Issuing credit cards through aggregators – new insights from comparethemarket.com
For credit card issuers, comparison websites like comparethemarket.com and its peers are one of the ways to reach potential customers and get products in front of those consumers that are already showing an active interest in applying for a card. In a bid to learn how aggregators and the providers that work with them can increase their success rates winning customers through comparison sites, comparethemarket.com recently carried out some research with real life consumers, to better understand how they feel about various different products and the possibility of buying them through an aggregator site.
The research that comparethemarket.com did consisted of several focus groups with people who had previously used comparison sites to research and buy car insurance. Comparethemarket.com were interested in how these customers felt about using comparisons sites to find an energy supplier or buy home insurance, life insurance or credit cards. None of the people that took part in the focus groups had ever used a comparison site to buy these products before.
The research revealed some useful insights about how consumers feel about credit cards and the processes they go through when choosing a card. Using these insights, aggregators and direct providers can learn more about what consumers are looking for when they shop around for credit cards, what the barriers are to using comparison sites and how best to help customers feel secure and well informed when they are making a decision about which card to apply for.
One of the most significant findings from the research was that consumers feel a higher level of anxiety around credit cards than other products like car or home insurance. This is because many of the people who took part in the focus groups used their cards to manage debt, had poor credit ratings or had been turned down for credit cards in the past. This suggests that it’s important for credit card issuers and aggregators to provide clear, useful information about how each card works and how to choose the right one based on a consumer’s needs.
Many consumers also buy credit cards fairly impulsively. The research suggested that this is particularly the case for women, who are more likely to respond to in store calls to action, for example. Consumers also act fairly spontaneously on credit cards as their 0% balance transfer hits its limit or when they see an offer that beats their current deal.
One of the key features many of the people at the focus groups were looking for was 0% on balance transfers, so putting these front and centre of any page on credit cards may help to ensure consumers find what they are looking for as quickly as possible. It also emerged, perhaps unsurprisingly, that consumers are drawn to cards which give something back such as rewards, cash back or air miles.
It’s important for credit card providers to be aware that many consumers will seek the advice of Martin Lewis at Money Saving Expert for advice on credit cards and the current best deals, so making a competitive and customer friendly offering on cards (i.e. a card that benefits the customers as much as the provider) will help drive more customers your way. Just as aggregator sites aim to help customers find the best deal, a site like Money Saving Expert aims to provide completely impartial and honest advice to consumers. If a provider’s credit card appears on a popular comparison site like comparethemarket.com and is also featured by Money Saving Expert, they are likely to see strong take up on the offer.
Some of the challenges for comparison sites offering credit cards include consumer anxiety around financial products that can affect their credit rating, the fact that it can be easier to go to a direct provider and the limited range of cards that some comparison sites are able to offer. For this reason, supplying a good and representative range of cards is really important, as well as making sure that consumers feel confident that they understand the card they are applying for and that they know what the application process will include – in particular at what point their credit rating could be affected and whether they may be turned down by the provider.