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Empowered staff make a marketing difference

October 1, 2010

This year, after many year’s loyalty to the AA, I changed my motor insurance provider and saved £400. That’s a lot of money – my insurance costs were nearly halved – and my cover was significantly improved too.

So why did I change supplier? Frankly, I had a poor experience over a claim earlier this year where I had to make all the phone calls and do all the work and then, when my renewal notice appeared, there was a significant increase in the premium over the previous year. The renewal notice also said that they had reviewed all my insurance options and their new offer was their “lowest”. Interesting – and unacceptable.

I started on a search for new insurance and managed to get a 50% lower quote from the insurer Direct Line. At this point, I then rang the AA to give them the opportunity to retain my business. The operative at the other end of the phone line asked if she could offer a competitive quote which in the event was only slightly lower than their “lowest price” originally offered – and hundreds of pounds more than my Direct Line quote. She had no room to manoeuvre and consequently she could not retain my 10-year loyalty.

So, here is a UK national brand, trading on a brand heritage going back to before the War. No longer a membership-owned organisation but one that is part of a private equity operation, it would appear that the focus for them now is (a) not to be competitive and (b) to leverage as much money as possible via brand association and customer inertia. In the AA‘s mind, this creates profit over delivery – at least it appears to me that way.

This is a huge mistake. Companies which lose touch with their original ethos and become cynical exploiters of brand over delivery will eventually be found out. Whether you work in insurance, publishing, car making or even oil exploration, to rest on your laurels is not enough.

And yet it still goes on. But insurance companies cannot continue to offer poor value in an open price comparison world. Publishers cannot continue to offer obsolete one-size-fits-all subscription models when people want niche service products. Car makers cannot make average vehicles and hope for national pride to save them from their demise. And oil companies can no longer rely on Big Oil to bully their way to success against the environmental lobby.

We have said before on A Brand Day Out that secrets of success for companies often lie within the companies themselves. I cannot imagine what it must be like for an insurance clerk to “go through the motions”, knowing that she will never be able to match an alternative quote. It must be soul-destroying.

Not to mention having to be the front person who has to explain that when their renewal price was their “lowest price”, it was not true. Indeed, one person at the AA told me they had “no more room” on the amount of discount they could offer (aha – so the “lowest price” is but a mirage to lull the consumer?)

Yet, I hear you say, surely it is wrong for companies to offer discounts just to keep business? Dead right! But the AA has failed in a number of ways:

  1. It’s renewal notices did not offer their “lowest price” – so a price/value reference point is not established
  2. Their staff have flexibility to negotiate discounts without changing levels of service – the AA therefore trade on price not value
  3. On no occasion did any of the renewal clerks try to assert why the AA’s price was high and describe the real value behind the business – see point 2 above

So – staff are not trained in the art of differential value but they are trained to offer discounts (albeit paltry). They are certainly not trained to retain customers. Which as we know is ten times cheaper than acquiring a new one.

In an increasingly open world of price and product comparisons, companies can no longer rest on their laurels – especially those which have signficant web exposure.

If your company cannot explain its prices but continues to charge them, it is on the way down. But if your company knows its customers, knows their “hot buttons”, knows its own product range and has a logical price/value offer, then your staff will be empowered in customer service and your business will thrive.

It’s your choice.

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