Price comparison websites do a great job helping consumers find good deals, but can they also be useful to small business owners? Rachel Miller finds out how to use price comparison websites to analyse the competition and target an offer more effectively
For consumers, the opportunity to compare prices from different retailers at a glance helps them save money by finding good deals. Most of these sites now also carry user ratings that help buyers make decisions about products and retailers, and some even recommend new products to buy.
So there is plenty there for consumers. But what can a typical small business owner learn from a price comparison website?
- Find out who's selling what. Price comparison websites allow you to compare many of the suppliers of a product in one place, giving you a consumers' eye-view of the market. It's easy to search for the products you sell to see exactly who you are up against and find out what makes each of them special - do they have good terms of service, for example, or an easy-to-use website? It's worth finding out what else your competitors are selling, too, because you might be missing out on popular product lines and potentially lucrative business.
- Keep up to date on price. In a difficult market and with consumers looking for bargains, price is more sensitive than ever before. As a result, retailers are constantly adjusting prices to try and stay ahead of the game, both on the high street and online. As a small business, you can't afford to be out of touch on price. You may not be able to compete purely on price with the biggest firms but you must make sure that your price is competitive.
- Compare levels of service. Customer service is an important selling point for small businesses and can help them stand out from bigger operators. Service terms should cover delivery speeds and costs, refund policies and payment security. Crucially, they should also offer an easy way to ask questions and make complaints. Use price comparison sites to compare the service being offered by the different sellers in your market.
- Check out the detail. Shoppers don't always choose the cheapest product, but will take into account all the extras, including shipping costs, the service promise and the reputation of the retailer, before committing to buy. So it's worth checking out the details and not just comparing price tags - that's what your customers will be doing after all.
- Pay attention to user ratings and reviews. Reputation is critical and many price comparison websites facilitate word-of-mouth recommendation through customer ratings and reviews. This is basically free market research that tells you which products are rated most highly. What's more, most reviews include feedback about service as well as the products themselves so you can compare how well your competitors are meeting their customers' expectations. Could you do better?
- Watch out for hot products and spot trends. Many price comparison sites pick out best-selling items or feature popular products on their home page. By spotting trends, you can make sure you stock the right goods, promote them prominently and price them competitively to take advantage of demand.
- Look for weaknesses. When you analyse your competitors on price comparison sites, don't just look at what they are doing - check for the gaps, too. Do you have something unique to offer that can make you stand out from the crowd? What are your strengths and do your customers know about them? Compare unique selling points and make sure yours are distinct. Comparison websites can give you a good snapshot of a sector - is there a gap in the market for a new product or service?
- Click through to websites. Some price comparison websites allow you to buy then and there. But most offer lists and links through to individual suppliers. This is a crucial stage in the buying process when shoppers often rethink their choices. To investigate your competitors fully, you need to click through to their websites and see what they are getting right and wrong. Shoppers will be put off by badly-designed landing pages, poor navigation, inadequate security or by simply having to jump through too many hoops to be able to buy something. Make sure your website is clear and simple to use.