As someone who has been in the communications industry for over 20 years, I’m increasingly staggered by how some of todays’ brands are doing little in proactively keeping consumers engaged and retained to their business.
Why on earth should I, a loyal consumer, have to spend valuable time bartering with a service provider over price? The time has come for service economies, those that want to join the modern world, to wake up to some marketing basics and stop the consumer merry-go-round.
Businesses driven by volume rather than value
Travel companies, solicitors, health care providers, just a few industries where the typical consumer wouldn’t consider bartering on price. The price is the price and you pay it. I cannot imagine going to the Easyjet website and offering my best price for a flight, it’s fixed and that’s that. And so, what’s happened to the utility markets, in particular insurance and telecoms organisations? Too many brands playing in this world are preoccupied with pricing. Their attitude is one of getting the punter in quick, don’t worry about the relationship. A short-term gain attitude that demonstrates to the city and shareholders alike, that customer numbers are buoyant. On the face of it, this seems great, but a volume strategy means little focus on relationship building and optimising loyalty. A price-first mentality will dilute and eventually destroy any inherent brand equity – and of course lead to a leaky customer bucket and in-efficient budgets spent on winning them back.
Where brands are making it harder for consumers
In recent weeks, I have experienced two episodes that have left me wanting to have a quiet (or loud) word (or two) with the relevant marketing director. Episode one was triggered by receiving my car insurance quote. Nothing special about that I hear you say. Again, my premium had been ramped up a few hundred pounds with no rationale. The same happened to me in 2017, where I was told to visit the company’s website as a new customer and then call them back so they could compare prices - madness. Now that’s how to annoy a valued customer who has been with your brand for well over 10 years as a multiple product holder. This time around, said brand could not match the price and I switched – having not been treated with respect. And the brand’s penalty for this decision? The loss of multiple products. Not one car insurance policy, but my wife’s as well, our home and pet insurance. That’s quite a bundle of important monetary value.
The second episode was with a major telecoms provider. We upgraded to their fastest broadband package. This has an 18 month contract attached. I was told that you could call and negotiate a price when it expires. Why should I have to? Surely a proactive, best price should be leveraged for a customer to stay. But no, the customer, me, has to do the work and chase. Bartering takes time. And knowing that brands are not being transparent, affects trust and long- term advocacy.
Really understanding the customers that matter most
I am passionate about consumer retention, treating those that matter most with proactive pricing and service. What the insurance brand got wrong was that they didn’t give two hoots that I held multiple products with them. There was no single customer view.
If the advisor at the end of the phone knew that my value to the brand extended well beyond car insurance, would they have employed a different retention strategy? I would hope so. With that, I think all brands, especially those major household businesses that dictate so much consumer demand; really do need to accelerate their focus on a single customer view.
Interestingly, research from EConsultancy in August this year, surveyed just short of 500 marketers and 45% of respondents cited developing a single view of the customer based on data and insight as a vital objective in the next 5 years. Those brands that get this deployed in their business quickly can set the gold star standard – not only from an acquisition mantra but also, with precision, help lock greater product value into consumer’s wallets.
Price cannot win the hearts and minds of consumers. marketing directors that focus on embellishing their proposition, with proactive service and superior insight gathering will secure greater lifetime value. Consumers just want a fair deal, a value exchange that is meaningful – price alone will be at a business’s peril.
Andrew Riddle is client services director at Rapp Edinburgh