Do you believe in rewarding customer loyalty?

By : Administrator
Published 17th September 2015 |
Read latest comment - 2nd November 2017

May seem an odd question, but it's something I think smaller businesses are better at than larger businesses and organisations. How many times have you seen or heard about new banking customers getting preferential rates over existing customers?

Big organisations do it all the time, mention you want to leave your mobile phone provider or energy provider and you will no doubt be bribed into staying with a reduction in your tariff or monthly bill, something that wasn't offered until you threatened to leave.

Last year my wife was shocked to realise she had auto renewed her car insurance with directline for 9 years. So she began a crusade of going through our bills and looking for better providers, something we have talked about for years and never got round to doing. I think we saved over £300 from our household bills, which proves it's a useful exercise, but the biggest was Direct Line.

They offered to reduce her car renewal quote by a £100. So much for 9 years customer loyalty! Shopping around she actually got a better quote elsewhere and Directline lost a 9 year claim free customer. I was supposed to do mine but forgot 

But this year it was my turn, 7 years loyal claim free service with Direct Line. So a quick phone around shows there were more competitive quotes, in which prompted a call to Direct Line. After lots of waffle about market conditions and how prices vary on a day to day basis, guess how much they reduced mine by? Yep £100  In my case it worked out cheaper to stay put.

Wouldn't it have been great if my 7 years as a loyal claim free customer was appreciated with a renewal quote which reflected this, rather than seeing how much money can be squeezed out of your current customer database and hoping they won't notice?

In the age of 24/7 social media, and customer service expectations, is this really still a valid and promoted business model to generate a huge loyal customer following? Or the business practice of yesteryear from a faceless organisations past their peak?

Does it sound familiar? Do you reward customer loyalty? 

Steve Richardson
Gaffer of My Local Services
My Local Services | Me on LinkedIn
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I believe in it too .. But I have only had a few customers return again and again and do offer them a small discount on their order without them even asking... I did have 1 customer that spent over £500 with me and I had to give them a good discount and it paid off as she returned yet again to add a few more tankards and goblets to her tally


I'd happily offer the same discount to new and old customers although I rarely do discounts. I certainly get annoyed of a company only offers something special to new customers! I hate how I have to change insurers every time, at least with the car one this year we negotiated our firm down to less than the nearest quote. It always pays to threaten to leave! Sad that you have to do that though.

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forum avatarGuest
18th September 2015 1:25 PM

I believe its a good way of giving back to your clients as they have returned for your services again. Being an freight forwarder its hard to so give discounts as some of the services we do are priced at a certain rate but I discount the deliveries we do in the UK

I sometimes send them a thank you note & Christmas card at Christmas with a free delivery within the UK as a small present.

This practice of suddenly dropping the price if you threaten to leave really hacks me off 

Its just seen as an ok practice to engage in. One i obviously use myself regularly and would suggest to all that they try as nearly every service provider i have has a call each year and nearly every one of them gives me a reduction. 

Pity it takes so much time but it is worth it in the end 

Clive, My Local Services
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Bumped this after seeing a recent thread about insurance prices.

A year later, I've changed my vehicle, I had to pay a small adjustment as my last insurance policy had a couple of months to run.

Then Direct Line send through a renewal quote for a whooping £850. Much more than last year, so obviously I pick the phone up. After about 30 seconds of listening to keyboard clicking, my quote is reduced by £250! Just like that.

Hmmm, rewarding customer loyalty eh??

I've been with Direct Line for years, but thought I'd try another search online, just in case the market has changed now I'm searching for a new vehicle. Low and behold, for the same cover and options, there were a variety of quotes between £310 and £450. A quick call back to see if Direct Line could match any of the other quotes, and no.

Needless to say, now like my wife I am now a former Direct Line customer 

Steve Richardson
Gaffer of My Local Services
My Local Services | Me on LinkedIn

Yes, Small business success really depends on the satisfied customer. When customers trust you, they become loyal to your opinions and the products you offer and it reflects your business's good standing. So, customer loyalty plays very vital role in making your business more powerful. 

VoIP Specialist at The Real PBX

I also believe in rewarding customer loyalty. I also think that every company should instill customer relationships as one of their core values. 

Amazon’s Jeff Bezos once said, ‘It’s our job every day to make every important aspect of the customer experience a little bit better.’


There is a great article from the Huffington Post that sums up the customer service sentiment. It's a few years old but has some great quotes:

  • 78 percent of consumers have ended a transaction due to bad service.
  • Only 4 percent of dissatisfied customers actually speak up.
  • Loyal customers are worth up to ten times as much as their first purchase.
  • The probability of selling to a new customer is 5-20 percent, while selling to an existing customer is 60-70 percent.
  • It takes 12 positive experiences to make up for a single bad experience.
  • Negative interactions with a business are spread to twice as many people as positive ones.
  • It costs over six times more to get new customers than it does to keep one current one.
  • For every customer who complains, 26 others don’t speak up.

Years later it looks like attitudes haven't changed.

My views & opinions are my own

With the advent of comparison sites, customer loyalty has declined.  Insurance companies now don't expect customers to stay with them, perhaps relying on those like Steve's wife who let it auto renew.   

I've recently done my home and car insurance.  By using a certain "animal related" site, I reduced my home insurance premium by £80 for a higher cover level.  Car insurance was a laugh.  Received quote from current supplier stating "a great price from our panel of insurers".  Quick trawl of comparison site saved me £140, even when paying monthly.  When I 'phoned to cancel renewal I was told that premiums had gone up since last year.  Needless to say, they couldn't match the new price.  I've now got the cinema tickets offer and another furry toy......

Smaller companies I deal with offer incentives for loyalty.  One gives me 5% discount on next purchase for every review I post.  I've got three of these in my inbox to use.

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