Casanova continually chased new loves. In doing so, he left a string of perfectly good lovers behind him, and disappointed. For Casanova, a new conquest was worth much more than an existing relationship – the seduction of the new was more attractive, regardless of how beautiful and satisfying the existing relationship.
Some businesses work just like Casanova. They chase new clients, leaving behind their neglected, existing clients. New clients are tempted with special offers and other charms, but existing clients are left at home abandoned.
Banks are one of the worst at this. In a rush to increase market share they pursue new clients with zeal, leaving the rest of us feeling deserted. Most banks have a bad case of Casanova syndrome – chocolate treats to attract the new, but neglect of the old.
I have been a loyal and faithful customer of the same bank for close to 50 years (our Diamond anniversary approaches, but I doubt my bank will remember).
It’s true I have had the occasional dalliance with other banks – only a credit card or maybe two – but mostly I have just stayed at home. With little demur, I have watched my Casanova bank parade itself to all and sundry with discounts, rebates and cash incentives, which are the banking equivalent of candlelit dinners.
An article on Stuff last week by Susan Edmunds bears this out. Edmunds quotes academics who warn banks that cash incentives to attract new bank sign-ups can backfire: loyal existing customers do not feel their loyalty is rewarded. They see the love being lavished on potential new customers but they are not getting any.
In a world of social media, it is easy to make a complaint and broadcast that complaint to the world.
Bank customers should keep their banks honest. Some of the things that are available to new clients such as lower mortgage interest rates and cheaper fees, may well be available simply by asking. If they say “no”, it is not hard to leave the relationship and give a wink to another bank.
You can never expect the bank to look out for your best interests. Whether you are borrowing from the bank or lending to the bank, you should never assumethe bank is offering you the best deal available.
Of course, banks are not the only Casanovas on the block. Power companies, internet providers, telcos and others can all treat their existing clients differently (and worse) from potential new ones.
In fact, it is usually much more expensive to attract a new client than it is to maintain an existing one. In some industries, it costs 5 to 7 times more to find and sign up a new client than it does to retain an existing one.
Casanova must have found life expensive – all those Swiss chocolates and red roses! Businesses too should know how expensive it is to go courting; a simple phone call may remind them that you deserve a treat too.
Martin Hawes is the Chair of the Summer KiwiSaver Investment Committee. He is an Authorised Financial Adviser and a disclosure statement is available on request and free of charge, or can be found at www.martinhawes.com.