Have you ever seen a company have a good or great offer but only for new customers? I have and it really bugs me, so many focus on attracting new customers but don’t treat their existing customers the same way. Ally Bank had some great commercials but this one is my favorite that best represents the “New Customer”.
A few years ago I was a Bell satellite TV customer and was happy with everything they offered. I decided to buy a HD TV and noticed that Bell had an offer at the Source where you could buy a Bell HD receiver(which you need for a HD TV) for $199 . I didn’t read the fine print and promptly went to the local store to get my new HD receiver, WRONG. They said because I was an existing customer, I would have to buy one for $499. I was shocked so called Bell and was told yes you have been a good customer for quite a few years so we can offer you a new one for $399. I told them if I was a new customer I could buy one for $199, that didn’t seem fair to me. I was prepared to buy one for $199. I proceed to call MTS to find out what I would pay for one with MTS. Zero was the cost with MTS and they also reduced my monthly bill. I told them to sign me up which they promptly did and we arranged to switch. I called Bell back to cancel my services with them at which point they handed my call off to a “Retention Specialist”. They asked me why I was cancelling so I told them the story at which time she said to me, “We will match any offer you have obtained anywhere else.” This infuriated me even more because it wasn’t until I threatened to leave that they offered me a better deal. I had to go out and do the work and then they would just match the offer, that’s not fair in my eyes. I told them I was a man of my word and I had committed somewhere else and prefer to deal with companies that are upfront and treat me like a new customer all the time.
How does this relate to mortgage renewals. The CAAMP Consumer Survey report released Tuesday paints a similar picture when it comes to renewals. Consumers are increasingly incensed with renewals mailed to them at posted rates by some financial institutions. They begin the process of negotiating rates and some even go so far to contact a mortgage broker to obtain a quote for their renewal. Once they are armed with a rate from a mortgage broker, the financial institution will “match” whatever they are offered. If they were a new customer they may have been offered this rate up front. With the spread between posted and discounted rates close at 1.8% on a 5 year fixed rate, that amounts to $18,038 over 5 years.
If you are good customer should you be offered the best rate up front, I would! Ice cream anyone?