We believe that building great relationships is increasingly imperative for brands to thrive. Positive, ongoing dialogue is at the heart of personal relationships, and similarly important for brands and businesses.
It’s a sad reflection on many service brands that their automated call-channelling includes the option “if you’re considering closing your account…” The caller is transferred (more quickly, in my experience) to a dedicated team, probably selected for their excellent customer service skills and their ability to take abuse.
The dismal experience I had renewing both Home and Car insurance recently prompted me to check if this was just something with these specific companies. One post on my Facebook wall later and it became clear it’s much closer to standard practice than an isolated incident.
- Searching for just one quote proved to be over £140 cheaper and indeed a better policy. When I asked my current provider why they were charging their current customers so much More Than their competitors (without mentioning a price), they didn’t even try and retain me.
- A colleague was disappointed with their car insurance renewal, so used their exact same details to apply online to the same provider. The quote was 25% cheaper.
- A friend decided to try haggling with her provider, challenging them with an entirely fictitious competitive quote, and she managed to save herself more than 30%.
This approach to customer relationships seems enormously inefficient. Whole systems, operating rules and pricing procedures have to be developed purely for the purpose of fighting to retain disappointed customers. Whole teams of people are devoted to it, all day, every day. It must be a dismal job scraping and apologising to people who are disappointed or just plain angry with your employer, and often having little or no control over what you can do to help them.
It creates significant negative word of mouth. Whether through personal recommendation or the plethora of price comparison and personal finance forums, there’s such a weight of evidence that you must be a fool to accept any renewal letter at face value.
The lack of transparency and the counter-intuitive pricing (why is it cheaper to be an unknown risk than a long-standing claim-free customer?) result in a growing cynicism that is immediately apparent from a simple Twitter Search for “renewal quote”. Here are a few examples…
This devalues the whole category, as by far the most important variable becomes price. Most customers don’t expect they will have to make a claim, so even customer service isn’t important, and they increasingly don’t care if they switch brands after 12 months. There seems to be no craft or value, no clear explanation why the policy costs what it does, so customers become alienated from brands.
Companies claim to value their customers, but then make them jump through hoops or even seem to deceive them. When customers don’t feel valued, and can’t see the value in what’s being provided, this is a pretty fundamental breakdown in the brand ‘relationship’. Indeed, there’s no relationship at all.