Three reasons why people stay with their financial services providers much longer than they should
How long have you been with your car insurance provider? Or your bank?
The answer is probably too long – and here are 3 key reasons why this can often be the case.
First up is the sense of loyalty to your provider. However, loyalty rarely pays – but most companies want you to think it does. Take for example no claims bonus (NCB) on car insurance – you can move NCB from provider to provider without penalty, but some companies try to tie you in with different rates, tracker policies or communications directed to you as a ‘valued customer’. Whenever you see ‘valued customer’ expect an offer – it is often little more than marketing of affiliated products or services with a generic offer ‘dressed up’ to give us a sense that we are getting something others aren’t because we are loyal. Often though, far better deals are available to new customers as we’ve covered here.
Second, customers aren’t helped by the fact that they are not getting anything concrete in return for insurance premiums – it’s a ‘comfort blanket’ which may appear as money down the drain – UNTIL SOMETHING GOES WRONG. There is less of a sense of discretion when you pay your car insurance because it’s a legal requirement and people are likely to know someone who has needed to claim so it makes more sense. Many people undertake huge amounts of research for relatively infrequent purchases – a phone, a laptop, car etc, but put less time into researching the how to protect themselves with insurance if things go wrong.
Who really likes change?
Third, most simply, is that change of any type can often be a hassle and people like stability. Whether it requires time online, or phone calls, or a trip to the high street, it’s an additional effort to switch providers. Furthermore, if that sense of loyalty, or one-way loyalty has taken hold, you are less likely to perceive the effort as worthwhile. Yet, 30 mins on the phone or online to challenge your insurer could save you £100s per year.
In totality, these factors compound each other. It’s easier just to stay put. In some cases, it’s the right thing to do, which is why at equals we want our financial services to fit you perfectly in the first place. We’d love to help you alleviate any concerns and make switching super simple so get in touch – and have a look at what Marianne of Protect My Pet said about us: