Published on December 18th, 2013 | by Pete0
Comparing credit cards online – new research sheds light on consumer behaviour
Compare the Market, owned by the BGL Group and one of the leading comparison sites for financial products in the UK, recently carried out a series of consumer focus groups to find out how people feel about home insurance, life insurance, energy and credit cards, and how they approach buying these products. All the people who took part in the study had used a comparison site to buy car insurance in the past, but not any of the above products.
The folks at comparethemarket.com were interested in the reasons why consumers who would happily buy car insurance through an aggregator might be hesitant to do the same for other types of insurance, or other financial products like credit cards. The research demonstrated very different mind sets around different products, leading to insights that could help comparison sites to refine their offering so that customers are more likely to buy through their websites.
Overall it seems that customers need to feel that they are getting a good understanding of each product so they can feel confident in their decision. Recognising that these products are all perceived quite differently by consumers is essential to avoid a one size fits all approach that will leave comparison site users dissatisfied and perhaps even drive them to competitor sites or direct providers. Using a comparison site should make a consumer’s life easier, and when that doesn’t happen custom is lost.
In this article we focus on the insights which comparethemarket.com found around consumer sentiment and buying habits for credit cards. Compare the Market are particularly strong with branding, with Compare the Meerkat leading the way in creative ideas in the sector. You can see by the buzz on Facebook the extent of the love for meerkats.
So as a financial product aggregator, what do you need to know about consumers’ relationships to credit cards? Customer anxiety levels around this product, their motivations for getting a new card and what they are usually looking for in a card are all key things to be aware of.
Of the people who took part in the focus groups, many had bad credit, had been turned down for a credit card in the past or regularly used credit cards for managing debt. For this reason the research revealed a significant amount of anxiety around credit cards. Unlike a product like car insurance which is legally required for all drivers and about which there is a lot of common knowledge, credit cards and money management are very personal and consumers feel less confident that they will make the right decision or secure the best possible deal for their unique circumstances.
This means that aggregators need to ensure they can provide sufficient information and advice about different types of credit cards and the deals they are currently offering. Consumers need to be able to match up their circumstances and needs with the right type of card, and they want to be told information like whether applying for a card through the site could affect their credit rating.
According to comparethemarket.com’s research, many consumers change credit cards quite spontaneously either because they have reached the 0% limit on their current card or because they are drawn in by an offer or reward of some kind; either in store or online. Therefore it’s important to make sure that key information about, for example, 0% on balance transfers or any cashback and rewards schemes is easily accessed when you list the credit cards on offer. This will help consumers figure out very quickly whether they are likely to find a suitable card among those that are available on your site.
Being aware of the mind set customers are in when they apply for a credit card, the possible reasons they may be applying for one and their concerns over personal finance will allow comparison sites to offer a useful and reliable service and become a trusted resource for consumers.