Optimizing "best choice" for consumers

Written in collaboration with Mieke van Os,
Business Intelligence Manager at Independer.nl

Applying conjoint to help consumers make a choice out of a number of alternative products in the context of a comparison site for financial products

Independer.nl

Independer.nl is an intermediary active in The Netherlands. Founded in 1999 in 2000 the website was launched as a "comparison site" for financial products. Primary goal was bringing more transparency for consumers in the offer of financial products in the Dutch market. In 2005 Independer expanded her activities towards the healthcare market as well.

As a "comparison site" Independer.nl is trying to assist the consumer to find out which financial products available on the Dutch market (car insurances, saving accounts, personal loans, mortgages, life insurances etc.) fit their needs best. Independer is trying to compare products not only on price, but also taking into account quality. Based on input of the consumer, a selection of the products is made and presented in the "comparison result page". In the years 2000-2007 we made progress in improving the comparisons by using more and better data. In 2008 we started to use conjoint analysis to further improve the process.

Phase 1: sorting by price or interest

Given the consumers input we only select products that meet their selection criteria (e.g. in case of a savings account, the initial deposit, or other terms like the need to open a payment account as well). The product selection that survived the criteria was initially presented sorted by price or interest. The one with the lowest price/highest interest as number 1. Since interest is just one of the characteristics this is quite a primitive way of presenting the results, leaving out other characteristics such as quality of the product, customer opinion about the service, other conditions, etc.

Phase 2: selecting "best product" by expert opinion

Independer.nl also presents the "best choice alternative" by taking into account more than just interest or price alone. Determining the "best choice alternative" was determined by an algorithm made up by "experts" within Independer. Introducing the "best choice" concept turned out to be a great help to consumers: conversion numbers grew significantly.

Phase 3: selecting "best product" by consumer panel conjoint

Our next step is developing the "best choice algorithm" based on consumer research using conjoint methodology. We started our experiment with the product group "saving accounts". A panel of independer.nl customers was invited to participate in a conjoint study powered by SKIM where the different attributes were involved, among other things interest, customer opinion about the service, channels available (internet, telephone, branch network), etc. Interesting finding of the study was the fact that the importance of "interest" was evaluated as less important by the consumers than by the "independer experts". Initially we used one algorithm to evaluate all alternatives that survived the selection for every respondent.

Our next step was determining clusters of consumers based on the same preference structure. We identified the following three segments:
1. Interest sensitives (mainly interested in high interest)
2. Condition sensitives (besides interest, also taking into account conditions and customers’ opinion about the service)
3. Brick sensitives (appreciating the availability of a branch-network)

After determining the "segment" a visitor of the site belongs to - by asking one or more additional questions in the dialogue towards the comparison results - the right algorithm is used to determine the "Best Choice" alternative.

SKIM's role

According to Mieke van Os "using results of conjoint studies can be a major improvement in the comparison process on Independer.nl. Data gathering and processing was done by SKIM. SKIM is also involved in the process of "teaching" Independer.nl in using and implementing conjoint results in the on-site comparison. We have experienced very good assistance of the SKIM support team so far. Hopefully this is the start of a new era in the history of Independer.nl as the number one comparison site in The Netherlands."

December 2008

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