Modern Marketing

Helping consumers make the right choices will be the next big thing in marketing

By Barry Dudley |

February 7, 2014 | 7 min read

You can never, they say, have too much choice. Or perhaps you can.

Whilst few people would disagree that the opening-up of the telecoms market back in the 1980s has benefitted consumers (some readers of The Drum might remember the days of the state-owned BT and its predecessor the GPO, when you had to wait months for a phone to be put in) and the economy, there has been one ‘downside’ – a plethora of choices.

While we all like the freedom to choose, to shop around for the product or device or tariff that best suits our pocket and our needs, it’s a well-known fact that too much choice makes us indecisive, or even anxious.

Sometimes – and this has been a source of much disquiet in the energy supply market – there’s even a feeling that a surfeit of choice is used deliberately to bamboozle us into paying more than we might need to.

Interestingly the huge range of choices available in telecoms (phone networks, the phones themselves, broadband and TV), other utilities and financial services has led to a thriving business sector whose existence would have been unthinkable back in the 1990s – the comparison expert or switching site. These sites – uSwitch, confused.com, moneysavingexpert, moneysupermarket, GoCompare and so on – have their roots in Which?, the monthly magazine published by what was then called The Consumers’ Association (and is now also, confusingly, named Which?).

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Most of them make their money from advertising on their sites (and the comparison site is an example of a business model which could not really exist without the internet) or commissions paid. It’s a big business – witness the hugely competitive insurance comparison markets (you cannot escape TV ads starring Russian meerkats, cheesy opera singers or talking robots), or the fact that Moneysupermarket.com paid £87m for journalist Martyn Lewis’ nine-year-old MoneySavingExpert.com.

Another, somewhat smaller, but still significant, deal was probably the highlight of this week.

Broadbandchoices.co.uk, a leading Ofcom-accredited comparison site for switching broadband, phone and entertainment services, purchased mobile phone comparison site rightmobilephone.co.uk for – you guessed it – an undisclosed sum.

The purchase is the first acquisition the business has made since receiving a £10m injection of investment funding from the Business Growth Fund in October 2012. In passing I should mention the BGF, which was established in 2011 to help Britain’s growing smaller and medium sized businesses.

In a rather under-publicised move on their part (why they haven’t shouted about it more I don’t know, it could help with restoring their rather tarnished image), five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered – set up BGF as an independent company with up to £2.5bn with which to make long-term equity investments.

The acquisition rounds off an eventful 18 months for the increasingly ambitious broadbandchoices, which saw it begin the process of commissioning its first-ever national TV advertising campaign; move aggressively into Europe; and swell staff numbers to more than 70 in a recruitment drive that boosted several departments in the firm including marketing, IT, senior management and finance. It has also quietly been acquiring small businesses over the past 18 months, although this latest deal is probably its biggest yet.

So why did broadbandchoices buy rightmobilephone? Partly because the company wasn’t in that space, and partly because I suspect they’re smart enough to realise that with increasing technological convergance, mobile is where one has to be. It’s conceivable that in 15 or 20 years’ time, for most people, a mobile device with a stripped-down operating system and some sort of flexible wireless keyboard, will handle all their computing needs; the desktop PC and laptop being largely confined to professional, corporate or high-power (CAD, photography, film editing, desktop publishing) applications.

Having acquired rightmobilephone's platform technology, broadbandchoices now plans to launch its own mobile comparison offer, integrating the newly-acquired company’s staff (the founders of rightmobilephone, Neil McHugh and James Zielinski, will join the broadbandchoices team) and expertise into its own. A launch is planned, with admirable speed, within the next few weeks.

It seemed that broadbandchoices’ MD Michael Phillips and his team did their homework, because by all accounts rightmobilephone's technology was a natural fit for the business.

But the main significance of this deal is that I think that (what I will christen as) ‘comparison marketing’, is going to be very, very big in the coming years.

The purpose of advertising is to change behaviour in some way, whether it’s to buy something you didn’t think you needed; to swap from Brand A to Brand B; to stop doing something (smoking or eating too much salt for example); or start (wearing a seat belt in the back seat or examining your breasts).

On the whole, it has done this by appealing to the heart, rather than the head. Coca-Cola, for example, has never talked about its ingredients, or the fact that it has refreshing qualities – it has always talked about those quintessential American values of youth and freedom that it seems to represent.

Apple’s famous “1984” Superbowl ad didn’t talk about specs or ease of use, but about freeing oneself from the totalitarian shackles of the then-ubiquitous IBM PC; the same with the almost as famous “Think Different” ads.

But comparison marketing appeals to our heads, to our logical side. It’s about getting the best deal, or the most appropriate product or service. In a world of ever-increasing choices, making the right choices for oneself is becoming more important.

Now, if you knew what you were doing, you could research, say, phone tariffs or new smartphones for yourself. However, very few of us have either the time or inclination to do so, and many of us lack the confidence or knowledge as well.

But answer a few questions, or enter a few parameters, and a comparison engine will narrow the choices down to a point where making a decision becomes easy and stress-free. Instantly one can see why such sites are popular with consumers in all kinds of markets – which means that they will be increasingly important to companies who want to put their product and services in front of consumers right at the decisive moment when they’re about to choose…

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