The previous article discussed the purchase of a new television and my impatience when it came to waiting for delivery. I can now report that the delivery and setup went smoothly - in fact, the truck driver actually called to ask if he could deliver it four hours earlier than scheduled. However, there’s another side to the television story—and it brings me to the topic of how well we value our existing customers.
We live in the woods, so there’s no cable for television. We have two satellite choices: Dish Network and Direct TV. We’ve been loyal and fairly happy Dish Network customers for about 10 years—both here and in California. We also spend a bundle with them for their most inclusive package and pay-per-view movies (no video rental store nearby, either).
I went online to the Dish site and saw advertisements for “FREE HD for Life.” I also saw some stipulations to eligibility and verified that we qualified. Fully armed with all the information I could gather, I called Dish to upgrade to a high definition receiver and DVR. After a pleasant conversation with the service agent, she proceeded to say that the HD upgrade would cost me $100, plus a two-year commitment, and a $1 charge on my credit card to guarantee the return of the old equipment.
Now here comes the “rub.” The costs were acceptable on a rational basis, but on an emotional basis I found them unconscionable. Why should I, a loyal and long-term customer who has spent thousands of dollars with them, have to pay anything for an upgrade? I questioned her, but got a scripted response: “That’s the way it works.” I asked if their ad was misleading and she said, “No, it’s not. The programming is free, but that doesn’t include the equipment.” I argued that Direct TV would set me up for free and she replied, “Our packages and prices are better than theirs.” Not wanting to bite off my nose to spite my face, I told her that I would get back to her.
I went back online and checked out Direct TV. Using their site, I built the packages I wanted and the equipment I needed. They then provided a line-item breakdown of the specific costs, new customer discounts, and specials that would apply, and a two-year, month-by-month analysis of what each month’s bill would total, as the various discounts would run out. They also affirmed that the installation would be free. I was impressed by their pricing transparency, and intrigued by the fact that their service would cost me considerably less.
However, because I value relationships, I went back to the Dish site to check what a new customer would see and read all the fancy marketing. When it came down to finding out the exact costs, I had to call. There was no transparency on their site at all. However, I’m persistent, so I e-mailed my concerns and questions, including what I would need to do to cancel the service if I so chose. That was yesterday, and as of today, I haven’t had any response.
As soon as I finish this article, I’ll be calling Dish to cancel and Direct to buy. My loyalty knows some bounds – and Dish pushed me past them.
What does this have to do with insurance? A good example involves a non-insurance client of mine who received an automatic renewal notice from their insurer. The increase was modest, but the market had changed. The existing agent had not re-marketed the account proactively for better premiums. A competitor called on the client and was able to show them a 25% savings over what the renewal had shown. They gave their business to the new agent immediately. When the former agent found out, he called to say that he could have saved them 30%. They simply replied, “Why didn’t you?”
Here are a few questions to ask yourself, your producers, and your staff:
- Do you have a proactive program to maintain contact with your customers?
- Do you expend as much energy in retaining customers as you do seeking new business?
- Do you or your carriers send renewal invoices automatically, and do you keep on top of the premium increases on those invoices?
- Do you shop your customers’ renewals to make sure that they’re enjoying the best value for their premium dollar? (If not, you’re inviting your competition to undermine your relationships.)
- Do you provide annual stewardship reports?
- Do you make a point to let your customers know how much you really appreciate them?
The biggest reason most customers give for leaving is that they didn’t feel appreciated and valued. In life, as well as business, we often take what we have for granted. Don’t let this happen to your customer - or they’ll soon switch their loyalty to someone else!