Losing Money Through Customer Loyalty

There is a lot to be said for loyalty. Loyalty to friends, even loyalty to your boss; but, when it comes to loyalty to companies selling you goods and services you face the prospect of losing a lot of money. Companies are keen to retain our loyalty because they know it is the loyal customers who provide the bulk of their profits.

How Loyalty Can Cost You Money

Threatening to Cancel.

If you threaten to cancel your own internet / telephone services you will invariably be offered a discount to stay with the company. All this requires is a quick phone call to your phone / internet / mortgage company saying that you are thinking of leaving. Their first offer may not always be the best that they can give, therefore, hold out for the best deal; you don’t need to change services or arrange a new contract. The threat of leaving is sufficient to gain a better monthly deal.

Renegotiating.

When renewing insurance, firms usually have different deals for ‘new’ customers and existing customers who are renewing. The reason is quite simple, new customers are much more sensitive to price; therefore, to attract new customers the insurance firm has to offer the best deal. However, existing customers who are renewing are much less sensitive to price. Quite a high % may not even bother to check the price but just renew out of habit. Therefore, the firm can make higher profits. The best thing to do is to use a price comparison site to search through all the insurance quotes. Firms treat these inquiries as new firms. Many customers are surprised to find that their own company may offer them a lower price when they do this.

Overcoming Apathy

Time of checking. Many may argue that they don’t have time to search for a new quote every year; they would rather save time and energy. However, the time taken to search is quite low because there are many firms who will do it on your behalf. At the most, it should take you an extra one hour to do. If your savings are equal to £100-£300, that works out as a pretty good hourly rate. If you are too busy because you are earning £15 an hour then something is wrong. Be prepared to make time for making really big savings.