Angie's List reports profitable Q3, customer-care moves
Online ratings service, which had its third profitable quarter in a row, says it will guarantee a fair price and service quality.
Angie’s List on Wednesday announced two measures to guarantee its customers a fair price and quality of service and recorded its first profitable third quarter in company history.
The business, which garnered revenue of $87 million, promised consumers that if a service isn’t satisfactory, they either will make it good or reimburse them up to $100,000. It also pledged to pay customers the difference on goods purchased within 30 days if they find a better deal.
The move is designed to help Angie’s List compete with companies like Amazon. Angie’s list has struggled in recent years and its earnings, which include 7 percent growth from last year, are good news for the provider of online consumer reviews.
Until now, the company has been dependent on capital infusions from investors to stay afloat. It has yet to turn an annual profit since its founding in 1995, but its two prior quarters also ended in the black.
“We are pleased to report the first profitable third quarter in the history of Angie's List,” said Scott Durchslag, president and chief executive officer. “This was a quarter with stabilizing results. We are seeing good progress in key areas of our business, many of which are leading indicators for future results.”
The earnings, however, showed a 21 percent decrease in gross paid memberships. Membership fell from 1,035,814 to 818,775 during the past nine months when compared to last year.
Durchslag said the company’s pricing and quality guarantees hopefully will stimulate growth, but it is unclear how many members the move could generate for Angie’s List.
“This is the most requested item from our customers,” Durchslag said. “When we survey them and ask them what would make the biggest different for them in the home services they are looking purchase, they are worried about service quality and feeling like they get a fair price.”
Angie’s List defines a fair price as “one within the 75th percentile of prices available for the member’s local area for substantially similar services.” The pricing guarantee is immediately available to all Angie’s List members.
Only members who have purchased plus or premium memberships are eligible to take part in the service quality guarantee. Basic memberships are not available.
Angie’s list has faced an onslaught of competition in the digital age, and it is a precarious time for the firm and its 1,800 employees. It sued Amazon Local in June and claimed it stole provider lists and other proprietary information.
“We are so confident in our 20 years of experience and in the quality of the highly-rated service providers, that we have put together what we believe is the most compelling local home services guarantee in the industry,” Angie’s List Founder Angie Hicks said in a statement. “We want our members to know that they are getting reliable services at fair prices and that Angie’s List is willing to stand behind their purchases.”
The company's stock closed at $6.94, up 71 cents.
Call Star reporter Kris Turner at (317) 444-6047. Follow him on Twitter: @krisnturner.
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