By Dan Ilett, 13 June 2006 10:50
NEWS
Financial services companies are blocking price comparison websites from publishing their product information because they fear coming bottom of the league tables.
Companies are using IP blocks to prevent websites from grabbing their data and using it to show consumers which company has the cheapest product.
Martha Bennett, vice president at analyst Forrester, told silicon.com: "I know they block them. Companies don't want to be driven into this price competition."
The technique used to grab the data is called 'screen-scraping', which does the donkey work for users by displaying information from several websites in one place.
For example, in order to compare insurance quotes a user has to type in their information just once and the screen-scraper will bring back results from 20 companies.
One price comparison website, moneysupermarket.com, confirmed some brands have taken the decision "not to engage with any aggregators".
A spokesman for moneysupermarket.com said: "Some of them refuse to be compared. They can block the IP. Without a doubt comparison is here to stay. They have to learn to live with that.
"In the early days quite a lot of providers were firmly against it. But people have realised we are going to do it. It can be a little uncomfortable for them. One or two companies have [blocked us]. At one point we though this could be a major problem."
Forrester's Bennett added: "The companies that block don't really stand to gain. You have to say to them 'sorry guys but the industry is changing'. For simpler products consumers are increasingly getting more competitive deals if they know what they after.
"Companies should make sure they make some information available. Consumers might know your brand name but wonder why your name never comes up on a comparison search."
Comments
There are 3 comments. Join the discussion
1. Carel Kriel
It is surprising to see that there are companies out there who still believe it is possible to sell an uncompetitive service by hiding information. Those days are gone forever.
Blocking price comparison websites is the worst thing a bank could do. Customers using these websites are ready to do business - prime candidates. They will almost surely choose among the list presented. Being on that list, even if you are not the best, is better than not being seen at all.
The only way blocking will work is if ALL the banks co-operate to block price comparison websites.
2. Ainsley Ward
Price and service aggregation sites are a real problem in many sectors, not just banking.
One of the key reasons to bring potential customers to your website is not just to sell the service that they are looking for at that time, but also to allow them to see your entire portfolio with a view to cross-selling at a later date. The investment made in corporate websites is considerable and the value that they bring is eroded by aggregators that are making revenue by disintermediating the true service providers.
It may seem better for the customer in the short term, but many basic services are sold at a low margin to draw in customers for the other parts of the business that bring the profits. If potential traffic is taken out of this sales channel, then the net effect will be a price rise in the basic services - consequently as the aggregator preys on consumer laziness, it is the consumer that will pay in the long term.
3. Colin Thomson
The companies that block don't seem to realise the psychology. Any potential customers who don't see a particular brand name will automatically assume the product was too expensive. The companies will get a reputation for being pricey.