Caught – hook, line and sinker…
Can you remember when, in the dim and distant past, Nationwide Building Society did a series of adverts fronted by funnyman Mark Benton?
The comedian played the world’s most annoying bank manager of a fictional ‘rival’ organisation, where customers had an emotive user experience as the manager waffled on at them.
In one, a customer was asking why the rate had gone up on his savings account. The irritating bank manager used fishing terminology to explain that the initial favourable rate was to ‘hoik’ people in and, once they were caught on the fishing line, they were transferred to a different net (where they were charged more).
In another, he claimed that certain products were for ‘brand new customers only’. And in a third, he explained that the rival bank’s home insurance ‘didn’t work like that’.
They were very well-done adverts that got great reviews. Of course, the whole purpose of them was so that Nationwide could say: ‘we aren’t like these rival financial institutions. Come to us for a preferred end user experience. We can guarantee consumer satisfaction.’ And all the while, their strapline on these adverts claimed that they were ‘Proud to be Different.’
Well, it turns out that, while we were laughing at their funny adverts, they were clearly laughing at their customers. Because it turns out that they are just like the rival institutions they were mocking in their adverts.
What’s more, they have clearly been caught on their own fishing hook and have actually admitted it.
Yep, that’s right. Nationwide have held their hands up and told the country that they charge loyal insurance clients more than they do new ones.
I dread to think what customers comments are being thrown at them. And I can’t imagine that ‘do you mind being charged more now that you’ve been a customer for 12 months?’ is one of the questions they include in their user experience research, can you?!
We have all heard it said that it pays to be loyal. Nationwide, however, are saying you have to pay to be loyal!!
They charge existing customers a whopping twice as much as they do the ‘brand new customers only’.
They literally reel them in and, once their feet are firmly under the Nationwide insurance table, they whack up the costs.
Don’t get me wrong, they are not alone in this: insurance companies are renowned for putting up their prices and hoping that people haven’t got the time or inclination to phone and complain (after which you’ll invariably get a discount) or shop around for a better deal.
But it just seems farcical after years of saying they aren’t like everyone else.
Well actually, Nationwide. You clearly are!
The report, which was produced by The Telegraph, gave details of one policy holder whose insurance had gone up in price by 77% over five years and he was paying over double the price that a new customer would be offered to insurance an identical property on the same coverage terms.
I’m gobsmacked, to say the least!
We know many companies out there go for heavily discounted pricing to draw new customers in but what about customer loyalty? That is like gold dust and shouldn’t be brushed under the carpet.
Loyalty is power
From our user experience consulting knowledge, we can tell you in no uncertain terms that loyalty is power. Keep hold of your customers and treat them right and they will return to you time and time again. And not only that, but they will spread the word and tell others about your products and services too.
Humans have emotions and, whether we like it or not, they come into play throughout our daily life. So, it’s important to tap into that emotional user experience when dealing with our consumers.
We need to understand them and know what they want from our business.
OK, some things, such as your current market drivers, take a bit more time and effort to investigate. But you don’t need a genius or a user experience agency to tell you that want thing your customers don’t want it huge price hikes to thank them for their loyalty!
Nationwide may have admitted their guilt and have started to reduce the premiums for customers who have been with them for at least four years, but there’s every chance they are only back peddling because they have been caught out and their ‘loyalty tax’ – as longstanding customer price inflation is often called – has been brought into the public eye.
So, leave your fishing hook, line and net for a relaxing afternoon on the riverbank at the weekend, as opposed to tools for reeling in and then segregating your ‘brand new customers’ from your loyal consumers.
Remember, loyal customers spend more, are happy to refer you and are quicker to forgive when you make mistakes. They can also help you to improve your business.
But you need to make sure you are not mistaking customer inertia for loyalty. Contact The Monachie Project team today and let us help you gain a better understanding of your business from a user experience perspective.