Uber-Style App to Disrupt Appliance Repair Market Share in 2016
8-10 Minute Read (thank you for your time)
As a small business owner of a service company, you more than likely rely on leads from the internet to keep your technicians busy with COD work. If this sounds like you, then listen up…
There’s a new internet start-up with a 20 million dollar budget whose goal is to disrupt the home service industry with their “innovative” Uber-like app. To put this into perspective, apps like Uber and Lyft took over 50% of the Portland taxi market in just around 2 months!
“We recently had SERVIZ enter one of our markets, and instantly felt their presence!”
Here’s the scoop:
If this all seems too unbelievable, here’s an audacious quote directly from the company’s website: “In December 2014, [SERVIZ] raised an additional $12.5M in funding as part of our ongoing [efforts] to disrupt the existing $400 billion home services industry across the United States…While we are focused on providing home services today, we think that all local services should be transacted this way – from auto repair to medical & dental care to professional services. (emphasis mine)”
You might be wondering: how do they propose that “all local services” should be transacted? Quite simply: It is SERVIZ’s goal to own a large share of the home services market, which will drive consumers to use the SERVIZ website and app to “buy” home services such as appliance repair. This means that if your brand isn’t competitive, they will control how you do business (just like taxi drivers are now Uber drivers in some markets, Your Brand Here Technicians will be SERVIZ Technicians).
This disruption isn’t seasonal and it’s not isolated. According the SERVIZ Co-Founder and CEO, Zorik Gordon, the company saw growth of “more than 50% month-over-month” in just 5 short months after they launched their service in Los Angeles and Orange County in December 2014. “We have an aggressive roll out strategy, and these funds will enable us to expand into new services and new markets.”
I’m going to call this what it is: Rich investors with deep pockets taking more of the market share from local, small businesses. According to an article published by Reuters, “SERVIZ will use the [12.5 Million in raised capital] to expand its service offerings to the top 20 home repair categories and support expansion into an additional 20 geographic markets ” by December 2016 (emphasis mine). To date, SERVIZ has secured a total of 20 million in funding and expanded into four markets (San Diego, Orange County, Los Angeles, and Phoenix).
It probably won’t come as a surprise that SERVIZ was started by the founders of ReachLocal, a web marketing company whose purpose is to deliver leads to local businesses (including, you guessed it, home services). In my opinion, they clearly saw the income potential of the service industry and decided that they wanted a hefty share of the pie.
What’s so “revolutionary” about this new service? From what I can tell, the only difference between a typical service company and SERVIZ is the ability to purchase appliance repair like you’d purchase a book from Amazon. It’s an on-demand model. When scheduling service, customers are given several options: a diagnosis for $29.95, a flat hourly rate of $69.00 / hour, or the ability to purchase a repair service at a flat rate (Note: rates reflect the Phoenix market). Yea, you read that right, now your customers can choose to tell you what they need, and then get mad when you diagnose the real problem (see “service menu” below).
SERVIZ is already taking some heat in the San Diego market for their bad service and misleading pricing. Of course, what can you expect when you have technicians with no supervision or training?
Which leads me to my next point: If the only way that SERVIZ is “revolutionizing” the industry is by gobbling up all of our local business with their 20 million dollar advertising budget, are they really innovators at all? An article published in Wired.com suggests that the “innovation” part of this scheme comes at the expense of local business: “Part of the reason why there are no dominant players in local services is that for the most part it is still a fractured landscape of hundreds of thousands of sole proprietors and very small businesses. But if you believe that the referral and sale of everything from getting your teeth fixed to washing your car moves online, then it follows that some company is going to become the Amazon of local online services. And that company will have a very big business.”
Whether or not SERVIZ has entered your market, it is important that you work NOW to strengthen your brand and diversify your advertising channels. With companies like SERVIZ, Yelp, YP.com, and HomeAdvisor dominating organic and paid placement in search engines (in some regions), it is VITAL that you stop thinking about the web in terms of Backlinks, SEO, and Google PPC, and start thinking about your needs as a brand. Start being curious. How do big brands think? And, how can you revise your current strategy to out-do your big brand competitors?
We are actively watching SERVIZ.com and tracking their expansion. In the mean time, our current recommendation for appliance repair companies is as follows:
- Focus on defining your brand, and ensure that your employees deliver your brand’s customer service experience at every customer touch point.
- Collect every email address! And then use those emails to communicate and engage your customers year around–this will keep you on their minds when something breaks. You can send emails for FREE using MailChimp.com up to 2,000 contacts, so DO IT! We keep our clients busy on off seasons using this strategy.
- Leverage your warranty contracts. SERVIZ doesn’t provide warranty service, so treat every warranty customer like gold. Leave a magnet or sticker on their appliance so they remember you next time they need service.
- Request reviews! I suspect that SERVIZ won’t have 5 star reviews on their “local” accounts, so be awesome and ask your customers to share their experience online. This will get you more work from review sites like Yelp and Google. Feel free to use our 100% free review app. Sign-up here.
- Make requesting service easy. Have an online form submission and offer a web chat option.
- Consider shortening your service window, if possible. SERVIZ is offering a 2-hour window.
- Keep availability for same day service. The perk of using SERVIZ is that you can have a technician at your home in 2 hours, so keep some flexibility in your schedule to accommodate customers as much as possible.