Platforms that aggregate market information have helped tech entrepreneurs to cut through the domination of the older players in the consumer space, putting the power firmly into the hands of the buyer. That shift is now disrupting the business-to-business space, says Daniel Abrahams.
From Skyscanner, Expedia and Kayak for the travel industry, through to GoCompare, Confused.com and Compare the Market for insurance, comparison sites have rocked the boat in the consumer marketplace.
The media industry has also been affected, with sites such as HackerNews aggregating online content. We now live in an era where big companies can no longer rely on brand loyalty alone to draw in customers.
Through the initiative of aggregators, it is cost, public recommendations and convenience that have become key decision factors for consumers, rather than the notoriety of a household name, and well-known companies have had to adapt to survive. The change being forced by tech innovation is both right and inevitable.
With the consumer space successfully disrupted following the explosion of price comparison sites in recent years, the market is now ready for business-to-business (B2B) aggregators. While brand will continue to play an important role for the business community, as companies seek to ensure they are working with stable and trustworthy partners and suppliers, the general lack of transparency in several sectors has created a receptive audience for aggregation platforms.
We’re seeing a huge wave of innovation and VC funding in the B2B aggregation space, through the rise of peer-to-peer disrupters and aggregation platforms. Madison Logic, for example, aggregates ‘intent data’ for marketers, while All About Savings compares business utilities and Telecoms Supermarket is similarly shaking up the B2B telecoms space.
Industries that have traditionally held customers hostage with hidden fees and opaque rates tend to be first on the aggregator hit list. For this reason, banking services are in the firing line as news stories bring to light the price gouging and other poor professional practices of a number of traditional finance players, who continue to take advantage of brand trust.
Typically, currency has proved to be one of the most opaque financial services in existence, with businesses struggling to achieve clarity when hunting for competitive rates.
Banks and financial institutions have long been able to rely on goodwill, customer inertia and brand reputation to pull in customers, rather than offering the best rates. Even when competition brewed between banks and non-bank foreign exchange brokers, they tended to offer honeymoon rates to attract new business customers, before hitting them with huge fees once the trust is secured.
Today, however, businesses are wising up, doing their own research and working out how to save money when checking out exchange rates. Following in consumers’ footsteps, businesses are learning to pay for value over brand.
In any industry where there is inefficiency, you can bet there is a swarm of tech entrepreneurs waiting in the wings to disrupt it.
Back in the consumer space, hotels are a perfect example, with the likes of Airbnb challenging the antiquated way we once viewed booking accommodation. Why stay at an overcrowded and overrated five-star hotel when you can book a private home armed with exceptional reviews for twice the luxury and half the price?
The names Hilton, Sheraton and Four Seasons do not hold the same clout as they once did, and Airbnb is reaping the rewards, with its reported valuation recently soaring to $10 billion – $2 billion more than luxury hotel chain InterContinental Hotels.
Big brands relying on old-school customer loyalty should realise that in the age of the tech entrepreneur, their antiquated offering simply doesn’t compare.
Daniel Abrahams is the co-founder of international business payment quotes startup CurrencyTransfer.com