Price comparison is big business. The first price comparison websites emerged in the early noughties helping everyday consumers save on financial products such as credit cards, loans, and energy suppliers.
With a table of providers and suppliers, customers can compare loan amounts, rates and tariffs and the comparison website can earn a handsome commission for generating sales and conversions.
Fast-forward 20 years and you have a thriving industry, with a couple of household names regularly appearing in the news, TV, and radio advertising. Furthermore, there are a number of price comparison spin-offs, offering an array of products and services.
But alas, whilst setting up and running a price comparison site is appealing, it is not always as easy as it seems. We speak with David Beard of price comparison, LendingExpert.co.uk, who shares his secrets.
Choose your niche
Beard: "Initially price comparison was heavily geared around car insurance and credit cards. But today the online market is very competitive, and the price comparison proposition can extend to other products and niches such as current accounts, business accounts, savings accounts, pensions, mortgages and more.
"As a price comparison website, you can choose to do and compare everything, although this might be hard to cover all the hundreds and thousands of products that exist. Not forgetting you have individual products for demographics such as students, tenants, over 55's, bad credit and more that can make the list almost never ending.
"It is worth choosing your niche and really going for it - and you may notice that some price comparisons focus on car insurance or energy or even home insurance as their main niche. Beyond this, we have seen very creative price comparisons focus on other niches such as b2b marketing services, products for seniors and even business funding."
Do you truly compare?
Beard: "An important question is whether you truly help people compare products as a price comparison website or service. Do customers see a table of only a few suppliers? Do you clearly show rates and terms? Can people ultimately save money by using your site?
"A good price comparison is able to gear their user experience towards helping people save money - and not just displaying providers based on your own commercial incentives.
"Helping the consumer by including calculators, introductory offers and offering impartial quotes can be a good way to help the customer save money and this will typically help conversion too."
Understand approval rates
Beard: "Whilst offering a clear comparison table with lots of providers and rates is good, you also have to think about approval rates.
"Sure, this one lender is the cheapest or this one credit card provider offers low rates, but what if they only accept 1% of customers? You will find that a number of people apply and do not receive a loan and you do not earn any commission. So, there is a balance here.
"You need to understand approval rates and monitor this closely, whilst always speaking with providers and confirming which times they are more eagerly accepting or funding customers."
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