My attention was caught by a current news item about individual consumers being led by price comparisons sites towards what someone wanted to sell them (for a commission) rather than what was necessarily the best energy deal for them.
Doing the maths; and considering that nearly a third of consumers now use the websites concerned to switch suppliers – those of us at SpringTide towers wondered how much “cost” this all amounted to. Even more so: what if this were whole companies being driven none-too-subtly towards missing out on incremental gains?
What experiences can you share and what can those in B2B learn from this B2C story?
“Be careful what you click for” seems to be the message underlying the current controversy over comparison websites that “guide” consumers to the best energy deals. One of these sites – accused by a rival of “hiding” better rates on offer in favour of suppliers who pay them commission – has a reference to “confusion” in its well-known web-address. That seems increasingly appropriate when you look into what’s apparently going on.
One click makes a big difference
It boils down to whether a consumer selects Yes or No when asked if they’re ready to switch “Today”. Clicking Yes filters out all the deals on offer that don’t earn the website a commission. According to the complaint from rival site “The Big Deal,” it’s only when a visitor clicks No that they are shown other, potentially cheaper, deals.
If the idea of unfair comparisons between comparison websites wasn’t already enough to have you scratching your head, wait till you hear the response from MoneySupermarket’s editor in chief, Dan Plant: “The option for customers to filter results – to only see products they can buy through MoneySupermarket.com – is displayed clearly and prominently, and is necessary as some providers choose not to list products on comparison websites.”
Meanwhile, Confused.com‘s head of energy, Kate Rose, said: “Some suppliers do not make certain tariffs available through comparison sites, so we give customers the option to exclude these from the results.” Let’s rephrase that: “We kindly offer customers the chance to avoid seeing better deals.”
The Big Deal also said that some rival comparison sites don’t even show the question of “switching Today” – which makes it even harder for consumers to find the best deal: with almost a third of available offers subsequently getting hidden.
There’s much that is unclear about all this, to put it mildly. Whatever the motives, it seems that some “simplifications” and “shortcuts to a decision” actually herd shoppers away from transactions that could better suit their needs: at worst, it amounts to concealment masquerading as guidance. Attempts to clarify options lead to unfathomable responses that further obscure what should be the main objective: get someone the right deal for them.
How familiar does this sound in the Supply Chain space? How easy is it to get a full, unbiased market picture? How often do our Procurement readers find themselves herded, or blinded with science?
Consumer procurement tool of choice
Back at the comparison site situation: The Guardian investigated in some depth and found that the savings being missed across the board were usually negligible, a few pounds or even pence at a time – with the caveat that this applied only to the deals they compared on that day, with the possibility of greater discrepancies at other times. The only solid conclusion was that none of the sites involved were being entirely open with the “help” they were giving consumers.
What is clear, then, is that something’s not quite right in that particular part of the electronic market. And yet the comparison sites are apparently the “procurement tool of choice” for energy consumers!
Recent Ofgem research found that more consumers than ever were using comparison sites, with 31% of switchers using a comparison service when they changed energy company (up from 26% in 2013).
Mark Todd, of independent comparison site energyhelpline.com, said of the findings: “Customers are right to be using energy price comparison sites rather than going to suppliers to switch their energy. On a price comparison site, a customer can get a full market view in just a few minutes… it’s a no-brainer to save time and use a comparison site.”
Well, as we’ve seen, customers are not getting that “full market view” consistently. They don’t seem to mind, though.
Ofgem senior partner Rachel Fletcher seemed similarly enthusiastic: “Price comparison sites are a great tool to use when energy shopping, and it’s good to see more consumers using them” – although she did add: “However, consumers quite rightly want to know that recommendations are trustworthy, and the Confidence Code badge is a quick and easy way to check that the information is independent, accurate and reliable.”
Trust, “accuracy” (and their counterpart: honesty): surely vital ingredients in any supplier-customer relationship! We all know, and usually avoid, sales tactics that offer a discount to sign up Now. On the other hand, we all cherish those suppliers who take the trouble to find out their customers’ needs and give them the best solution – “ Helping people to make the right buying decisions.”
Whichever way you look at this, none of the above is particularly making it easier for people with a specific purchasing mission to get reliable information, let alone achieve best value for their investment. It’s hard for the public to do “Smart Purchasing,” basically.
At SpringTide, we’d struggle to call any of the above Smart Procurement. Yes, we’re talking about the consumer market – B2C; but how many of us in the B2B space hear bells ring when we read about the challenges of individual energy-shoppers struggling to make the right purchase for their current (Today!) and future needs?
How would you feel if you found you weren’t getting the complete picture, or an over-complicated or slanted one – has that happened to you?