OAKLAND, Calif.—What do home repair specialists, auto service and tire shop owners and chiropractors have in common?
If you're waiting for the punchline, there really isn't one. The answer, however, lies buried in the buzz words "customer satisfaction."
Those professionals can be rated on the level of service they deliver in a particular market. Then, as the theory goes, based on how they score, consumers will either patronize that business, or run into the arms of a higher-scoring competitor.
That opportunity to rate service providers is being offered by a company that calls itself a "pioneer" of branded ratings services.
Ages ago, Texaco used to encourage motorists to trust their cars to the man who wears the "big, bright Texaco star." Nowadays, in this era of Internet immediacy, Oakland, Calif.-based ValueStar Inc. is hoping to present consumers with a similar level of trust as it rolls out its ratings program nationwide.
The company was founded in 1992 by Jim Stein, a business-to-business veteran who worked with local service professionals in various industries. One of his projects involved setting up specialized Yellow Pages directories targeted at the Asian and Hispanic markets.
Katrina Beglinger, chief marketing officer for ValueStar, told Tire Business that CEO Mr. Stein hatched the idea for the company on the premise that, aside from simply a directory listing, there's got to be a better way to provide information of value to consumers regarding what other consumers say about a business.
What it boils down to is that issue of the t-word: Trust.
"In the research we've done, other than by word of mouth referrals, consumers don't often trust the service industry," Ms. Beglinger pointed out. "Tires may be a little easier because a customer can see an actual product. But when you have a plumber or roofer come to your house, and you're going to spend a lot of dollars on a repair, that's a big trust issue."
Consumer skepticism abounds in service industries because a purchasing decision often is based on something as intangible as the plumber's or auto service technician's quality of work.
"If you have a company like ValueStar coming in and helping you make a decision," she added, "you can rest assured you're making the best decision you can."
ValueStar's emergence in Midwest and East Coast markets is just beginning, explained Peter Berbee, vice president of product development. A year and a half ago the company was only operating in California. It launched its new Web site in July, and has now begun rating service providers in other markets.
The company said it has already completed more than 670,000 customer satisfaction surveys in more than 350 industries, rating local service companies on their level of customer satisfaction.
How it works
ValueStar is focusing on service provider categories that encompass a pool of about 6 million businesses, including auto repair .
Thus far, Ms. Beglinger said, the company has rated about 1 million businesses of various types by verifying their credentials, credit, finance, licensing etc. Its directories include firms as varied as construction, veterinarians, carpet cleaners, attorneys, auto dealers. Even funeral services.
In the automotive category, it has concentrated on tire and auto service and collision repair shops that provide a range of services such as air conditioning, brakes, mufflers, engine rebuilding and transmission work.
In the past, ValueStar sent a rep to an interested company which then provided its customer file of names and phone numbers. ValueStar surveyed those customers in order to set up a rating for the firm. Businesses earning an average customer satisfaction rating score of at least 85 percent or above were then awarded ValueStar certification and the right to use and display its symbol.
ValueStar's customer ratings program is audited regularly by the research departments of San Francisco State University and the University of Texas in Houston.
For quick enrollment into the program, the company can conduct a phone survey of customers, at a cost of about $500. The information can then be put on ValueStar's Web site.
However, with the expanded possibilities the Internet offers, ValueStar is in the process of building what Ms. Beglinger called a "proprietary real-time ratings transaction engine" where a consumer can go online, register and rate a transaction with a service provider. An e-mail will then be sent to the business to verify the transaction before that customer's evaluation is included in any rating.
That ratings engine is more dynamic than a phone survey and produces more scalable results more quickly, she said.
While that system is not fully online and operational yet, the company expects a full-fledged consumer launch in the first quarter of 2001. It will, Ms. Beglinger predicted, drive more consumer traffic—and business ratings—to ValueStar's Web site.
She described the real-time transaction rating system as a "closed loop" procedure, meaning a service provider can't get scammed by someone saying something—positive or negative—about a business they've never used. A consumer must register at the ValueStar's Web site before being allowed to rate a company.
Becoming a ValueStar "partner" entitles a consumer to a number of benefits, the company claims, including:
Free mediation services—ValueStar will assist a consumer and business resolve a complaint.
Satisfaction guarantee—If mediation fails, an unsatisfied customer will be paid up to $500 by ValueStar. But Ms. Beglinger said participating firms are so committed to the program "that we don't expect to pay out a lot."
A "Consumer Bill of Rights"—Participating companies agree to guarantee such things as problem mediation within 48 hours.
"SmartShopper"—The company Web site said it provides the convenience of "one-stop shopping." Once a consumer narrows the choices of service providers, multiple companies receive an e-mail in which the consumer can articulate a specific need, request a bid or pricing information, availability of times, "and anything else that will help you evaluate these service companies." and
ValueStar Rating Points—Each time consumers rate an authorized service provider after a transaction is completed, they receive reward points redeemable for products, services and travel.
Next: What ValueStar wants its symbol to represent to businesses and customers; the company's future plans; and what some ValueStar-verified auto service shops think of the program