Referral Services – Are they Necessary and for You?

So your customers need your services yet they don’t know about you (yet). How do they find out? They might start by asking trusted friends, neighbors and family in the area, either in-person, via social media, or mobile, for starters. If that proves to be unsuccessful, it’s likely they will turn to reviews and comments from similar-minded consumers, online.

There are a few popular online services that most customers will gravitate towards first, primarily due to their extensive marketing and reputation. These are Angie’s List, Service Magic and Yelp. Following are some descriptions of each including advantages and disadvantages for using them as a business. (I am interested in getting your feedback if you’ve used any of these services so please feel free to send along comments to abiasismartmarketingllccom)

Angie’s List

Angie’s List is a site that offers user-based rankings and reviews of service professionals in local areas. The company was launched by Angie Hicks in 1995 when a friend of hers moved yet had a difficult time finding reliable contractors. Now the service covers the entire nation with members that share their experiences with others so that good and fast decisions are made saving the buyer time and money.

There is a price of admission for members (consumers): Plans start at $3.25 per month for one list plus a $5 startup fee. A yearly plan of $29 is also available. The fee provides access to over 550 service categories from housecleaners to contractors to child-care providers and even healthcare providers. A member gets access to their hometown location including the professionals, their user reviews (based on price, quality, responsiveness, punctuality, and professionalism) and letter grades (A – F), Angie’s List customer service, and several other resources on the site. This service has roughly 1 million members, who post about 40,000 “unedited, and non-anonymous” reports each month. The site stresses accountability as members and companies can interact and address issues as they arise sometimes fixing any problematic complaints with the service professional immediately.

As a business, registering for Angie’s List and managing your content is free. They do allow companies and professionals that average an A or B rating to advertise in the form of a discount to members, which can help boost traction. Businesses can also purchase an enhanced listing (Google model) for up to $400.

One drawback is Angie’s List’s localized member listing. For example, if someone lives in Ohio yet has a vacation home in Florida, they will require two memberships to view Angie’s List in both locations. This can be a severe damper for service professionals in seasonal areas.

Service Magic

Service Magic matches professionals and customers based on the assignment. According to their website, here’s how it works: Consumers visit the Service Magic website (www.servicemagic.com) and complete a free service request form, answering a series of specific questions, such as job type, scope and location, to ensure the appropriate professionals are approached with the right request. The company uses its proprietary technology to instantly route the request to service members who have indicated an interest in leads in that specific area and field of work. The requests and consumer’s contact information are sent immediately to 3-4 Service Magic members via email, cell-text messaging, phone, pager or fax so they can contact the consumer directly to discuss the requested project. At the same time, consumers are sent the service professionals’ profile information, contact information, past Customer Ratings & Reviews and a link to each professional’s Website.

The company says that each professional on the site has gone through a background check, in which Service Magic searches for criminal records, bankruptcy issues, bad reviews, sex offenses, and cases of malpractice. If the contractor fails in one of those categories, then it will not be featured on the Service Magic site. More than 7000 service companies were turned down in 2010 due to their failure to pass the general background check, according to Brooke Gabbert, director of public relations and social media for Service Magic.

How does Service Magic make its money? Service professionals pay a one-time $99 enrollment fee to participate (not annual). In addition, Service Magic requires service professionals pay a fee of $5 – $55 for each lead they receive. The number of leads can be specified in advance to manage the flow and match the service professional’s capacity to respond.

Yelp

Founded in 2004, Yelp is popular site where users can find and talk about (post reviews) on just about any local business, from restaurants, clothing stores, car dealerships, to home service and other professionals alike. Events and lists are also included. Yelp boasts over 66M unique monthly visitors and over 25M local reviews.

Unlike Angie’s List, Yelp is completely free for the consumer/member. Users must create a profile before posting a review, but at no cost. Reading reviews is also free, and consumers do not have to set up a profile to read reviews. Customers rank businesses, and assign the companies a star rating from 1 (the worst) to 5 (the best). Currently Yelp boasts more than 20 million user reviews. The service tries to prevent bogus postings with their review filter.

Yelp makes its money by selling advertising to businesses. With this, business owners can offer a special deal or discount on Yelp to customers (Angie’s List has adopted a similar advertising offer). Advertisers who pay can never change or re-order a listing or review, according to the site. Yelp Local business advertising packages typically range from $300 to $1,000 per month, depending on how aggressively that business wants to attract customers. Each package includes a dashboard to track results in the program.

Which Service is Best Suited for You?

Where none are perfect, each of these three services offers specific benefits to support sales within your area(s) of expertise. Each appeals to different customers and their needs. It’s likely to think that leads generated from Angie’s List are more qualified as customers pay a fee and their customer service and feedback are extensive. On the other hand, Service Magic’s background checks likely attract another set of qualify buyers yet the service’s competitive bidding may mean that customers go with the lowest priced alternative or the one that is most immediately accessible. Lastly, since Yelp is completely free and customer run, and service providers do not go through any background check (and can create multiple profiles to skew the results), the quality of leads can be relative, yet the return greater than the other two.

In summary, since online referral services are formiddable outlets for generating qualified leads, they should be seriously considered as part of your marketing and sales mix if you’re a service professional. Test them out to see which is best for you and your business.

Sources

Yamshon, Leah, “Angie’s List: Is the Service Site Worth Its Membership Fee?” PC World, Sept 5, 2011.

About the Author

Angelo Biasi is General Manager of SMART Marketing Solutions, LLC, a leading full-service integrated marketing company in Florida and New York since 2001. He has helped create and execute marketing plans and integrated marketing solutions for companies such as Playtex, Bic, Rogaine, Tauck, and over 35 colleges and universities, to name a few. Angelo has an MBA in Marketing from the University of Connecticut and teaches Marketing at New York University where he has for over six years. He has been quoted and/or featured in USA Today, Mobile Marketer magazine, Mobile Commerce Daily, Luxury Marketing magazine, BNET TV and Business Currents magazine, to name a few. For more information or to learn more, email him at abiasismartmarketingllccom  (abiasismartmarketingllccom)  , visit www.smartmarketingllc.com, call him at 239.963.9396 and follow him on Twitter @angbiasi.