How To Lose A Customer in 10 Days

Yeah, it sounds like the film, but this is real.

Do you remember the old days, when the telecom industry had this fantastic idea of offering much better conditions to new customers than to existing ones? Basically, you were a customer of Telecom “X”, paying “Y” Euros/Dollars a month with a certain number of minutes and data included. Time to renew your contract. Then you went to their website and you could see that they were offering the same conditions to new customers for 30% less of the price.

This strategy did work to get new clients. However, it was also a big contributor to build a lack of trust and a deep disappointment from customers in an industry that has become one of the most competitive worldwide. People were (and still are) switching from one company to another at every chance they had, to either pay less for the same number of minutes and data or to get a better phone for the same money.

Unfortunately, the loyalty to the brand in the telecom industry has disappeared. As the differences between quality of networks and coverage range companies offer are minimal, customer decisions are mainly based on either price and/or customer experience (reviews, word of mouth).

Insurance companies didn’t learn from it

Recently, I received an email from my car insurance company letting me know that the renewal date is around the corner. Great! Thanks for the reminder.

There was an attachment in that email with my new policy conditions for the coming year. There was an increase of 23 % in my monthly amount. Yes, 23%! The reason for that change was stated in the document. There were more car incidents this year in The Netherlands, and the cost of repairing them has increased. Conclusion: they had to raise the prices.

The picture below basically tells the story (in Dutch). First what I am paying (39,24 Eur), second what I will start paying (48,51 Eur):


How to lose a customer in 10 days

Day 1

I can’t believe I need to pay more because other people had an incident with their car. I didn’t have any issue in five years with this car. I don’t have time to have a look and do a bit of research, so I keep working and do nothing about it.

Day 2

I still think I should have a look at other insurance companies, but I don’t have time to do it right now.

Day 3

I kind of assume all companies will do the same, so most probably I will stay with my current one.

Day 4 

I don’t have time. Still think about it for a moment, but really, I don’t have time.

Day 5

I am in my hotel room, I switch on the television. There is a national tv show called Radar and I see they are talking about this specific issue. This is a show where they showcase and confront companies that are performing, let’s put it this way, not the best practices when it comes to deliver products or services to consumers. Things like a company selling raspberry and blackberry juice and explaining how 87% of it is apple juice and it only contains 1% of raspberry juice. They also try to address the problems with the companies and come up with a solution. I like this show.


They explain the case and say that more than 10% of increase in the policy price could be considered as abusive. Then, I tell myself I should find the time to look at my case.

Day 6

I go to my car insurance company’s website as new customer to see if there is a difference. Same car, same driving experience, same kilometres per year, same number of years without incidents. If I become a new customer, I will be a bit less than a 1 euro cheaper per month, almost 10 euros per year. Not much really, but WHY is there is a difference?


Day 7

I look at other insurance companies. Without much effort, I can find a good insurance company willing to give me a policy for approximately the same price I am paying with my current policy. A price 23% cheaper than the one I will pay if I renew.

Interesting enough, there is a similar option with Allianz. Adding the road assistance package, it will be around 38 Eur per month. My current company is a subsidiary of Allianz…


Day 8

I call my insurance company saying I don’t want to renew the contract. They ask me why and I tell them. I am sorry for the person on the other side of the phone, she must be hearing the same story several times a day and she can’t do much to turn the situation around. She says it’s better for me to make sure I have a new insurance before cancelling my current one and that I can cancel mine at any time. So, I decide to get a new insurance first.

Day 9

I get a new insurance. They are very happy to have me as a client and I am very happy I don’t have to pay more for the same service.

Day 10

I call my current insurance company to cancel my contract. They ask me why, I tell them again. They can’t do anything about it. They have lost a customer.


This company is losing customers on a daily basis. What would cause a more negative impact on their recurring revenue? Having more costs because the number of incidents increased or losing their paying customers massively in addition to being showcased as a bad practice on a national tv show?

It’s ok to raise prices sometimes. If you explain the reason well and provide a good service level, people will accept it and even will sympathise with you having to do that. If the increase is too big and the explanation comes across like “Other people fucked it up so now you have to pay more” (excuse my language) they won’t be happy, they will look at other options and they will switch to the competition.

In an industry where the product is perceived as very similar, people will look at two facts: price and customer experience. A great customer experience can help you overcome price obstacles. Just raising prices and not giving anything in return won’t help your business at all.

If you liked the post, please like it. If you loved it, please share it. If you think I can do better, please let me know how. I am always looking for feedback to be able to improve.


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