News and views from the automotive industry.
Defaqto – who and why?
Who is Defaqto?
Defaqto is an independent researcher of financial products, focused on providing intelligence to consumers, to support better decision-making. At its heart is the UK’s largest retail financial product database – which it maintains by collecting data from across the whole market. Using its expertise and insight, it analyses this data and makes it comparable. From this, Defaqto creates a range of products and services to deliver this information in a meaningful way. Defaqto’s Star Ratings support people’s financial decision-making process by helping them see, at a glance, where a product sits in the market in terms of the quality, comprehensiveness of the features and benefits it offers. Through Star Ratings, Defaqto does the hard work by assessing and analysing the key features, benefits, and terms and conditions of every Star Rated product or policy. It independently rates products across more than 50 different categories, giving each a 1 to 5 rating based on what it offers.
Why use Defaqto Star Ratings?
As one of the leading independent rating services within the financial industry Defaqto Star Ratings provide a completely unbiased quality assessment that people can trust. [blockquote]Tim Heavisides, Chief Executive Officer at Car Care Plan, says: “Using the Defaqto â€˜Star Ratings’ we can quickly illustrate the quality of our products in an already crowded market place. With the potential changes from the FCA expected over the next 12 months along with the emergence of online providers (in particular price comparison sites) it has become more and more important for dealers to ensure the quality of their products is easy to communicate and the benefits to their customers are clear.[/blockquote] Defaqto Star Ratings allow us to take our products to market with the confidence that they offer a quality proposition to the consumer.”
Why are Defaqto Star Ratings important to dealerships?
Today’s consumer has many different channels at their disposal when researching or purchasing products and services. The emergence of digital channels, in particular social media, combined with recent market issues around PPI, means that today’s consumer is not only a lot more informed about products, but they have a wealth of information at their fingertips, and may be more cautious when purchasing financial products. Combine today’s more cautious shopper with the rise of price comparison sites and suddenly the market place starts to look like a very competitive and crowded environment in which to operate. Whilst cautious consumers and a crowded market place could pose a threat to a dealer and their sales opportunities, they can present an opportunity. Consumer’s focus begins to switch away from just price and gravitates more towards a combination of price and quality. [blockquote]Mike Powell, Insight Analyst for General Insurance at Defaqto, says: “We always suggest that when people choose their motor gap insurance they should focus on the quality of the policy and what it provides. We independently rate motor gap insurance policies from 1 to 5 Stars, based on the comprehensiveness of the features and benefits they offer. A 5 Star Rating is evidence that the quality of a policy is among the highest in the market.”[/blockquote] This shift in focus will help to eradicate poorer quality products that can clutter the market place, and allows the genuine products that provide real benefits to consumers to come to the fore. However, these industry changes will ultimately place a demand on dealers to review their business cultures and mind-sets to ensure they are ideally positioned to deal with a change in consumer focus. It will become crucial that dealers are able to efficiently and effectively demonstrate the quality and benefits of their products to customers. This is where ratings systems such as Defaqto Star Ratings add a lot of weight to a dealer’s sales pitch. A strong Star Rating from Defaqto will greatly help to increase consumer confidence in the product. Take a little time to review the add on products you are currently selling
- Do they represent value for money?
- Are the benefits clear to the customer?
- Are your salesmen able to convey the quality of the product in comparison to the competition?
- Do the products stand out against the competition?
- Possibly the most important question, would you purchase the product?
If you have answered no to any of the above questions it might be time to review your products and processes.