Motley Fool UK:
Financial firms spend billions of pounds a year on advertising in order to recruit new customers. However, this can be at the expense of existing customers, who usually get a raw deal.
Take, for example, car insurance. It’s almost impossible to watch an advertising break on television without seeing one or more ads for car insurance. Indeed, every single company claims to be able to cut hundreds of pounds from your yearly premium. Can this really be the case?
Having previously worked for insurance firms for more than a decade, I know how sneaky these companies are. Most of the time, they are able to offer attractive quotes to new policyholders purely at the expense of their existing customers. Hence, when it comes to insurance, loyalty hardly ever pays.
Thus, my argument today is simple, yet deadly: in order to provide competitive quotes to new customers, car-insurance providers have to exploit their existing policyholders. 2 recent illustrations prove my point… read on.
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