Moneysupermarket chief executive Peter Plumb tells James Titcomb why he is not worried about what his rivals are doing
I GET very excited when I look at our business, because people tend to say your competitors are other price comparison sites, but they’re not,” says Peter Plumb, the chief executive of Moneysupermarket, when I visit him at the price comparison company’s Soho office.
“Our competitors are the high street banks where customers haven’t been brave enough not to walk in. Nowadays, I don’t get why anyone wouldn’t use a price comparison site.”
Moneysupermarket has undoubtedly had a good run of late. The company, which compares everything from savings to pet insurance from hundreds of providers, has recently hit an all-time high market value, broken sales records, and fought off an army of imitators. However, the future has not always seemed so rosy. When Plumb, a former Disney and Pepsi executive, took over from Moneysupermarket founder Simon Nixon in February 2009, most of the optimism around the firm’s 2007 initial public offering – the biggest for an internet company since Google in 2004 – had evaporated. Shares were trading at a fraction of the float price, the credit crunch had pummelled the market for loans and mortgages, while savings rates were hitting rock bottom. Meanwhile, investors were panicking about a host of copycat sites that had sprung up.
But after four years in the job, Plumb appears to have dispelled most of these fears. Moneysupermarket has grown revenues at an average rate of 14 per cent in the last three years, and earlier this year the company’s shares finally returned to 2007’s highs, allowing Nixon, who remains deputy chairman, to cash in by selling a 15 per cent stake of the Cheshire firm for a cool £160m.
To restore investor confidence in the group, Plumb has had to see off the threats from an army of imitators – Go Compare, Confused.com et al – the continuing drag on savings rates exacerbated by the government’s Funding for Lending Scheme, and – more recently and perhaps most troubling – Google’s entry into the price comparison market. The 49-year-old puts the company’s success down to cash-strapped consumers now being more savvy with their money, as well as more comfortable shopping around online.
Moneysupermarket – which takes a fee from a provider every time someone buys insurance, savings, flights or one of the more than 50 services it compares – claims to have saved 5m households an average of £200 each, or £1bn in total, last year.
“I think the economic downturn has changed an attitude from spending being cool to saving being cool,” Plumb says. “I don’t think there’s any argument now that actually getting a good deal and saving yourself some money, whether that’s £5 or £500, is something that resonates. But I don’t think it’s the downturn that’s driven us, I think it’s the comfort of using online trusted brands to deliver what you would normally do on the high street.”
Plumb appears unconcerned about the threat from Google, whose Advisor service builds price comparison into its own search results: “Our providers are giving us insight that it’s not a particularly successful tool, customers seem to be valuing the more focused providers who can add a human element, but good luck to them, there’s plenty of market share for everyone.”
In fact, Plumb appears unfazed about what any of his rivals doing, stressing that he is looking to get more people online rather than steal other sites’ customers. “Only one in four [people] switched policies last year, and only one in three did that online, and we’re only a third of that. That’s the really exciting headroom for us.”
CV: PETER PLUMB
Born: Bury, Lancashire
Education: Civil Engineering at University of Birmingham; MBA, IMD Business School, Lausanne
Andersen, management consultant;
Coopers & Lybrand, management consultant
Dyson Appliances, international director;
PepsiCo, sales director and business development manager;
Disney Europe, general manager of consumer products;
Dunnhumby, managing director
Moneysupermarket, managing director, financial services; chief executive