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The Business of Comparing Businesses

November 8, 2018

The expansion of the internet has led to new consumer habits and one of the most popular is to use price comparators before purchasing all kinds of products. More and more users do not conceive of their day-to-day shopping without these tools.

These search engines allow consumers to immediately consult a wide range of products or services classified according to various criteria on the same web platform, although the price is what prevails. “Now users no longer have to walk through banks one by one to find out,” says Francisco Garcia, founding partner of Bankimia.

This comparator of financial products is five years old and receives one and a half million visits a month, according to its data. Its secret? “The quality of information, good positioning in search engines and agreements with other portals,” says Garcia.

With these platforms, users save time and money. Elena Betés, general manager of Rastreator, an insurance comparator, says: “Based on surveys of our users, we calculate the average savings at 187 euros. Trivago, leader in the hotel sector, gives another scale and assures that, through its website, “users save around 35% of the hotel price”.

Companies also benefit. The sales director of the La Florida hotel, Raúl Lizón, acknowledges that, although this five-star accommodation has no direct relationship with price comparators (“they acquire information about the hotel through the Internet”), these help them to gain sales: “They give us more visibility”, he justifies.

Weak points

The main guideline for users continues to be price, although other factors also play a role. “Consumers know what they want to buy and are willing to pay according to their criteria,” explains Pablo Foncillas, professor of marketing, e-commerce and innovation at IESE. For the spokesman of , “the opinions and assessments of other users have a very important role and some services such as wi-fi are essential for tourists when choosing a hotel.

Among the weaknesses of this activity highlights the risk of sending Internet users to empty websites that do not correspond to the product requested or to others that no longer exist. To avoid this, one of the tasks of the comparators is to keep up to date with the changes made by the companies that offer the service. The permanently updated information, they explain in Bankimia, is introduced in their system by means of a double control method to minimize errors.

Another challenge of the sector is to offer a very wide and plural information to satisfy the needs of its users. “Comparators are required to have a lot of product and to be able to attract a qualified traffic of consumers,” warns Foncillas.

Very aware of the barrier of insecurity or distrust that can sometimes generate the network, these websites give special relevance to customer service. “We accompany users through an online chat or by phone with any questions they may have,” explains the director of Rastreator.

The revenue from this business is generated from a commission charged to companies when one of the customers who transfer a transaction closes. The measure does not involve any additional cost to the client. Other ways to generate income for the evaluators is the positioning that these comparators give to the companies, explained industry experts, or through advertising on the website.

The phenomenon also has its critics, who lament that these systems make companies lose their identity in favor of price alone.