Andrew Vine: Don’t take loyal customers for granted

These days, it’s only the new customer who is valued. They’re the ones offered discounts or inducements while the loyalty of those who have stuck with a firm for years is taken for granted.

A couple of textbook examples of this tendency have just turned up from insurance companies, whose renewals regret to inform me that the premiums have gone up again. That’s by post. And by a masterstroke of marketing, by email arrive round-robins from both, aimed at new customers, one with the offer of £50 cash back after 70 days, the other holding out the equivalent sum in shopping vouchers.

Eye-catching offers, particularly the cash back one which would bring the premium down to its level of three years ago, and worth a phone call.

Whatever coaching the call centre chap had received had plainly not prepared him for this eventuality, as I suggested that as a loyal customer of 15 years’ standing, I’d like the £50 cash back in exchange for continuing the association, especially since the renewal letter promised faithfully to do whatever the company could to help me should I contact it.

Nothing doing. New customers only, I’m afraid sir. After a bit of amiable to-ing and fro-ing, I asked what would happen if I let the policy lapse and then rang back a week later to take out insurance.

He brightened up considerably. That would be fine. You’d be a new customer, and be eligible for the cash back. The premium would have the same headline figure but effectively be £50 cheaper.

This is bonkers. It wasn’t his fault, of course, he’s just a small cog in a corporate machine with a script to follow. He certainly saw the absurdity of the position, as did somebody in the customer service team to whom I fired off an email.

Rules are rules, and unless I bade them farewell, only to return like a prodigal son a week later, I wasn’t going to be able to shave £50 off the bill. And do I really want to leave the house and its contents uninsured, even for a week? Not really, as that would be tempting fate.

So it’s pay up or go elsewhere and bask in the glow of another company’s introductory discount, at least for the first year, until along with everybody else who signs up I’m bracketed as a faithful old stager who can be relied upon to keep coughing up.

As a strategy for irritating loyal customers, it takes some beating. It assumes that those already on board won’t bother shopping around.

Naturally every company wants to attract new customers, because additional business is always welcome, but doing so always costs more than retaining existing ones.

Because it’s so much easier now to shop around, it’s surprising that greater emphasis isn’t put on keeping loyal customers and rewarding them. It is even sometimes the case that long-standing customers find they are messed about to a ridiculous degree, as in the instance of a friend wishing to open an additional account at the bank he has used for nearly 50 years.

He had to go through the full-scale process of proving his identity beyond a shadow of a doubt with a stern-faced clerk whose manner suggested that a man of 74 with a dodgy hip may in fact be a money-launderer for an international drugs cartel.

A lot of lip service is paid to customer care, without much that is practical or demonstrates a genuine appreciation of loyalty actually taking place.

Supermarkets with reward schemes that give something back – albeit a tiny proportion of what has been spent – do at least show some such appreciation, but they’re in a minority.

But the likes of my soon-to-be-former insurers are missing a trick.

In common with, I suspect, a lot of other people miffed at not receiving any acknowledgement of loyalty in pounds and pence, I’ve gone shopping around and found introductory deals that give me some money back on premiums. And I’ll bet that next year, the companies that I’ve left are trying to tempt me back with deals of their own, having of course lost out on 12 months’ premiums in the interim.