Loyal Customer? Don’t Overpay—Time to Reassess Deals

If, for example, you have been with your phone and/or internet provider (and you could substitute phone and/or internet with insurance, mortgage or bank) for a very long time you know what I am going to talk about: After many years of loyal custom you decide for some obscure reason to ‘go to market’ again and check whether there might be a better deal to be had. And in many (or most!) instances you will find that there is.

Technology and business practices evolve constantly and with these changes often also the cost of providing them reduces. Take telephony: Accessing the internet on your smartphone not to mention calling your loved ones while on holiday abroad used to cost an arm and a leg. Nowadays many plans don’t even charge you for these calls since depending on the country you find yourself in data as well as minutes are included in your subscription. Or take banking: The mainstream banks are used to and still expect to be able to charge exorbitant commissions and fees. Fintech disruptors have changed that, offering you all the traditional banking services and more at a fraction of the cost.

In particular technology assisted services and not least technology itself gets ever cheaper, and providers of goods and services offer fantastic deals to secure for themselves a growing portion of the addressable market. Chances are that customers who are satisfied will not proactively be looking for a better deal- and that’s exactly what your provider will be banking on. As a result with the standard rate you and I will be paying we are subsidising the heavily discounted offers which new customers get.

Now while this practice is not illegal in general (an exception, for exemple, is the British insurance market where premiums for a given cover have to be the same for new and current customers), companies are increasingly being called out by regulators in a number of countries and industries for neglecting existing customers.

So in the end it is down to you and me to make sure we get the best deal possible. Watch out, for example, if you are on a promotional offer with particularly appealing conditions, when these end and what terms they revert to afterwards: it is quite possible that someone else will have a more attractive proposition. Then make use of comparison sites and – last but not least – don’t be afraid to ask for a discount and to haggle.

A couple of years ago I started asking service providers of a couple of my more expensive subscriptions shortly before the annual renewal for a discount and so far, and fingers crossed in future, I got each time a worthwhile rebate on the standard renewal rate.

In a way it is sad that we as supposedly valued customers are not really looked after, but then I gather that’s the nature of business: Chase the next account, grow market share and increase profit. Thankfully consumers nowadays are reasonably savvy and willing to maximise value for money as can be gleaned from the high churn rates for example in telecoms (20-30% annually), streaming services (30-50% per year) and fitness clubs (30-60% each year).

Personally I consider myself a reasonably loyal customer, particularly if I get a quality service at a reasonable cost. But it is a competitive market out there and every few years I reassess my recurring expenses and shop around for better deals, mostly but admittedly not always successfully.

So if you feel you’re being taken for a mug and dislike that new customers pay half the cost you are asked to stump up for the same service you always have the option to look elsewhere. All the tools to find the best deals are out there – make the most of them.