In appreciation of a cool business model:

I recently signed up for Angie’s List.

I know, I know…but Kelly…you’re so avant garde. Congrats on joining the millions of other subscribers to the #1 ratings web site for local service providers.

Me being slow on the uptake aside…

We signed up & tested it out. We found a handyman and then a plumber and then a cleaning service. With all but the last, the ratings were accurate and we ended up having great experiences. And, ok, the cleaning service probably would have worked out better had I called one that had an actual review.

A couple weeks later, we get this mini-magazine in the mail.

It’s got maybe 8-10 pieces of original content. Anything from, tips for proper maintenance of your home….to criteria for selecting.

But surrounding each article are ads for – you guessed it – local handymen, plumbers, cleaning services (and more).

What I was impressed with was the simplicity and their ability to get paid on both ends of the deal.

On one end, they have me paying to be part of a social forum.

On the other end, they get the advertisers to pay for ads on their site and ads for the local publication.

What’s more the publication is super-cheap to produce…and is most likely a major source of their revenue generating activities.

They’re using a concept called ‘mass customization’ to create highly localized content & targeted advertisements. While at the same time using the economies of scale to keep printing & distribution costs at a minimum.

Basically – they designate areas for common content – the articles – that will be printed on every catalog nationwide. So whether 100,000 or 1,000,000. The more they print….the cheaper it is per issue.

At the same time, they have the geo-targeted content – the ads – that’s laid in on specific areas of the magazine.

This allows them to get bulk printing savings on a the majority of the printing costs for the magazine… yet still only strip in maybe 5,000-10,000 of ‘customized’ content in each of their targeted areas.

The result?
A magazine that looks like a highly targeted & extremely relevant ‘value-add’ provided to the subscribers of their online service…But is actually a revenue generating marketing piece for both Angie’s List and their advertisers.

Brilliant.

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