Aggregators, otherwise known as Price comparison sites, have become a popular customer acquisition strategy for Financial Service companies. They are expert at enabling organisations to qualify and generate leads in a cost-effective way. However, the Aggregator business model naturally creates an extremely competitive marketplace. This led us to consider how Financial Service companies can create a competitive advantage in such a crowded environment.
We conducted a LinkedIn Poll which suggests companies can optimise aggregator value if they invest in brand promotion. The indication being that consumers are 56% more likely to choose a brand that they know and trust.
The Poll Results:
These results are supported by one of the market leading Aggregator Sites which claim that over 90% of sales are from the top two deals on comparison websites, with customers consistently choosing the more recognised brand of the two. Therefore, investing in brand promotion would seem to deliver aggregator success.
Aggregators have become a familiar consumer resource in the financial services industry. These sites allow consumers to compare the prices and features of various financial products and services, from different providers all in one place. Indeed, aggregator websites offer a “one stop” convenience for consumers, and leverage far greater consumer reach for suppliers.
However, there are downsides for financial service companies that use them.
Things you need to consider
Brand Image Control - Aggregator websites often present information about financial products and services in a standardized format, which can make it difficult for individual companies to different iate themselves from their competitors. Indeed, brands may find that their message is lost in the noise of other providers.
Pricing Strategies – Companies are often required to offer highly competitive pricing in order to be listed on the site. This risks a race to the bottom in terms of pricing, with providers being forced to lower their prices to remain competitive. While this may be beneficial for consumers who only buy on price, it can be detrimental to companies that rely on higher margins as they offer more personalised service levels.
Direct Engagement - Customers who use aggregator websites to compare financial products and services may be less likely to engage directly with individual companies. This in turn can make it more difficult for providers who offer more sophisticated financial services to establish the kind of relationship necessary to properly match solutions to customer requirements.
Privacy - Providers may be required to share sensitive customer data with the aggregator site in order to be listed. Given the high levels of privacy regulation in the Financial Services industry this may introduce additional unwanted risk.
Customer Loyalty – Customers who use aggregator websites to compare financial products and services may be less likely to remain loyal to a particular provider, as they may be more focused on finding the best deal rather than building a long-term relationship. This can make it more difficult for companies to retain their customers over time, increase churn rates and negatively affect the lifetime value of a customer.
Long term sustainability
Financial Service companies focused on long-term sustainable growth can combat some of the challenges they experience with aggregators by establishing an appropriate connection between brand and consumer. As already stated, consumers are 56% more likely to choose the brand they already know on an aggregator site.
Upper funnel Branding and Reputation Management - Aggregator websites generally offer a level playing field for financial service providers to showcase their products and services. A risk of such fierce competition can lead to a dilution of branding efforts, making it difficult for companies to stand out from the crowd. It is therefore necessary to build unique value propositions, with clear brand promotion across multiple channels to improve brand presence and achieve significant reach.
Mid funnel Quality Assurance & Satisfaction – For consumers in the education/consideration phase, it is important for brands to provide evidence of high-quality service and customer satisfaction in their marketing messages. Transparent and accurate information of fees, charges, product information and value-added services will build trust and loyalty.
Lower funnel Data Driven re-engagement & prospecting - Aggregator websites are in the business of generating leads. While these leads are, to a degree, quality checked to suit the needs of the provider, they may not initially meet the specific needs of the customer. If site visitors decide to exit the site they’ve been directed to, then multi-channel re-targeting should be employed tow in-back users before they visit a competitor. Leveraging realtime data, providing personalized recommendations to different customer segments, and extolling brand values, offers the best opportunity for financial service companies to re-coup the investment already made to generate leads from aggregators.
We have established that investing in brand building across multiple channels will optimise aggregator performance. However, Financial service providers are not only concerned with long-term sustainable growth, they also have to consider customer risk and provide services in a responsible way. Therefore, for many organisations, launching national campaigns across traditional channels just isn’t feasible. First the cost is prohibitive, second, there is limited control over audience exposure.
Utilising data, analytics, segmentation, and digital channels to activate brand campaigns is both cost effective and provides organisations a better way to target audiences they can support responsibly. If Financial service providers wish to develop a competitive advantage and optimise the value generated from their aggregator channel, then the key to success is to create high-quality, data driven messages that speak directly to the needs and interests of relevant audiences throughout the sales funnel
Sub2 is a digital marketing agency delivering innovative data-led solutions for the Financial Services and Retail sectors. If you’d like more information on how brands are achieving success today, please contact us.