Organizations are training their customers to be disloyal. Digital is an accelerant for disloyalty.

Recently, my house insurance came up for renewal. It was about 30 percent more expensive than last year. I ignored the letter. After a while I started getting some calls. I ignored them. I waited until a few days before renewal and then I took the call and said I was thinking of switching. Surprise, surprise, they were now offering me the insurance at essentially the same price as last year.

It’s a game. It happens every year. 

Your insurance company sends you out a bill that’s significantly higher than last year. If you’re a loyal customer and you pay on time, then you get overcharged. If you’re a disloyal customer and threaten to switch, then you get a much better price. Why on earth would any sensible person want to be a loyal customer under these circumstances?

“There is widespread insurance industry consensus that customer turnover rates are too high,” an Ernst & Young study stated in 2014. “There is considerably less clarity and confidence about the best next steps to take.” 

If you reward disloyalty and punish loyalty then you’re going to have high turnover. Finding out that your loyalty is rewarded with higher prices has to be one of the worst customer experiences possible.

I had been with my previous insurance company for 10 years. At the end of that period I discovered that I was being charged twice what I could get from competitors. The marketing content they sent me talked about how much they cared about me and what a wonderful deal I was getting because I had these amazing no claims bonuses. When I discovered the actual truth, it hurt. I felt like a fool, like a victim, like I’d been robbed.

Learning Opportunities

I know my experience is far from unique when dealing with insurance companies. An Irish government report published in November 2016 equates dealing with insurance companies with being “thrown to the wolves.” If customer experience is becoming more and more important then industries like insurance have a huge challenge ahead. If loyal customers feel they’re being exploited and overcharged then your customer experience strategy is built on quicksand.

I visited an e-commerce website a while back to check some prices. I occasionally buy from it so it has my details. A couple of days later I got an email offering me a substantial discount if I went back and purchased. Now, with this e-commerce vendor I go and check the prices and then wait for my discount. If it doesn’t get in touch I just buy from someone else. I’m going to teach its algorithm that no discount equals no purchase.

I don’t do that with Amazon. I know Amazon may have a reputation as a difficult employer, but the treatment I have received as a customer over the years is just excellent. I trust Amazon to treat me fairly, not to rip me off, to give me a decent price. When I buy from Amazon now I just assume it's giving me a good price.

Slack, the phenomenally successful messaging solution for teams, has a fair pricing policy. If a member of your team stops using Slack then it automatically refunds you for that person. That’s great customer experience.

Customer experience is first and foremost a way of treating people. Great customer experience is built on fairness. If you treat your customer right then you’re well on the way to giving them a great customer experience.

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