The Cost of Loyalty:

One of our advisers recently commented on just how pleased he was when he looked around for a new electricity and gas provider this year. The saving he received in comparison to his renewal quote was, by all accounts, substantial. It’s a scenario we see all too often. In fact, we have blogs telling people to always shop around for this very reason. But why has this become necessary? How have we found ourselves in a time where loyalty is, in fact, punished.

In the past, loyalty was rewarded. As an existing customer, you could expect perks for your valued continued custom. Not so much today, Instead, the reward seems to come through your perseverance with a cost comparison website. Let’s face it – you have to jump through hoops. First, you have to find out how much your current provider intends to charge you this year. Then you have to compare it to what their competitors will charge (for the same service) to get you on board.

Just recently, the renewal lapsed on some jewellery insurance I’d taken out for my engagement ring. In a panic, I phoned to have it reinstated and to have another ring added to the policy (no – I didn’t buy it for myself). I was told that I would have to sign up again… you know the spiel. But here’s the thing! It cost me less, with said ring added as well, than the price of the original renewal because I was classified as a ‘new customer.’ It was a valuable lesson learnt. Next year, I shall be deliberately letting the renewal lapse so that I can throw my loyalty to the wind (if only for appearance’s sake) so that I can benefit from the super-duper new client offers of next year.

A shift in society’s approach to ‘Loyalty?’

All jesting aside, this marks a sad change in the way society is being made to think – and in the way businesses operate. People have always learnt how to ‘dodge’ any systems put in place. But, the treachery against loyalty is simply making it an expectation. The ramifications for the world we live in, where honesty, integrity and decency have meaning, are being undermined at the most basic level.

Why must we shop around for the best deal rather than just being offered it to start with? I actually posed this lately to my car insurer when cancelling my renewal policy in favour of a cheaper (same bells and whistles) policy. The client relations manager I was speaking to wanted to know why I wanted to leave. When I said I had found the same policy for far cheaper than the renewal price (which had miraculously doubled with them on prior year), they were confounded that I hadn’t phoned to see what they could do on price.

The Take away Message

It seems that the bartering process is now the norm. We’re expected to haggle for our insurances and services to get the best price. Why? Insurance and service providers know that in today’s fast-paced world, time is precious. How many of us really have the time to be phoning around finding out the best price? Who has the patience to jump through the numerous questionnaires required to find one price? How many of us just go with the renewal price because we simply don’t have the time, or energy, to jump through the array of hurdles? Yet this is precisely what is being banked upon!

So, the next time you get a renewal notification, ask yourself what the true cost of loyalty is? And for those insurance and service providers out there, please take a leaf out of our book. Transparency, honesty and fair price from start to finish really do make you stand out from the crowd.

 

As always, if you would like to speak to an adviser, please do contact us on 01243 767 469. Alternatively you can email us from our contact page, and an adviser will be in touch!