Summary of Angie’s List Case:

Evolution and Current Scenario of Angie’s List

 Angie’s is a customer rating information provider focused on the home repair and
maintenance market. It started in 1995 by Angela Hicks under the name Columbus
Neighbours” in Columbus, Ohio. In those days, the Service Providers had no website
or cell phones. Consumers could only refer to their Yellow Page Ads and record a
message on their home telephone machines.
 She used to go to every home and collect the information about feedback on service
providers. Slowly Company grew to 1500-member community within a year from
inception.
 Over time, the Company increased the categories of reviews provided and expanded
across various markets.
 By End of 2011, Angie’s list has 1 million Subscribers
 The case talks about different pricing strategies of Angie’s List and its competitors
over the years and some conjoint analysis to help decide future strategy.
 Company Uses Multi-tiered pricing paid subscription model, whereas the
competitors offer similar services for free, which led to the market share value of
Angie’s List. Market share dropped from 28$ in 2013 to 5$ in 2015.
 It works on the paid subscription model wherein the consumers have to pay $10,
$30, $60 depending on the plan they want to use.
 Competitors like Yelp & TripAdvisor give free access to Customer Reviews and
generate their revenues from Site Advertising & Service Provider Fees.
 The immediate Issue that Durchslag & Hicks need to pay attention to was to ensure a
long term strategic vision & marketing plan to achieve profitable growth.

Competition:
Below mentioned are the competitors of Angie’s List in various sectors:

Home Services: Home Advisor, Houzz, Porch, Amazon Home Services

Services Charges are through Advertising, Subscription, and commission.
Booking Services: Thumb Track, Task Rabbit
Service charges are through pay per bid and commission
General Review Services: Yelp, Google
Service Charges are through advertising.

 All the above competitors are providing free access to their consumers.

Conjoint Analysis Study:

 Performed to study the impact of the addition of a new free-pricing tier.
 Simulated the following 3 scenarios –
1. A base case in which no free tier was offered but a three-tiered model (similar to
current) with prices tier of $9.99, $29.99, and $79.99 and different service levels
were available
2. A free tier was added to the offering of the base case, making a four-tiered offering
3. A free tier replaced the $9.99 tier of the base case
Team reviewed the Website traffic and found that out of the 100 Million Users who
visited the website in 2015, 96% left without taking a subscription. Considering the 2015
revenue model, Angie’s List earned $67 Million in revenues from Memberships but a
whopping $276 Million by Service Provider Revenues.
Providing a free tier can increase the number of people using their site to get in touch
with the Service Providers, which may increase the Service Provider Revenues and
compensate for the loss in Membership Revenues.

But the challenges come in the form of explaining the new policy to the current set of
members and service providers. Since they are associated with more than 20 years of
functioning in a particular way, this major change should be carefully implemented. They
need to consider all the factors and then make a balanced long-term profitable plan and
present by March 2016.