While 2016 was a transformative year for Angie’s List− a subscription-based and crowd-sourced website that provides reviews of local businesses−CEO Scott Durchslag said on Wednesday that he wants more customer engagement for longer amounts of time in 2017.
“Our position in the industry has been unique,” he explained during the company’s fourth-quarter earnings call on Wednesday. “On the one hand, we had unparalleled brand awareness, tremendous site traffic, and the highest levels of perceived quality among our peers. But on the other, we were not efficiently monetizing the more than 100 million annual visits to our site and we were not effectively penetrating the fastest-growing segments of the consumer base, especially home-owning millennials.”
Last summer, Angie’s List launched its new freemium service and removed the reviews paywall nationwide.
“Not only did we make our reviews available free of charge, but we also rolled out new tiers to our more than three million members, and we did so without disruption,” Durchslag said. “We recognized at the outset that monetization of freemium will take time and we believe it would occur in what we call waves. As a reminder, Wave 1 is at the top of the funnel to grow members and engagement. For the full year, we added 2.9 million gross members and we ended the year with a total of 5.1 million members.”
To put its full-year member additions in perspective, Angie’s List nearly tripled its gross additions in 2016 compared to 2015.
During the fourth quarter, Durchslag noted that unique new member visits increased 120% versus a year ago. Unique new members searching on the Angie’s List platform increased 113%; unique new members viewing profiles increased 98%.
“While good, those results are not sufficient and we have more to do to engage the entire member base,” Durchslag added. “We want members to use Angie’s List more frequently and more extensively.”
Wave 2, he noted, involves converting those growing members into increasing sales origination. In 2016, the company added 1,200 net participating service providers, up from 162 in 2015. Angie’s List now has nearly 56,000 service providers.
Wave 3 targets increasing service provider renewal rates.
“In this wave, we expect the flywheel to gain momentum, driving revenue growth and margin expansion,” Durchslag said. “This wave should begin to build before year-end. But due to revenue recognition and the dynamics of our model, or what we referred to as the flywheel, it won’t contribute meaningfully to revenue before 2018.”
In 2017, technology and product focus will be on leveraging the capabilities of the platform to deliver tangible improvements to the user experience that drive member engagement, Durchslag said.
Optimizing the sales engine is another key priority this year.
“To achieve this, we improved sales processes, sales tools, service provider targeting, pricing, organization design, and leadership and training,” Durchslag added. “In addition, we took steps to strengthen our service provider relationships by differentiating the presentation for advertisers on our website and reducing the portfolio size for our client service reps to improve effectiveness. Sales optimization will continue to be a priority in 2017.”