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Chapter 2 E-commerce fundamentals
provide no real extra reach – at least nothing compared with aggregators’ ability to display an insurer’s prices to all its visitors.
From that point of view, cashbacks are just glorified online directories, so basic in fact that they need to incentivise people to visit them and give away listings’ impressions to
merchants in order to generate business. Cashbacks are important because they have found the single proposition that consumers value over convenience; hard cash.
I see cashbacks as competing with, rather than complementing, comparison sites. Savvy consumers are already making comparisons on the aggregators, then heading
off to Quidco to make the purchase. This behaviour threatens the long-term sustain- ability of the price comparison sites in their current incarnation, as well as opening the
door to interesting opportunities for cooperation and cross-pollination among them.
What is most interesting to me is the social media potential of cashback sites. Cashback sites work with their customers purely on trust. This trust is generated via tools
such as merchant ratings, discussion forums, blogs, etc that allow users to weed out the bad merchants and promote the good ones. An active community of users poten-
tially recommending your brand to their mates for immediate purchase? Who wouldn’t want a piece of that?
Q. How are retention rates working out for customers referred from comparison sites, affiliates, search, cashback sites etc?
Roberto Hortal, MORE THN:
It’s been widely reported that retention rates for customers from channels which prime price over value are lower than average. It’s not
just the channels themselves; the barrage of insurance advertising people are constantly under is helping educate people about the potential savings to be had by churning.
From my point of view, lower retention rates are largely a long-term trend of our own making. Car insurance, much like mobile phones, is largely a saturated market and
companies grow their books primarily by taking others’ customers. Aggregators and cashbacks have certainly accelerated this trend and making it
even more urgent for the industry to find a way to reinvent itself so that either this long- term trend is reversed by aggressively rewarding loyalty, perhaps or the industry
adapts to provide the shorter-term products people seem to prefer these days. What proportion of your sales is being generated through the web, and can you
break that down by channel eg affiliates, comparison sites etc? I am not able to give a precise figure. However I will say that eBusiness that’s
what we call the aggregate of Direct Web and Aggregators at MORE THN is our main sales channel.
People have clearly adopted the internet as their preferred option when it comes not just to research, but also to purchase of general insurance, and we’re clearly seeing
this ourselves.
Q. How does online acquisition compare to offline in terms of cost? Roberto Hortal, MORE THN:
While individual channels’ Cost Per Sale vary, and it could be claimed that online channels tend to carry a lower ‘last click’ CPS, the truth
is that offline spend contributes massively to creating awareness and driving searches, direct visits, affiliate clicks, etc.
I am not convinced that talk about ‘online costs’ and ‘offline costs’ contributes much. I prefer to spend my energy trying to find a good model to split each sale’s
attributed value proportionally to every single activity that, over time, contributed to this individual customer finally making a decision to purchase our product.
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Q. Are there still a lot of consumers out there that research online but convert offline?
Roberto Hortal, MORE THN:
I’m not seeing a lot of those cases anymore. People did display that behaviour years ago but most are now familiar and comfortable with
the internet as a distribution channel. People are also aware of the many ways in which merchants, payment providers and regulators protect their online transactions. Indeed,
it seems to me I’m better protected when shopping online – from disreputable merchants – than offline.
We do see consumers doing research on price comparison sites, then visiting direct and getting a quote before they eventually buy. That figure is made up of early adopters
and is rapidly decreasing as well, on the back of familiarity, trust and changes by the price comparison sites which mean that prices displayed are more accurate and less
likely to change now.
Q. Are you doing anything to move away from the last click wins [attribution of sale to the last referrer to a site discussed in Chapter 9] model?
Roberto Hortal, MORE THN:
As I’ve already mentioned a couple of times, this is a priority for me. I believe finding such a model could be a huge competitive advantage
for a marketer. We’re working hard internally and with our agencies to develop and test various approaches to a much more complex way to attribute sales to the ‘marketing
value chain’, with some success so far although we’re still well into the journey.
Q. Are you looking at other forms of online marketing like viral? Roberto Hortal, MORE THN:
I’m always looking at opportunities to do things differ- ently. We did an interesting thing with viral last Christmas where we bridged online and
the real world. Our Personal Customer Managers emailed customers to let them know of our Christmas opening hours and included, as a little present, a papercraft model of
our MORE THN wood people, the ones featured in our ad campaign.
The models could be printed, folded and glued into Christmas decorations. We had quite a few downloads and I’m sure we made a few people smile. Some may have even
decided to stay with us.
Q. Can you talk a bit about Living, your green social network; the reasons for its launch and the challenges of execution?
Roberto Hortal, MORE THN: Living is our main social networking activity. We’re not
new to social networking by any means – we’ve been successfully running PetHealthcare.co.uk, a community and forum for Pet owners, for a number of years.
In the spirit of MORE THN, We Do More, last year we started looking for more opportunities for MORE THN to enable conversations around other topics of interest
to our potential customers. We commissioned iCrossing, our SEO [Search Engine Optimization, explained in
Chapter 9] partner, to use its Network Sense methodology to map the networks of topics and conversations where our product, brand or site featured as part of the
discussion. This work identified a gap that we could step in to fill – we couldn’t find a neutral, authoritative, trusted and consumer-friendly space to discuss practical issues
around how to live greener daily lives.
If it was to succeed, the site had to be genuine: countless companies have tried and failed to infiltrate the social space remember Zuzzid? when the only workable
approach is to contribute and share freely. To be genuine useful. To really participate. So we set it up using the tools that most bloggers use Wordpress and plugins,
gave it an independent voice the writers, all professionals, are completely independent
Part 1 Introduction
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