The online product sales world already has its Amazon. It’s called Amazon. In the local services world – plumbers, dentists, doctors, lawyers, and mechanics – no such giant yet exists. Combine all those “needs based” services, all those leaky roofs and toothaches, and you’re staring at an estimated $1 trillion-plus opportunity.
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.
Different companies are taking swipes at different parts of the services economy as they try and shift everything to a physical world that behaves like our smart phones. Uber with cabs. ZocDoc with doctors and dentists, TaskRabbit and Exec for all sorts of chores.
Today, ClubLocal is planting a flag as the would-be Amazon of home services, the $400 billion or so annual market for all that stuff that needs to be fixed, painted, plugged, hooked up or otherwise spruced up in your home.
ClubLocal is a new offering from ReachLocal, a publically traded (RLOC) online marketing and lead-generation company based in Woodland Hills, California. In 2012, ReachLocal booked about $455 million in revenue, and ended the year with a small loss. The move from helping local businesses find customers to actually booking sales is a natural progression, says co-founder and ReachLocal CEO Zorik Gordon.
With ClubLocal Gordon was keen to address three key areas of pain for anyone who has ever tried to get something fixed in their home.
1. No searching blindly for a reputable plumber, electrician, painter etc. ClubLocal vets the folks in advance and has a stable of experts to choose from. You describe a problem, and ClubLocal promises to send the best person to fix it.
2. Standardized pricing. Prices are fixed, and there is a list of 5,000 things that cover most of the minor disasters that befall people. In Dallas where ClubLocal has been piloted, the average service call was $267, below the average market price of $354, according to ClubLocal stats.
3. Move the whole experience online. From booking an appointment on your smartphone or computer, to watching the progress of the plumber on a map as they approach your home, and finally to paying. “I wanted to be able to solve whatever issue I was having in my home while eating a bowl of Cheerios,” Gordon says.
If the advantages to the consumer seem obvious, Gordon says those on the other end of the transaction benefit too. ClubLocal doesn’t aim to be the lowest-cost provider, but it does want to offer a discount to the market rate. If you are an electrician taking ClubLocal jobs your incentive to make slightly less (they still make money on the job Gordon is quick to say) is more work. “We offer them volume, and a job they might not otherwise have gotten,” Gordon says. “I’d like to be a big portion of their business, maybe one-third, but we won’t be all of it.”
In addition to Dallas, ClubLocal launches its service in San Francisco today, and plans to expand to other markets soon. When asked whether he expects an army of angry plumbers and electricians to fight back against the changes he’s bringing – especially the transparency of pricing – Gordon remains unruffled. Citing Uber and its battles with cab companies and taxi commissions. “I tend to think that stuff works itself out,” Gordon says. “All you can do is say, ‘this is the way it should be,’ and the best way usually wins.”