True Business- real life for small businesses

There’s a war going on out there. And it’s happening right in front of your eyes.

Strangely, the main protagonists of this epic battle are, amongst others, an opera singer and a family of russian meerkats.

I’m talking, of course, about the insane level of competition between price comparison websites. Ask yourself this: when did you last see an ad-break on the TV without an ad for a price comparison website included in the three minutes? I have been trying unsuccessfully to find out exactly what the ad-spend of the main players in this market is; but I will gladly hazard a random guess and say that price comparison websites are currently the difference between life and the Emergency Room for ITV right now.

What’s interesting for us as small business owners is what we can learn from this game – because it’s a masterclass in branding.

The first player in this market was by Moneysupermarket.com. It’s no surprise that they introduced themselves in the most powerful way possible: their message was “We can save you cold, hard money”. Not only is that a very powerful message, it was also the right one: many people didn’t know what a price comparison website was, so it was pretty crucial to keep the message simple. Since their message was about cold hard cash, they were fronted by a cold, hard, canny, cash-conserving businessman: Peter Jones from Dragon’s Den. Look at the colours and surfaces in this ad- even they are cold and hard.

Next to arrive was Confused.com; and they had to find a way to differentiate themselves from Moneysupermarket. That’s a tall order: financial services are notoriously hard to differentiate from one another. Could you really separate two pension providers in a 30″ TV ad? That’s why Scottish Widows spend so much time putting a glamorous lady in a black hood on a rocky outcrop – even though she has nothing whatsoever to contribute to your in-depth knowledge of pension products.

Well, Confused.com did manage to differentiate themselves. If Moneysupermarket was all about saving money, Confused was going to be all about being friendly and helpful. The service is almost identical, indeed indistinguishable to the untrained eye; but the brands are miles and miles apart. Instead of cold, hard Peter Jones, Confused customers (even the name says ‘it’s OK not to understand financial services – we’ll help you out’) get to see… each other; in cuddly family situations. It’s all about being safe and friendly.

The problem for the companies that followed was that there was no genuine new ground to stake out. Moneysupermarket owned the “saving you money” pitch. And Confused owned the “Friendly and helpful” pitch. What else can you do? Nothing. There’s nothing else interesting about price comparison websites. The newcomers couldn’t claim to be a better service (they all have about the same number of comparisons). What to do?

Well, both ComparetheMarket.com and GoCompare.com initially just tried to set out their stalls in a very straight way. Do you remember these early efforts?

But then both companies realised that they were merely acting like pale imitations of the existing market leaders. Something had to change. And that’s when all hell broke loose. With no other way to differentiate themselves, both brands realised that they had to compete through massive marketing spend, and make the marketing itself a differentiator.

First out of the blocks was ComparetheMarket; whose ads were sufficiently successful that meerkat soft toys are now on sale (thanks for the lesson there, Churchill) and “Simples” is now recognised by the Oxford English Dictionary. The ad I’ve chosen here is particularly smart because we’re even getting surreptitiously taught the jingle. I have no idea what CGI graphics cost these days, but their current ad is as epic as Lawrence of Arabia, compared to most other TV fodder. Clearly there’s no shortage of cash in the marketing budget.

Anyhow, Mr Orlov (very few characters in ads end up popular enough to have names) soon had some competition. In the pure marketing war, GoCompare needed to pull something special out of the hat – and they did. A recognisable character (and yes, he really is an opera singer), a good dollop of humour, and above all a jingle so insidious that you’ll want to bang your head against a wall. Utterly memorable – and even appreciated by older viewers, who will instantly recognise the song as a parody of the wartime classic “Over There”.

I tell you this. When Marketing magazine voted the Gocompare ad the most irritating ad of 2009, the ad’s creator (Chris Wilkins, also the man behind Sheila’s Wheels) should have cracked open the champagne. His work was done.

And there our tour almost ends. The lesson for smaller businesses without deep pockets is simple: stake out clear territory. Differentiate yourself from other players. Because if you don’t, you’ll end up competing on marketing spend alone. And that’s very, very expensive indeed.

I say that’s where our tour almost ends. There’s one more twist in the tale. Surely Moneysupermarket is happily still at the top of the tree? They were first in, and they surely own the corner of our minds which wants to “save money”? No, sir. Nothing in marketing stands still for long. The threat of the newcomers has been so strong that Moneysupermarket has ditched Peter Jones, and is now being forced to compete with the others by being memorable. Hence the new slew of ads featuring the highly memorable and popular cockney Iranian (I thought I was the only one) Omid Djalili:

Yup, even when you’re Number One, the competition is always snapping at your heels.

Rest assured, this is a fight to the death – this level of marketing spend is not sustainable forever (and probably serves to remind us how much money in financial services goes on sales rather than actual product). But I digress – the lesson is there for everyone: find your pitch. Protect it. Own it. And do anything you can to avoid a war based on marketing alone; because it’s bloody, drawn-out and wasteful.