Tim Andrew and David Ingram both tossed aside comfortable corporate jobs to launch utilities comparison site SplitIt.com.au.
With several other players already in the comparison marketplace, this may seem like a risk, but SplitIt comes with a twist – commission is divided 50-50 between the business and customers that take on new providers.
Having started with the health insurance industry, SplitIt is looking to expand to other sectors.
Andrew spoke to StartupSmart about how the venture came about.
What’s the idea behind SplitIt?
It’s an online marketplace for essential household services, where we split the commission we get from providers 50-50 with the customer.
We have health insurance on the site now and there are probably another half a dozen industry verticals coming up in the next 18 months, such as energy, mobiles, credit cards and other insurance.
People are spending an average of $20,000 a year, per household, on all the things they’ve got to have, such as energy, credit cards and so on. This cost is increasing and it’s causing people to shop around, which are being talked about a lot in the media at the moment.
We’ve tried to find a solution with the commission split that is rewarding for all parties. We act as the sales fulfilment part, not just the lead generation part, so amounts are reconciled at the end of the month.
What kinds of savings are we talking about here?
The site performs as broad a comparison as possible so that customers can get the best deal. It’s different from the likes of iSelect, which will just compare two or three providers that will pay a commission.
The savings are around $200, but can be as much as $600 on some policies. For energy, which will be coming up next, it’ll be around $50 to $100.
For consumers, it’s a bit like getting a birthday card with $50 in it from grandma. It’s guilt-free money, which has a very strong emotional pull for people.
What is the industry reaction to this?
The industry is used to having a broker, but this system allows them to see exactly what competitors are paying. This can help them gravitate towards a market segment or geographic area that they want to focus upon.
It’s an acquisition roll for companies. The industry is actually nudging us towards this model as it gives the industry control over commission and their cost per acquisition. It’s much more industry-aligned.
The energy industry actually wants to shake up the order of things. They don’t want money to be churned and the only beneficiary is the broker.