Angie Hicks is pleased to note that new categories get created all the time on the eponymous website Angie’s List, where consumers go to find reliable and recommended local service professionals in fields from home improvement to health care. In fact, she lists one category that is particularly representative.
“There are categories today where services didn't even used to exist,” she says. “My favorite is the pooper-scooper industry — someone to come and clean up after your dog. There was no such thing in 1995 when Angie’s List was launched.”
But that is only the tip of the iceberg that’s one of the biggest consumer website success stories. Revenues for fiscal year 2012 were up 73 percent to $155.8 million. More than 1,000 are employed at the company’s headquarters in Indianapolis.
While that may be impressive itself, Angie’s List earlier this year tallied its 2 millionth household subscription, which was secured 18 months after the 1 million mark was reached. In contrast, it took 16 years for the first million to sign up.
Hicks, who punctuates her upbeat conversations with “Exactly!” “Absolutely!” “Yup!” and “Right!” is more than the face of the company’s television commercials. As well as the founder, she is the chief marketing officer with an MBA from Harvard University and a bachelor’s degree in economics from DePauw University.
She spoke with Smart Business about the success of Angie’s List, and how an emphasis on quality makes the service stand above other business reviewing services.
Q: What was the motivation for founding Angie’s List?
A: We [she and CEO Bill Oesterle] started 18 years ago in Columbus, Ohio, and it came out of when Bill was trying to renovate an old house and was having trouble with a service company. He was familiar with a referral business that had been around in Indianapolis that he had used and started looking around and realized it was unique just to Indianapolis. So we started our own version of that company, and then about a year later I ended up buying Unified Neighbors, the Indianapolis company.
We named it Columbus Neighbors at first, which was kind of our spinoff of Unified Neighbors, but what we realized over time was that people just didn't realize that the list was dynamic. This was pre-Internet days so we were a call-in service in our magazine. We decided to rename it. It was going to be named after one of our friends' mother named Jackie who just knew everybody in town and everything in town. So in many ways, she kind of represented what we were attempting to do.
Then at the last minute, Angie's List was suggested. Bill was a big proponent for it. ‘OK, she is the only employee,’ he said. ‘It certainly makes the story easier.’ Women today control the home checkbook, so it makes sense that it had a female name.
Q: Has your brand goal evolved over the years?
A: Our brand goal has always been the same — to help consumers find top rated local service providers and especially in the high cost of failure services. For example, going out to dinner, they could undo my dinner. It's not a big expense. It’s not impacting me as much as if I hire plumbers and they do work wrong; it floods my kitchen and I am out time and effort.
So were really focused on those. We started in the home improvement categories; we expanded into auto repair, pet care, lawn care, and most recently the health care industry. So far we have opted not to review attorneys, but it is something that gets talked about. I mean it would work just like any of the other reviews in that kind of situation. There is certainly opportunity.
Q: You recently made TV commercials and the exposure has been successful, even playing a part in reaching the 2 million subscriber mark this spring. Can you describe your marketing strategy?
A: It wasn't until we introduced our current ad creative that it really changed. I have only been in the TV commercials for the last couple of years or so. Before that, I would do media and things like that. But it's certainly different now that we have the TV commercials running.
Public relations was always a part of our marketing mix. We started as local marketers. We would open our offices city by city. We usually received good PR in the market as we were opening. It always was a great boost. There would be an article in the daily paper or a TV opportunity. Those were always important for us.
Then it was about probably 2005 or 2006 when we had enough markets open that it made economic sense for us to start advertising nationally versus locally. You obviously get some scale when you do that. We were looking for an alternative to the daily newspapers, so cable television became the vehicle that we tried and have been successful with. So that was the switch. Our marketing mix includes television, radio, online and some print. It's working well.
Q: Angie’s List promotes its reviews as high quality. Explain your thinking on that. Isn’t that hard to ensure?
A: I think the big differentiator at Angie's List is the focus on the quality of the reviews. We do not accept anonymous reviews. So you are known to Angie's List as well as the company you are reviewing. I think there should be accountability in what you say because people are using this information to make important decisions.
Obviously we have members who are driving the reviews that drive the ratings for the companies, so based on the fact that we have a deep relationship with them because they are members, there are also plenty of ways that we can run algorithms against the data to make sure we've got high quality reviews. If ever a review gets tripped in that process, we actually have a team of people that will look at that review.
One of the most common complaints we get is that service companies don't return phone calls. That is something that we see as an opportunity to make it better.
A consumer can give a review in a scenario like that. Since there wasn't work done it's not weighted as heavy as when work is actually done so if they just come and mess up the plumbing work it is different from should they not return your phone call.
But it is still important as customer service feedback so the company can be alerted to that information. They are welcome to respond to the concern and make improvements to their business, based on that.
Their rating is an average of the reports of the reviews they receive, so each report counts — just like a school report card. There is an A through F scale, and the search request is also returned based on the grade.
Q: Are there ever any fraudulent reviews?
A: Every once in a while we will find one. We will find a company that tried to report on itself. There is a cost for that. A, we are very good at finding it when that happens because of our system. B, the cost is that we will stop returning the company in searches. If they are a plumber, we will stop returning them in searches for plumbers. That can be very costly because it is not unusual for us to drive a large portion of a company's business. A company never leaves the list. So if people look for the company by name, they could see it but, if somebody just searched for ‘Angie's List I need a plumber,’ the name won’t show up.
Q: How do you keep your employees motivated and on the same page to carry out of the brand promise of Angie's List?
A: We spend a lot of time focused on culture. I am a firm believer that good culture doesn't just happen; you have to cultivate it. We empower our employees to do what is right to help the consumers and focus on core ideas. Take your work very seriously; don't take yourself too seriously. Be honest. Be frugal. It is just those basic things. It's both by talking about it and also leading by example that creates that kind of culture.
Q: What do you foresee on the horizon? What are you working on in your R&D department?
A: There are a couple of things. One is continuing to expand our member base, making sure that consumers are finding the best companies they can, but we are also spending time thinking about ways that we can help improve the interaction between consumers and service companies: ‘Here is the company that I want to call or want to get in contact with. How can Angie's List help facilitate that communications cycle?’ Getting a quote, getting it scheduled, that whole process. So we are spending a lot of time thinking about the real opportunities there.
How to reach: Angie’s List, (888) 888-5478 or www.angieslist.com
The Hicks List
Founder and chief marketing officer
Born: Ft. Wayne, Ind.
Family: Mother of three children and lives with her husband in Fishers, Ind.
Education: Bachelor’s degree in economics from DePauw University, in Greencastle, Ind., which named her a 2007 Distinguished Alumni for Management and Entrepreneurship. Master’s degree in business administration from Harvard Business School.
Awards: In addition to the distinguished alumni award from DePauw University, she was named a Torchbearer Award winner in March 2009 by the Indiana Commission for Women in recognition of her entrepreneurial accomplishments and for providing a positive example of the influence women have on their community and the state of Indiana.
She is nationally known as a consumer expert. She has raised awareness to attempts to gag consumers from freely discussing customer service experiences; pitfalls in the real estate industry; and home improvement safety. Hicks has issued calls for action in several areas, including health problems caused by lead paint, radon and mold. She is also an advocate for accountability and fairness in the consumer ratings and reviews niche.
She currently serves on the DePauw University Board of Visitors. Hicks also is a co-founder and past member of the Board of Directors of The Governor Bob Orr Indiana Entrepreneurial Fellowship Program, which provides a two-year fellowship at an Indianapolis-area business to graduates of Indiana colleges and universities or Indiana residents.
On her competition:
There are certainly online players, but I always remind people that if you add up all the online players, it is still very small to the total service industry. We follow a very old-fashioned way of doing things — you literally just ask your neighbors, you ask your coworkers, things like that. We collect about 65,000 consumer reviews each month covering more than 550 home and health services.
David Taiclet wasn’t ready for the scene at the Fannie May store in Oak Lawn, Ill., when he showed up around 7 a.m. that day in November 2004. He was there to prepare for the chocolate maker’s first soft launch, scheduled two hours from then, that would set off a chain of reopenings and reignite the brand.
“When a retailer does a soft launch, it means we don’t do a lot of publicity about it, because we’re just trying to get organized to open the store, and then we’ll do a grand opening maybe a couple of days later,” Taiclet says. “We picked that store, because we didn’t think it would attract a lot of attention.”
He wasn’t expecting to find a line of people flooding out the door flocked by TV news crews — not much different from the scene 30 days and 45 stores later when he reopened the flagship store downtown at Michigan Avenue and Wacker Drive, where 800 customers stood in a line three blocks long.
“Picture this: You’re at this store, and you have these TV cameras there,” Taiclet says. “And the TV camera starts talking to a customer who just came out of the store, ‘Hey, I have so-and-so customer right here. What do you think of the product?’ And she’s like, ‘Well, I haven’t tasted it yet.’ So she opens her product up, grabs one and puts it in her mouth and starts chewing on it.’”
Now, keep in mind, this wasn’t quite the same Fannie May that many Midwesterners had fallen in love with when the brand’s mouth-watering sweets became tradition. When the chocolate maker’s parent company, Archibald Candy Corp., sank into its second bankruptcy in 2004, it closed the plant and 250 retail stores and started looking for a buyer. It found one in Taiclet’s company, Alpine Confections Inc., which had recently purchased Harry London, another chocolate company, out of bankruptcy.
So what would the response be now, with new ownership and a few other changes in store?
“She’s like, ‘This is the best Pixie I’ve ever tasted,’” Taiclet says, continuing his story with a reference to the chocolate-covered caramel candy. “You couldn’t pay for that kind of public relations and marketing to say, ‘Hey look, Fannie May is back and our product is outstanding.’”
It was proof that during the tough times that shuttered Fannie May, customer affection didn’t falter.
During the relaunch and beyond — like when 1-800-Flowers.com Inc. acquired Fannie May in 2006 and, after a couple years, asked Taiclet to stay on board as president of the gourmet food and gift basket group — customer service has been Taiclet’s focus. He leads 1,100 full-time and 1,500 seasonal employees under brands like Fannie May, Harry London, Cheryl&Co., The Popcorn Factory and 1-800-Baskets.com with the goal of maintaining the customer experience while staying relevant.
“If you look at any brand, they’re going to have ups and downs through their life,” Taiclet says. “But what makes it an enduring brand is the experience that customers have with it. You can talk about a brand being a logo. You can talk about a brand being a recipe. But a brand is really the experience a customer has with it. As long as you stay focused on that customer experience and maintaining the integrity of that experience, the company may go through ups and downs financially, but in general, you’re going to have a long, successful run.”
Although the soft launch turnout was surprising, Taiclet already knew about the bond between customers and Fannie May. It’s crucial you understand your brand through consumers’ eyes, too.
Taiclet learned about the customer experience during due diligence, when he had a three-month window to accumulate information before the acquisition. He spent that time with customers and previous retail store managers alike, even hiring back many employees to tap into their understanding of the brand. Then he compiled the feedback.
“The most important thing is we focused on, what is the great part of the customer experience?” he says. “What is the relationship this customer has with the brand? What’s the most important thing? We realized there’s this love affair between the customer and the brand. That love affair is the product quality, one; two, the tradition that people had with this product.
“When people described our brand, it was like, ‘Hey, it’s tradition. It’s a trusted friend. It never fails. I know it’s going to be good. You can’t go wrong with this.’”
From those consumer descriptions of the brand, Taiclet knew that going forward, product quality would have to stand up to the legacy of recipes that hadn’t even changed when ingredients ran low during World War II. Of course, hiring back the same employees and using the same recipes helped ensure that the product would stay the same. But he was so concerned about quality that he sent old and new samples to a university food research group for scientific analysis.
Understanding the customer experience takes more than upfront research — it’s an ongoing endeavor. When 1-800-Flowers.com acquired Taiclet’s brands, he was able to leverage its e-commerce platform and social media presence — in other words, become more accessible to consumers and get more personal with customers.
“Feedback has become a lot easier these days, both good and bad,” he says. “You’re deepening your relationship with your customers by offering them these [interactive] opportunities. You get instant feedback. It doesn’t get any better than that.”
Direct contact can even be a business in itself. The company acquired DesignPac Gifts, which created wholesale gift baskets for third-party retailers. Tapping into the capability and name recognition of 1-800-Flowers.com, DesignPac sprouted a direct-to-consumer brand called 1-800-Baskets.com, which has become the fastest-growing brand in the company.
But customer interaction can get even more personal than e-commerce or Twitter can allow. You need to get out and interact with customers, too. Taiclet regularly visits stores, plants and distribution centers, both to work alongside employees and to chat with customers. Whether he’s stocking shelves or attempting to giftwrap boxes — which, he’ll admit, is not one of his strongest skills — he’s facing customers and getting a glimpse into their experience.
“Our management team is active and involved, and I think we know what our customers are saying,” he says. “We live in a world where it’s not hard to get customer feedback, and if you just go stand in a retail store, you know. If you’re standing in your distribution center and you’re seeing the product go out the door, you know the kind of experience that your customers are probably getting.”
Keep things fresh
While it’s crucial to understand what has kept your customers coming back, you shouldn’t limit your brand to what has been successful in the past. After all, you want customers to keep coming back in the future, too.
“What’s important to be relevant to your customer is the tried and true but also that you’re out there being interesting and new, as well,” Taiclet says. “It’s a fine line. But it’s important that you’re giving people a reason to come in: ‘Oh, what’s new?’”
You need to marry the tradition of your brand with a few fresh touches. The challenge is determining whether any changes or additions will influence the overall brand perception.
“Look, not everything you do is going to work,” Taiclet says. “We’re not afraid to try some things. But I can tell you we’re not going to change the things that we know work.”
So don’t mess with the staples of your brand — like the customer experience — that you identify as important through feedback. You can take small steps to improve those things, but you shouldn’t change the game completely.
Many of the new Fannie May products, for example, partner the famous chocolates with other well-loved snacks, like ice cream and Eli’s Cheesecake — and these don’t replace traditional favorites like Pixies, Trinidads and Mint Meltaways.
But most of the changes came simply as an effort to “freshen up” the stores through signage, displays and uniforms.
“Clearly, when we came back, people were quickly pointing out differences,” Taiclet says. “But any differences, we tried to make sure they had nothing to do with customer satisfaction. I mean, the uniforms were a brighter color because we wanted to freshen the look. So the changes that we did make were with the understanding that this would be seen as a positive.”
To help lessen any shock when customers walked in and saw the differences, Taiclet communicated changes they could expect and what those meant.
“At the end, I think they came to appreciate why it was different — it just presented the product better,” he says. “[We] told the customer what it was: ‘Here’s a small little change to tell you that, hey, we’re a new Fannie May, but at the same time, we didn’t mess with the quality of the product.’”
Maintaining your brand’s legacy while keeping it relevant really translates into sustainable growth. It’s a balance that Taiclet thinks will differentiate his brands.
“Companies get themselves in trouble trying to grow at all costs and to grow anywhere and everywhere,” he says. “What we’re trying to do is grow in a smart, sustainable way.”
Along with keeping an ear to customers to confirm that his blend of tradition and freshness is keeping them satisfied, Taiclet also uses financial analysis to temper growth. Before opening a store, for example, he evaluates economics to predict returns. Even though he could have opened eight stores last year, he only opened the five where analysis signaled the best chance for success. At the end of the year, there were a total of 85 company-owned stores, and he also recently launched a franchising program.
“We could grow aggressively on the wholesale side through some of our third-party retailers,” he says. “But it is incredibly competitive in certain areas and we’re going to make darn sure that we don’t get too aggressive. We could go out in that wholesale market and sell a lot of product and grow the top line, but it might not necessarily grow the bottom line. When we talk about ‘grow smartly,’ that’s what I’m talking about is that you’re constantly finessing between top-line growth and bottom-line growth.”
Taiclet has found that balance by focusing on the customer experience.
“We’re fortunate that we have growth opportunities, [and it’s] because we have focused on those things,” Taiclet says. “We just need to be thoughtful and prudent about the different directions we could grow and make sure it’s profitable, sustainable growth and not just one-off. There’s a lot of one-off places to grow for a lot of companies.”
The long-term test for Taiclet is that any changes or growth ventures won’t lead the company astray from the customer experience that has made Fannie May the No. 1 chocolate brand in the Midwest. That focus has helped him grow the entire gourmet food and gift basket business to about a third of the revenue generated by 1-800-Flowers.com — about $250 million.
“(It’s about) the relationship of your product with the customer and the customer experience,” Taiclet says. “Across all of our food brands, what we’re trying to focus on is the positive relationship that a consumer has with you and your product. It is that experience that embodies your brand — and that is your brand, really.”
How to reach: 1-800-Flowers.com Inc., (800) 356-9377 or www.1800flowers.com
The Taiclet file
President, Gourmet Food and Gift Baskets Group
Born: Monterey, Ind., a town of 200
Education: Graduated from Notre Dame in 1985 on Army ROTC scholarship, then served four years active duty. Earned MBA from Harvard Business School in 1991.
What was your first job, and what did you learn from it?
I grew up in a family business; my father owned the local grain elevator. So I grew up working in that business, doing everything. That was probably my first experience with customers and doing anything you could to keep customers happy — and farmers are a tough group of customers.
I’m a Fannie May Pixie fan.
If you could have any superpower, what would it be and why?
I’m married with four kids, and I love my family. If I could just have the power to have those moments with my family that are very special to last a little longer, maybe go back in time and relive a couple of them, that would be pretty cool.
What’s your favorite way to relieve stress?
One, I like spending time with my family. Two, I don’t read a lot of books, but I’m a voracious newspaper/magazine reader. Wall Street Journal, New York Times, Fortune and The Economist are my four things I like to carry around. And if I have a lot of time, I love to fly fish.
What’s the best business advice you’ve ever received?
The best advice I ever got was probably from my father, who said, ‘Surround yourself with good people — both your friends and your businesspeople — because it will make not only you better but your organization better. Throughout my life, whether it was in college or the army or when I owned my own business or worked for others, I’ve always focused on: Am I surrounded by good people, and have I hired good people? I would say that’s been one of the elements of Fannie May’s success is that we’ve attracted, hired and retained really good people to the organization.
Favorite local spot for a business lunch?
Maybe it’s because of my roots growing up in a small town, but I love the local diners and I love the local flavor. We have a plant in Lake Forest and there’s a Liberty Restaurant in Libertyville, Ill. In Glen Ellen, Ill., there’s a small restaurant called Baroney’s there that we’ll go to. In Cleveland, there’s Gasoline Alley down in Bath, but for formal dinners in Cleveland, Ken Stewart’s Lodge is my favorite. And then in Chicago it’s typically, for a formal dinner, Gibson’s. I typically stay at a place called The Talbot Hotel downtown Chicago on Delaware street and there’s a casual dinner right across the street called The Feast Restaurant that I think has really interesting food and wine.