Personal Finance in Your 20s and 30s: Online Resources to Find Service Providers

By Eric Tyson

Finding quality, affordable professional service providers can be a challenge. As can finding the myriad other service providers you may seek, such as an auto repair shop or a plumber. All of us have the battle scars from the school of hard knocks and making bad hiring decisions.

Getting referrals from folks you know often doesn’t pan out — and for good reason. Just because your friend or neighbor has had good experiences with a given contractor doesn’t mean you will or that you value the same things in a provider.

The Internet has long held the promise of being an information source and exchange for consumers interested in hearing the straight scoop about service providers, but message boards rarely have a critical mass of comments about locally focused companies. Firms such as Kudzu, which is owned by media conglomerate Cox Enterprises, provides consumers free reviews on companies, but here’s a case where you may well get less than you paid for. Anyone can complete a simple registration by providing an email address, name, and zip code, and many service providers have just one or a few reviews. Due to the anonymity of the reviews and lack of screening, company owners, employees, and friends can easily post puffed-up reviews while competitors can easily criticize their peers.

After reviewing numerous websites that purport to help consumers separate the best service providers from the rest, the sections that follow highlight those that I’ve found are doing the best job.

On some ratings sites, companies are solicited to buy enhanced listings, and this disguised advertising may make them more appealing to prospective customers. For example, Kudzu’s “Enhanced Profile” service promises the paying company “Higher placement in search” as well as the ability to add photos and video and a marketing description.

Angie’s List

Angie’s List subscribers get access to data and customer feedback on a wide range of service providers in their local market area. The service boasts more than 3 million members in hundreds of markets around the United States.

Angie’s List, which began operations in 1995, uses proprietary technology to process reports, and one of a team of thirty people employed by Angie’s List reads every report before it gets posted. Reports praising your own business or dissing a competitor’s are ferreted out and removed. As happens on eBay, customers and businesses can respond to one another. When Angie’s List receives a report on an unregistered company, that company is allowed to register for free. By registering, the company can then respond by posting to each customer’s report. Consumers may not report anonymously, but their identity is only disclosed to the companies they rate. Angie’s List also offers conflict resolution when a customer and company are at odds over their interaction.

Angie’s List says that they have a “zero-tolerance policy” about companies hassling a customer over the posting of negative comments. The report is posted live for all members to see, which obviously offers an incentive for the service company to resolve the issue quickly. If the service company resolves the complaint to the customer’s satisfaction, the dispute is considered “resolved” and the negative report is removed from the service company’s record. That’s the leverage Angie’s List uses to get complaints resolved. The member can then choose to file a new report, but if they do, they must grade the company at a B or above. However, the member is not obligated to file another report.

Co-founder Angie Hicks never really considered the advertising-only model so often used online when she started her company. “We offer a premium service with high-quality information. Consumers are willing to pay for good information. Consumers are looking for trusted filters,” says Hicks.

Angie’s List has not totally forsaken ads. The company offers coupons from highly rated service companies. Companies pay to run coupons and must have an A or B rating. Like a school report card, grades range from A (best) to F (worst). If a company has any unresolved complaints, it can’t advertise, regardless of its overall grade.

(Note: At the time that this book goes to press in late 2017, Angie’s List may merge into the parent company that owns HomeAdvisor.)

HomeAdvisor

HomeAdvisor (formerly Service Magic), another large online provider of service-company referrals, doesn’t rely on member subscriptions. With HomeAdvisor, you register for free and provide personal information, including your home address and details of what you’re looking for, and several companies, which have paid HomeAdvisor an annual membership (advertising) fee of about $300, will contact you offering their services. Home-Advisor argues that such fees weed out people who may be operating as a sideline or on a short-term basis and lead to higher-quality, committed contractors being listed on their site.

HomeAdvisor, which is focused on home improvement, repair, and maintenance firms, also has a ratings and review feature where customers can rate the company. To prevent bogus reviews, HomeAdvisor only allows consumers who have found contractors through their service to rate and evaluate those contractors.

Here’s how their service works: Suppose you’re seeking a contractor to build you a wooden deck. After completing background information on the HomeAdvisor site about your planned project, your information would be sent to three contractors in your area who would contact you, arrange a meeting to discuss your project, and give you a proposal (with some contractors, you can actually schedule these appointments through the HomeAdvisor site).

Unlike other services, including Angie’s List, HomeAdvisor screens all contractors, who must meet numerous criteria including being properly licensed within their state, carrying general liability insurance coverage, and passing a criminal and financial background check (which uncovers negatives such as liens, bankruptcies, and judgments), among other items.

In addition to paying HomeAdvisor an annual membership fee of $300, contractors pay HomeAdvisor a lead fee, depending upon the type of work and ranging from $10 to $50, for each lead they are sent. HomeAdvisor’s model allows contractors to target clients by zip code and task, which allows them to be more focused in their prospecting and spend less time driving long distances.

Other resources

Another resource worth checking out is Consumers Checkbook, which compiles service-provider data in the following metro areas: Boston, Chicago, Delaware Valley (Philadelphia area), Puget Sound (Seattle area), San Francisco/Oakland/San Jose, Twin Cities, and Washington, D.C. Checkbook is a nonprofit founded in 1974. Like Consumer Reports, it doesn’t accept any advertising or money from companies it reviews. In addition to its website, it publishes Consumer’s Checkbook magazine in seven local versions for each of the metro areas.

Another option for checking out service providers is to access the Better Business Bureau (BBB) website in your area, which you can locate through their national site. BBB information, which is available without a fee to you the consumer, may tell you if the company you’re considering has any recent black marks but will hardly give you a thorough review of many customers’ experiences like those you will find on sites like HomeAdvisor or Angie’s List. BBBs are non-profits that collect fees from member companies. Thus, they have similar conflicts of interest that Angie’s List and Home Advisor have in being “pro” business.