Comments on: Car Insurance Shenanigans http://www.allankintz.com/2010/02/01/car-insurance-shenanigans/ I'm not a writer ... I just play one on the internet. Sun, 29 Jan 2012 01:56:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: ack154 http://www.allankintz.com/2010/02/01/car-insurance-shenanigans/comment-page-1/#comment-27 ack154 Wed, 03 Feb 2010 04:22:26 +0000 http://www.allankintz.com/?p=925#comment-27 I believe most of what you're saying would hold true in this situation. He did mention something about the "retentions" department - which to me initially sounded like "find a way to keep this customer" department. Your explanation certainly makes sense and I was definitely frustrated enough to call and try to do SOMETHING about it - even if that did mean change. It logically makes sense from a company perspective... "why lower these people's rates if they're happy where they are and we can keep making money." But the other said of me would just be happy staying flat policy over policy. Even that is hard to come by apparently. I believe most of what you’re saying would hold true in this situation. He did mention something about the “retentions” department – which to me initially sounded like “find a way to keep this customer” department. Your explanation certainly makes sense and I was definitely frustrated enough to call and try to do SOMETHING about it – even if that did mean change. It logically makes sense from a company perspective… “why lower these people’s rates if they’re happy where they are and we can keep making money.” But the other said of me would just be happy staying flat policy over policy. Even that is hard to come by apparently.

]]> By: Tomas http://www.allankintz.com/2010/02/01/car-insurance-shenanigans/comment-page-1/#comment-24 Tomas Tue, 02 Feb 2010 21:38:57 +0000 http://www.allankintz.com/?p=925#comment-24 I suspect what you got, Allan, was a "new customer" quote... Many, many companies offer lower rates to "new customers" than they do to existing, long-term customers. Some of the reason for that is the tremendous desire, actually need, to attract new customers, and the firm empirical knowledge that once a customer has been with the same company for a considerable time, it takes a lot of poor service/poor prices/poor treatment to get over the threshold and past the inertia. Long term customers may gripe about things, but most of them won't get to the point where they are actually willing to work toward any sort of solution. First off, they made the choice to be a customer of a specific company, often times based on a "new customer" special deal that beat other companies. Their natural assumption remains that their chosen company is STILL the best deal, and that all the others have been increasing rates right along, too. Secondly, people don't like change. They may gripe, but it takes a lot to get them annoyed enough to be willing to make changes. Third, most really annoyed customers will call the company to gripe, and that gives the companies one more chance to 'mollify' the customer and keep them. Those customers are often turned over to "retention specialists" that have more options open to them than the regular representatives. The job of "retentions" (or whatever euphemism the company uses) is to calm the customer down and give them a "special deal" that makes the customer re-think leaving. Often the "special deal" is nothing more than offering the long-term customer the same deal the company would offer a new customer walking in off the street. There are variations on this, of course, and for an insurance company working with a long-term customer who has an excellent record with the company, they can actually dip below that "new customer" rate threshold for an initial period to ensure the customer stays. (BTW, one can substitute most any sort of company, cellular, cable, insurance, car dealer, service shop, etc., and see the same sort of price manipulation to retain customers.) If course I also may have no idea what I'm saying. :) Tom I suspect what you got, Allan, was a “new customer” quote…

Many, many companies offer lower rates to “new customers” than they do to existing, long-term customers.

Some of the reason for that is the tremendous desire, actually need, to attract new customers, and the firm empirical knowledge that once a customer has been with the same company for a considerable time, it takes a lot of poor service/poor prices/poor treatment to get over the threshold and past the inertia.

Long term customers may gripe about things, but most of them won’t get to the point where they are actually willing to work toward any sort of solution.

First off, they made the choice to be a customer of a specific company, often times based on a “new customer” special deal that beat other companies. Their natural assumption remains that their chosen company is STILL the best deal, and that all the others have been increasing rates right along, too.

Secondly, people don’t like change. They may gripe, but it takes a lot to get them annoyed enough to be willing to make changes.

Third, most really annoyed customers will call the company to gripe, and that gives the companies one more chance to ‘mollify’ the customer and keep them. Those customers are often turned over to “retention specialists” that have more options open to them than the regular representatives.

The job of “retentions” (or whatever euphemism the company uses) is to calm the customer down and give them a “special deal” that makes the customer re-think leaving.

Often the “special deal” is nothing more than offering the long-term customer the same deal the company would offer a new customer walking in off the street.

There are variations on this, of course, and for an insurance company working with a long-term customer who has an excellent record with the company, they can actually dip below that “new customer” rate threshold for an initial period to ensure the customer stays.

(BTW, one can substitute most any sort of company, cellular, cable, insurance, car dealer, service shop, etc., and see the same sort of price manipulation to retain customers.)

If course I also may have no idea what I’m saying. :)

Tom

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