Angie's list takes a new tack.   They charge you money - and not an insubstantial amount - to join the website.  You can't see what kind of product you are buying in advance, so you are, in effect, buying a pig in a poke.

I was asked the other day, for a reference for car and also boat repairs.   I have had good luck with Twin Oaks Marine, in Union Springs, NY, and referred my friend to them.  I Googled their name to find contact information, and an Angie's list entry popped up.   I thought I would add a comment commending Twin Oaks, but you have to sign up first.  And you can't read the other comments (if they do indeed exist) without signing up.

I signed up with my full-time zip code and the website said "sorry, Angie's list doesn't exist in your area yet."  I tried my vacation home and got the same message. I finally tried a neighboring zip code, and that worked.

So there is the first thing that sucks about Angie's list.  Why does it matter what zip code I am in?   Cars have wheels.  People travel.   Most people travel through more than one zip code in a day.   Am I only allowed to comment on businesses or services within a 1-mile radius of my home?  If so, it is not much of a list.  Or do they want zip code information so they can market my demographic data?   Whatever the reason, it is pretty lame to require a zip code.

The second thing, is they want you to pay for the service. And pay a LOT:

Angie's List Monthly Membership Plan
$5.00 account activation applies


Angie's List Annual Membership Plan
$5.00 account activation applies

Save 36%

Save 42%

Save 46%

Save 49%

(Note that some folks have reported that membership costs vary depending on your location, which explains the whole "zip code" thing.  I guess people in New York City will pay more than folks in Buffalo.)

As I have noted before, many consumers, including myself, are succumbing to "subscription fatigue" and are tired of paying monthly or yearly fees for services.   Over time, these fees stack up, to the point where your credit card is carrying hundreds of dollars in fees every month.  So I tend to say "no" to new subscription fees, particularly when it is something I don't really need.

This blogsite also notes that some consumers are frustrated by the negative option credit card charge technique. As I have noted in the past, negative option payment plans are difficult to deal with, as companies (AOL being the most notorious) will continue to charge your card and when confronted, say "Whoops! My Bad!" or "Computer Error!" and then charge you again next month. You spend countless hours on the phone canceling such plans, only to be charged again.  Many people end up canceling credit cards to get the charges to stop.  Just say NO to negative option!

UPDATE:  Blogger allows me to see what keywords people are using to find this blog entry.  So far, at least a dozen are along the lines of 'How can I cancel Angie's List?' or 'Why does Angie's List keep charging me?' which would lend credence to claims that their negative option billing is problematic.  Save 'negative option' billing for important things in your life, like your utility bill.  If you insist on using 'negative option' for silly things like joining Angie's list, at least use a disposable credit card that you can 'charge up' with money and then toss, if they keep billing you and won't stop.  NEVER use your primary credit card, if you can help it!

Angie's List argues that by charging consumers to read the site and write reviews, they are more "impartial" than a site that takes advertising or allows anonymous posts. I disagree.

The problem with this model is that like any good porn site, you have to pay to get in, and once you get in, you may find you paid for bubkis.   At least on a porn site, they have "samples" of the wares for you to try out.

So, do I pay $6.30 to $37.00 just to find out if Angie's list has any good data?  I don't think so.  It is like one of those "mystery box" auctions - where they auction off a box of goods, but you don't know what is in it.  The auctioneer does, of course.  And often it is just a box of junk.

You really have no way of determining whether a complaint is from an actual consumer or from a competing businessman, signing in under his brother-in-law's name.  Similarly, laudatory comments could be from consumer - or from the contractor himself.   It is not hard to set up a dozen e-mail addresses on hotmail or yahoo or gmail (I have three, myself) and then shill for your own business.

And if you Google "Angies List Rip-off" or "Angies List Sucks" you'd be surprised at the number of complaints people have about the site.  Many compare it to the Better Business Bureau (BBB) which is an interesting analogy (and if you read my blog, you know how I feel about the BBB - worse than useless).  Apparently, according to some posts, the people who are being evaluated by Angies list can join as contractor members and also refute complaints. Some members report their complaints being deleted after a time.

I found this blogsite, which is interesting, in that several "disinterested consumers" defend the site (I smell shilling!). Turns out any contractor can pay $400 for an "enhanced listing" on the site. Very interesting. And as the blogger notes, there is no way they can police the site to prevent someone from writing a laudatory review of their own business.

What is scary about that blog entry and related entries, is how the same people kept jumping down his throat about it. I am skeptical these are "disinterested consumers" disputing his entries, but rather Angie's List employees shilling for the company. Who in their right mind spends endless hours defending someone else's company? Again, positive reviews are ALWAYS suspect.

I walked away from Angie's list for a number of reasons. First, they advertise the snot out of it on NPR. Heavy hype advertising usually means that something is not a good bargain. Those advertisements (whoops, "sponsorships" right?) are not free. Anything heavily advertised is not a bargain, period. eFax might advertise 10 times more than Maxemail, but not suprisingly, they charge 10 times as much for the same service? A rip-off? Perhaps not. A bad bargain? Certainly. Avoid companies that advertise a lot. There usually is a reason they need to.

Second, the entire concept of online evaluations, as I noted above, is flawed, regardless of whether you pay to get into the site or not. Free porn on the Internet is usually better than the paid-for kind, even though you may have to wade through a mountain of spam. (And by porn, I am using an Internet shorthand for any type of information focused in one area).

Third is the way Angie's list appears to be grooming their reputation online. You may recall my posting about Northwestern Mutual Life a few months back - and the reaction it got, almost immediately from NML. They troll the Internet, looking for comments about their company, and then try to do damage control. It is sort of like Hillary Clinton's campaign site, where Hill-bots patrolled the blogs there and deleted any comments that sounded even remotely like a criticism of Ms. Clinton. Chilling. Scary. Don't-Understand-The-Internet stupid.

(Grooming and Spamming posts are one reason I have deleted the comments section in this blog.  If you want to comment, create a blog of your own.)

Fourth, and most importantly, if I want word-of-mouth recommendations, I can get them locally from people I know and trust. While the users on Angie's list may not be anonymous, I still probably don't know them firsthand (or know if they are shills for the owner of the business, or the owner themselves). Word-of-mouth advertising is more than just a recommendation, it is a recommendation based on who is giving the advice.

So, for example, my neighbor asks me for a recommendation for a car repair place and for a boat repair place. He asks me not because I am just his neighbor, but because I studied Automotive Engineering at General Motors Institute, have owned dozens of cars, do all my own car work, am meticulous about cars, own four older BMWs, and also have had a number of boats, including, until recently, two fairly expensive Bayliners. My advice carries weight not only because I used the businesses in question, but also because I know good work from bad, know a good shop from bad, and know good pricing from bad.

Recommendations from clueless idiots, on the other hand, are probably not worth anything. So when I read hysterical remarks on Craigslist Rants and Raves about how some car repair place is a "ripoff", I take it with a grain of salt, largely because the content of the message reveals how the poster had no clue how a car works (much less the CAPS LOCK key), and had unrealistic expectations about the repair shop (do it for free, make it perfect, get it done by yesterday).

Word of mouth is not a common currency. Some comments are worth 10 or 100 times more than others. So just tallying up "positive" or "negative" comments is not a good indication of anything, really.  You can't create a "score" for a business just by counting comments - as if each were equal in value.

(In a way, this is like the evening news these days.  They provide equal time to "both sides" of an argument, even though one is asinine.  So logical thinking and angry rhetoric, or worse yet, lies, are all given an equal weight on the scale of reason.  In the same way, Angie's list totes up comments, positive and negative, without taking content into consideration.  It is like evaluating a person based on their credit score, and not their credit history, or evaluating someone on eBay based on their feedback score, without reading the feedback itself, the latter of which tells volumes).

So review sites may have some limited use, but inherently, they are flawed from the get-go. One that you pay for? No thanks. The idea that paying for access to the data makes it "better" is, in itself, flawed.

You can't make a business model from word-of-mouth. You can't co-opt it. It comes across as phony and fake. It's like those made-up boy-bands or faked-up rock-and-roll groups that record promoters assemble and hype. The Monkees were not the Beatles, even if they had a couple of hits.

There are some things the Internet just can't replicate or make a business model from. And word-of-mouth is one of them.

UPDATE:  March 1, 2011:   Many contractors point out since Angie's list charges for memberships, the only people motivated to provide reviews are those who want to write bad reviews. They also point out that Angie's list "suggests" that the contractor obtain "10 new members" to write good reviews to counteract the bad.  (Note: I updated this link as the original was taken down.   The comments in the link are the opinions of the poster, not myself).

So (according to this link) the contractor pays the Angie's list membership fee for 10 friends and has them write laudable reviews.....

Yea, it's called shilling.    You expect that on Craigslist or on a free site.  But the point of Angie's list was that since people are paying, it is supposed to be "better".

Perhaps not.

And once a week, I still continue to get 2-3 inquiries on Google for this blog entry - "How do I cancel Angie's List?"

Answer:  Cancel your credit card.

Angie's list - another service for hysterical housewives...

 Hey Angie!  This is what I think of your list!

UPDATE:   After years of losing money (but briefly making money in 2015), Angie's list decided at least in part to dump the "negative option" subscription model and at least let people read reviews for free (I am guessing you have to pay to post, however).   There are two problems with this new model:

1.  Except for shills, the only people motivated to pay to join and post a review are people who want to complain.  So positive reviews may become few and far between.

2.  Revenue is down as a result of this change, and the share price is in the tank.   Whether they can make money with this new model remains to be seen.

Frankly, given the historic losses over time, it is a wonder how they stay in business.  Perhaps they are hoping for a buyout from Facebook or something.

Whether the allegations that they are doing reputation blackmail are also troubling.  If they are indeed offering service providers means of sanitizing or diluting low ratings, it is troubling.