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How to use data from aggregator sites for competitor analysis and customer retention

27th Aug 2014
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In the past, looking for the best internet provider with the cheapest deal would have meant trawling the internet searching for deals, and then going to the individual provider’s websites to see if they had a better deal. And then came aggregators, who could do all of this for you in a single search, looking at dozens of websites, all at the same time.

But what if companies could use the type of data that is provided by aggregator sites, and use it to gain market share and competitor analysis – as well as ensuring we are pricing our packages effectively compared to the rest of the market?

Traditional CRM models tend to be fixated on the customer in terms of customer value, preference and segmentation. But the traditional model tends to miss one vital element: the competition. Because of this, even the best CRM campaign tends to waste money when it doesn’t have too, saves money when it shouldn’t and lacks differentiation.

At this point, I’m sure many marketers are saying “but I already have data on my competitors”, which is probably true. But traditionally, market intelligence involves qualitative research, comparison tables and competitor creative – focusing on a handful of key products and on price, without acknowledging the plethora of features within this. Ideally, companies require a database which gives them a definitive view of all the packages on offer throughout the UK, including the variables within each package and the exact price of each including promotions, not just for this year but the last three. This is ‘competition data’, and is newest string to the Big Data bow.

Simply put, competition data is the information on price and feature variables for all the packages which exist in your particular sector within the UK. Algorithms would then identify the relationship between price and features to create a “model price” i.e. how we would expect the market to price a package based on its features. From this, a 'pricing competitiveness index' would then be created for each package, showing the ratio of the actual price to the model (expected) price. This offers two major advantages for both customers and businesses:

  1. It provides a regular and objective view of relative pricing across every package on the market
  2. It delivers real understanding of what features are driving pricing across the market.

By implementing a pricing model, companies would be able to audit all packages within their industry to identify anomalies, pricing opportunities and trends while also being able to provide real-time evidence for the decision-making process in proposed price changes. New products or packages will be able to be priced accurately and it also provides a way to support legal and regulatory pricing analyses. Of course, this is all means better deals and fairer pricing for the end consumer. Companies can accurately and truthfully say that they are providing the best market price based on the customer preference.

There are four myths about competition within the UK which is perhaps why companies become lazy in their competitor analysis:

1. Competition is simple

We’re educated by the High Street when it comes to thinking about a brands’ pricing position: this is the expensive M&S one, this is the cheap Lidl one. However in industries where a brand may not have all its product in the ‘shop window’, you find some very fragmented behaviour – a brand is an M&S one minute and then a Lidl the next. However because the focus is myopically on the top products, this can be missed.

2. Competition is fixed

Everyone has a keen interest in the latest promotion or product, but this can mean the bigger/overall trend is missed. Without changing its promotions a brand can significantly change it competitiveness by applying the promotion to more of its packages, retiring uncompetitive packages or applying by adding features. Again, traditional comparisons will miss this.

3. Competition is uniform

In industries such as broadband, home phone and TV – geographical location is a big consideration in terms of competition. By understanding what competitor packages are available in particular areas, you can work out the vulnerability of your customers. This will affect what you are able to offer the customer and what price makes sense.

4. Competition is just about competitors

The competitive lens will change depending on the consumer type it is being sold. Combining the competitor data with customer data can quickly reveal the ‘rate tarts’, who move around despite being on a highly competitive package versus the brand loyal who stay with you irrespective of the competitiveness of their package.

Customer retention and acquisition remain a core marketing objective for the majority of companies, and a deep understanding of those competing for the same customers means you will have a higher success rate. Competitor analysis goes far beyond identifying the top five packages in your sector. Understanding that your competition is not as simple, uniformed or fixed as you presume will ensure you can go to market with the most competitively priced product or package, without losing money where you don’t have to. This all means a better deal for both your business and the end consumer, who will benefit from accurate information and the best deal provided to them, all at the most competitive price.

Vladimir Radivojev is data director at Simplify Digital. Dougy Watt is director of professional services at Occam.

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