5 Comparison websites – not the full story
Comparison websites are a common part of making spending decisions, for example when you’re looking for the best deal on a phone or a new pair of trainers or car insurance. They’re also widely used to research utility services and e-services – to help choose between gas and electricity suppliers, and internet providers.
Comparison sites started to emerge in the 1990s, coinciding with the start of the internet.
They’re a way for customers to compare the costs and benefits of one company’s products against another’s. They provide a quick way to gain quotations from different organisations.
Most of them offer a choice between buying online and, less commonly, by phone. In effect, comparison sites are a form of intermediary: companies that supply the goods and services pay the owners of the comparison site each time one of their products is sold.
The strongest brands currently are:
The consumer advice organisation Which? also provides product comparisons:
To offer something different, there are firms that are making a virtue of not being on comparison sites by claiming that their products are cheaper as a result, such as Direct Line.
Taking an impartial overview, the financial services regulators have raised concerns about customers not getting the level of clarity they need to make decisions about which products to buy.
However, despite these issues, comparison sites continue to proliferate and grow in use.
Activity 3 Estimate their impact on markets
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Comparison sites are a key driver for switching from one supplier to another. In this video Martin Lewis talks about the sense in being a ‘switcher’ instead of being a ‘loyal customer’.