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Chapter 2 E-commerce fundamentals 55

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 TH>N: 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 TH>N) 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 TH>N: 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.