reputation trend: online marketplace guarantees (photo by https://www.flickr.com/photos/clevercupcakes/)

reputation trend: online marketplace guarantees (photo by https://www.flickr.com/photos/clevercupcakes/)

A great online reputation is worth its weight in gold. And increasingly, we’re seeing that online marketplaces with reputation worthy partners are putting down cold, hard cash to back them up.

Last week, Angie’s List made news with their Fair Price and Service Quality Guarantee, offering refunds of up to $100,000 to customers who are not satisfied with the quality delivered by an Angie’s List provider. Angie’s List has become established as one of the most trusted marketplaces online, and with this new guarantee, they’ve made a serious promise that they’ll continue to deliver on the high reputation confidence that they offer to their customers.

Angie’s List isn’t the only company backing up the reputation of their marketplace partners. Amazon has long offered an A-to-Z Guarantee, which gives buyers up to $2,500 in protection when buying from third party sellers on Amazon.com. Similar to the guarantee offered by Angie’s List, Porch offers a $1,000 guarantee for work done in homes by Porch verified professionals. Many are also familiar with the eBay Money Back Guarantee, which also includes up to $50,000 in vehicle purchase protection.

It’s exciting that we’re in a time when companies have enough data about their partners to be able to back them up with such confidence. Using algorithms including consumer reviews and ratings, companies can now form reputation assessments that tell them which providers are good for their customers and which ones they’re better off not recommending.

This is great news for businesses that are able to maintain a stellar reputation on the marketplace sites. It’s especially good news for consumers, as they’re able to further whittle down their dizzying array of choices to find providers that are most likely to give them great service.

At the same time, it says a lot that companies have to offer these guarantees. It means that unfortunately, customers are still not always receiving quality service, even in a time when business know they may be reviewed by practically every client — and that it can have an impact on their standing in various online marketplaces.

Unfortunately, even as online reviews continue to become more prevalent, there’s always a chance of becoming the unlucky consumer that ends up with a company that just doesn’t deliver as you’d hoped. “Online reviews are a good help in gauging performance, but it’s still possible you’ll hire a company just as it hits the skids, or there aren’t reviews to guide you,” warns Cheryl Reed, director of external communications for Angie’s List.

According to Angie’s List data, 77% of U.S. home owners continue to worry about getting quality work. In fact, it’s their biggest worry. They are also often concerned that they’ll be overcharged, with 40% citing this as a worry when hiring service providers.

This worry is not unjustified. A 2014 Angie’s List/Harris survey indicated that 52% of U.S. home owners who have hired home repair, improvement, or maintenance service providers have had problems with their contractor. For more than a third of them, the service was so bad that they either fired or wanted to fire their contractor before the job was done.

While troubles with service providers continue, this shift toward significant guarantees offered by online marketplaces is an exciting one. It means we’re getting better at identifying companies by their reputation, and ultimately, delivering better service to consumers.

It also means that if you’re a service provider in an online marketplace, there’s even more pressure to continue to offer a high level of customer service and satisfaction. With this added pressure, we expect to see those who are able to deliver on the promise of a great reputation succeed.