Customer loyalty is something many companies take for granted.
And here at Streetwise we have long warned that faithfully giving your business to the same firm year after year is a sure way to miss out on the best deals.
From energy suppliers to mobile phone providers, the sad truth is that attracting fresh customers is nearly always higher on their agenda than retaining those they already have.
And in case you still need convincing, consumer research firm TARP has found that companies spend anything from two to 20 times as much on finding new customers as they do keeping old ones.
But for many people it can be hard to leave old habits behind.
Even someone who has spent his life giving other people advice was shocked to realise just how badly he was getting stung by sticking with one firm.
Syd Rapson has been a city and county councillor, the Labour MP for Portsmouth North and even the city’s Lord Mayor.
But after reading advice in these pages about shopping around, he finally realised all was not well with his ballooning car insurance premium.
He said: ‘For years I had to give advice to constituents who were being taken advantage of, but even with all my experience I have only just realised how much loyalty doesn’t pay.’
For over 40 years Syd has bought his car insurance from Colonnade in London Road, North End, Portsmouth.
He said: ‘Over the years I have been very satisfied.
‘They were taken over by Swinton some years ago, but I still used them as they were efficient and courteous and it was a one stop shop for me and I trusted them.’
So when his insurance increased last year to £600 for a fully comprehensive policy, Syd took the hit and decided it was probably just a nationwide rise.
But this year his policy increased again and, despite four decades of loyalty, the cheapest price they could quote him was £882.
‘My daughter convinced me to go online to look at other prices,’ he said.
‘When I did there were several offers of £290 – even Swinton insurance was £290 online.
‘I eventually chose the Post Office at £310.35 with exactly the same conditions.
‘When I rang Swinton to cancel my dealings with them, they said there was nothing they could do as online deals did not carry overheads.
‘Sadly my many years of loyal trust was terminated then and there. By being online and forgetting loyalty, I saved myself £571.72.
‘There’s no fool like an old loyal fool.’
But far from being foolish, Syd was simply losing out because he was not in the habit of regularly shopping and comparing prices on the internet; something many readers can no doubt sympathise with.
And while Swinton’s talk of overhead costs being lower online is clearly true, there is also a very real bias amongst many firms against long-standing customers.
Research by Which? magazine found that of 30 major car insurers they investigated, 23 offer an 0800 freephone number to potential new customers but under a quarter offered this benefit to existing policyholders who call to make a claim.
At Direct Line you can get 30 per cent off home insurance plus a further 20 per cent off when you buy online – if you’re a new customer.
And banks and building societies are well-known for reserving their best deals for new customers.
For far too many companies, the customers that matter most are the new ones.
So don’t fall into the trap – demand the best prices or take your custom elsewhere.