Comparetheware Highlights
- Opens a comparison site for IT purchasing
- Generates qualified leads priced at £25 each for resellers
- Charges suppliers £5k per year for basic inclusion, more for premium status
- Will open to users in a few months time
- Borrows techniques from consumer financial comparison sites
- Needs strong momentum to build critical mass
- Is a genuinely new go-to-market approach for the IT business purchasers
Comparetheware is a new service aimed at giving UK IT purchasers a trusted portal to help with the selection of products and resellers. It has been developed by Craig Moody and Mike Worby, with funding from Computerlinks. It is in the process of recruiting suppliers and resellers and due to go live for customers in a few months time. We recently caught up with Craig and know you’ll be interested in reading about an approach which borrows much from successful consumer comparison sites and signals a new direction in IT selling.
A Go-To-Market Approach Borrowed From Financial Comparison Sites
In the UK consumer sites such as comparethemarket.com and moneysupermarket.com have become very widely used for buying insurance. While a few companies, such as Direct Line Insurance choose to remain independent, buying financial services through Web portals has become the norm for millions.
Comparetheware believes that it can leverage the trust consumers place in these purchasing activities and apply it to the IT industry. It will make its money from suppliers, who can buy a basic annual subscription for £5k and from resellers, who will be charged £25 per lead for those they choose to accept. Both suppliers and resellers can spend more for enhanced services, which include highlighted positioning on the site.
In its research Comparetheware found some interesting facts about how users acquire IT products. In particular:
- 70% start by using a search engine
- 80% of their searches are ‘informational’
- 65% have problems finding the information they need when looking to select a vendor or solution
- 40% report that the lengthy time taken is a problem
- 39% find the information unreliable
In addition each buyer has unique needs and opinions. Its intention is to create a trusted site in which different offerings and resellers can be evaluated easily and from which informed purchasing decisions can be made. Customers are required to register relevant details in order to receive quotations.
Lead Generation – Expensive And Squeezed In A Recession
We believe there are around 25k resellers and other channels selling IT solutions in the UK. The emphasis of their business is shifting from physical to virtual distribution, with their ‘value add’ evolving from their physical location towards demonstrated expertise in supporting customers in specific industry sectors and company sizes. While all software distribution can now be handled easily through the Internet, customers need resellers to support the implementation of products and the setting of good policies for use.
Initially Comparetheware.com is focusing on security software – an area in which there are not only many differences in approach, but also significant support requirements. In our discussions with suppliers and channel we have discovered that lead generation is very important. Traditionally vendors spend great efforts in supporting the selling of their offerings through the channel (for an example – see our analysis of Symantec’s approach to small businesses). The success of the channel itself is based on qualified leads, which can be expensive to generate – irrespective of who pays for it. Badly managed selling processes can lead to conflict between supplier and reseller, and/or between resellers and in delay and confusion for customers.
Comaretheware.com is not intended to replace existing channel management for existing software suppliers – rather it sees itself as a low-cost complement to traditional approaches. Internal channel conflict is minimised by the choice of up to three potential resellers by the customer, which also fulfils the requirements of many organisations to get a minimum number of quotes for each purchase.
Once a customer selects its prospective reseller, the details are put in a holding queue before a summary is sent to the chosen resellers, who pay a fee to get the full customer details. They will be able to access live chat and will be able to cut down the time to request proposals with the ‘five minute tender builder’.
Future Offerings Include Cloud Services And Virtualisation Software
The initial focus is exclusively in security software and it has already signed up a number of suppliers including CheckPoint, F5 Networks, RestorePoint, ClearSwift and RSA. We believe that reseller recruitment has been somewhat slower.
In future it plans to expand its coverage to include networking, VoIP, storage, Cloud services and virtualisation software.
Some Conclusions – A Search For Critical Mass
Comparetheware.com is an excellent idea, with strong theoretical advantages for users, resellers and vendors. The ease of comparison, ability to request proposals from up to three resellers, as well as the simplified tendering process will be attractive to UK IT buyers: the ability to pick up qualified leads relatively cheaply is a low-cost addition to sales processes for resellers, while for suppliers £5k a year is a relatively low cost to add extra breadth to complement their existing approaches. As a user-driven process, channel conflicts can be eliminated – at least within the portal. Comparetheware, as a genuinely different venture, inevitably has a number of challenges, including recruiting enough resellers to provide adequate choice for users initially. It will also need to demonstrate strong attention to the protection of its registered users’ data. Its biggest challenge is building critical mass: in the consumer market comparethemarket.com and moneysupermarket.com spend millions on advertising on the Web, TV and print media. While IT professionals probably make better use of social media in researching their purchases than consumers, Comparetheware will need to act carefully to maximise its opportunities.