This morning I spent over half an hour on the phone with my car insurance company after I received their renewal notice which had increased my premium by 35%. In the UK this seems to be an annual ritual, you have to waste time on a call centre playing a game with a “renewal specialist” getting them to drop the price rather than lose you as a customer.
This is, to me, a ghastly process. The game that so many providers (including mobile phone companies) play is to keep increasing prices on existing customers while discounting to new ones (and yes, I found a rate on a comparison site for that same motor insurance company for 20% less, crazy!).
It is far, far easier to keep an existing customer by focussing on their loyalty than the cost of acquisition of a new customer.
So, I fail to understand why so many providers of phones, insurance, utilities etc (all the core services we need) do not do this.
Now, one refreshing counterpoint comes from when I switched my utility (gas and electric) provider to Octopus Energy around 18 months ago as they are suppliers of green energy. At that time, energy prices were low and the differential between suppliers in terms of price was very minor. However, as we all know (in the UK) prices started to rocket upwards by Autumn last year and have kept accelerating at rates that would blow your eardrums if you were in a space rocket!
Throughout this period, Octopus has been in email contact with customers to give them their honest and open views on the best approach for them, including giving their opinions on how best to mitigate energy cost increases, whether that be to try to lock in a fixed rate, or, when they were unable to do so due to market price volatility, to stay on the variable rates (some of which are “price capped” by the regulator)
It has been so refreshing to have a company that has demonstrably shown repeatedly that they want to look after their customers and help them, from educating them on their options to adding functionality over and over again to their website for such things as tracking fuel usage by the day.
Honesty builds Loyalty
The caveat to the idea that it is far easier to keep an existing customer is that you must act in a way that continually builds loyalty.
Many factors in this, but honesty is one of them
I’m not saying I’d have stayed with my motor insurance company if their rep had been honest and said something like “look, our business model is based on making money from our existing customers who don’t bother to call to get their rates reduced”, but that alone would have been refreshing.
Yes, I am moving motor insurance companies.
Also yes, I will stay with Octopus Energy.
So, ask yourself what you do to build loyalty with your clients or customers, and, in particular, how open and honest are you with them?