Citing research by Candid Money, the article proclaimed that customers using these sites were not always getting the best deal on the market. The Candid Money research actually showed that in multiple verticals few sites agreed on what was the best value product.
Yet the subject of mortgages in the article was conspicuous by its absence. Are we to assume therefore that this is an area the average comparison site is indeed providing an independent and accurate selection process for mortgages, and perhaps more importantly, does it matter if they’re not? The answer is a complex one.
Historically, comparison sites have been notoriously selective on what mortgage products to display, with lenders active in Pay Per Click or Cost Per Call deals likely to get highest billing, whilst other more specialist lenders are missed entirely. The list of products displayed also depends on the source of the data i.e. does it come from an entity with a vested interest in only displaying certain products from certain lenders, or does it come from an independent third party.
Often the biggest determining factor as to what mortgage products a comparison site displays prominently will of course be headline rate. However, this method can be fundamentally flawed from the outset.
Whilst an analysis of the top Savings Accounts will yield a pretty clear picture to the consumer of what banks offer the best rates for their savings (Although even that can be more opaque that it should be!), the subject of mortgages is more complex and relies on factoring in product criteria when offering recommendations to a user.
Many mortgage products have over 170 different criteria within them, and to exclude any of those criteria from your search process can significantly impact the product results that are returned.
Whilst the 1.74% Chelsea Building Society Fixed Rate product might top most ‘Best Buy’ tables right now, a detailed look at the criteria of the product suggests that it is out of reach of what we know to be the average demographic of a large proportion of consumers looking for a mortgage online.
This rate driven approach to product selection actually does few people involved in the process any favours. In the online environment, customer service remains critically important to garnering repeat business and increasing organic traffic.
In a rate driven ‘Best Buy’ table, the lender or broker partnering with the comparison site has to field (and pay for) calls from consumers who have seen an attention grabbing headline rate, but only a limited percentage of those calls actually result in an individual who can meet the criteria of the product. The consumer feels disappointed and alienated that they aren’t able to get the headline rate on offer to others, whilst the lender/broker spends more time declining potential applicants than dealing with those who they know from the outset are likely to meet their criteria. All of which often results in a negative reaction to the brand and the experience of using of the comparison site that directed the user onwards in the first place.
But a change is occurring. Driven perhaps by an increasing interest from the FCA in this sector, comparison sites are seeking to broaden the range of mortgage products that they display, and indeed offer the consumer greater levels of help and assistance in understanding what products are most relevant to them.
By sourcing product data from an independent third party provider, and by providing a genuine ‘Search Facility’ that takes into account product criteria in the results process (as opposed to a Best Buy table approach), comparison sites are able to offer tangible benefits to their users that extend beyond the traditional rate driven approach.
- The user is able to identify products that are relevant to their personal and financial circumstances and are less likely to have a negative experience based on eligibility.
- The Lender or broker partnering with the comparison site is able to talk to an individual who has already undergone a pre-screening process, and is more likely to be able to assist that individual in their goals.
- The comparison site provides a genuinely beneficial service to the consumer, and their brand image is re-enforced.
A November 2012 OFT report indicated that 39% of price comparison website users believed the services on offer to ‘not be independent or impartial’, but elected to purchase through that site regardless. Today’s online consumer may not demand impartiality as much as the FCA would have us believe, but they do value great service, and in the online environment, your biggest competitor is merely a click away.
Perhaps legendary business guru Peter Drucker said it best:
"Quality in a service or product is not what you put into it. It is what the client or customer gets out of it."
