I have written about loyalty programmes and how to get maximum benefit from them. 22seven also does a great job of tracking loyalty points. But to really cultivate customer loyalty, nothing beats good service or product at a good price. And loyalty points or not, sometimes you just need to find a new service provider.
This is a daunting task for many. The idea of having to go through the admin puts most people off. Service providers like it that way, so they don’t try and make it easy. But I’ve changed banks (once), cellular provider (once) and insurance companies (thrice), and survived all three unscarred. Read on for my story of how I did it and my tips on making it easier.
This was a big move and I think it’s the one most people are scared of. For different reasons. For example, my mother was worried that I would lose my ‘credit history’ with the bank and that would negatively affect my ability to get a loan if I needed to. But I explained to her that banks don’t work like that anymore. You don’t go in and have a chat with the bank manager like she used to do when she needed a loan. These days everyone’s credit worthiness is judged by fixed criteria, and how long you have been with a bank will make no difference. In fact, the opposite applies – they will often offer you a better interest rate on your bond if you open an account with them. So it can pay to not bank with the institution you are approaching for a loan!
But the real reason that changing banks is such a mission is the debit orders and salaries, etc. You need to inform your employer of your new banking details and you need to move your debit orders across to your new account, although most banks will assist you with that process. The other annoying thing is that you have to set up your beneficiaries again in your online banking. I’m not aware of an import export facility for that, although it would be super easy for banks to make it possible. But like I said, they don’t want to make it easy for you. Still, since moving banks I’ve saved over R10,000 in bank fees, so it was a good move.
Here’s how I did it, and how you might:
- Go and open your new account. Remember to take all your FICA documents with you. Ask the consultant about any assistance they offer with respect to moving debit orders across, etc.
- Deposit some money into the account and set up your internet banking, including your withdrawal limits and your beneficiaries, which you can basically copy over (one by one, unfortunately) from your previous internet banking as you still have access to it.
- Check that your ATM card works for transactions and for withdrawals at the ATM (you don’t want to be stuck without access to cash).
- Inform your employer of your new banking details for your salary. Give them good notice, not the day before pay day!
- Move your debit orders across (your new bank should assist with this).
- Try and have enough money in both your old bank account and your new bank account to handle the debit orders if your salary doesn’t come through for some reason.
- If your salary appears in your new account and the debit orders go off fine, you can transfer most of your balance from your old account to your new account. Leave a few hundred Rand in the old account to cover any fees that may still be pending.
- Finally, go to a branch of your old bank and tell them you want to close your account. It’s a very satisfying feeling, trust me. They will try and tempt you to stay, but you will hopefully not be tempted. They will close the account and give you a cheque for your balance, minus outstanding fees. Deposit that cheque in your new account and give yourself a pat on the back.
This used to be a serious mission because you were not allowed to take your phone number with you, so most people were stuck. But things are different now: with number portability you can easily move to another service provider and keep your phone numbers.
- When your contract is a couple of months away from ending, send the provider a letter of cancellation. Follow that up with a call just over a month before the day. Tell them in the letter and on the phone that you want the sim to become a prepaid sim.
- When the sim is prepaid (you should receive a notification of some sort), take it to the new cellular company and ask them to port it to prepaid on their network. This is quick and you should be up and running within a few hours.
- Load some credit so you can make calls. If you don’t want to stay on prepaid, you can go into a branch and ask them to upgrade your prepaid sim to a contract. That’s a done deal, super easy!
(There are other ways of doing this, but this way is the most reliably hassle-free)
Insurance companies have ‘retention departments’ which are responsible for stopping customers from moving to other insurers. But they only use them when you are about to leave. That is not how you engender loyalty. If my insurance company can suddenly drop my premium by 20% and include free car hire now that I am leaving, why could they not do that before?
I recommend that you get quotes from other insurance companies every year when your premiums increase. If they are significantly cheaper, contact your insurance company and if they won’t match the new premium, or at least get close to it, then make the move. Bear in mind there is usually an upfront admin fee when signing up to a new insurer, so you need to divide that cost by 12 months and add it to your premium when doing the comparison.
Also, be aware of any no-claim bonuses that are due to you. If you are due a bonus of a few thousand Rand in a year’s time, it might be silly to move before receiving that. But it’s probably not worth waiting 2 or 3 years for a bonus as you might have an accident in that time and lose it. Plus your more expensive premiums might have cancelled the benefit of the bonus by that stage.
This is the easiest move to make and I have done it several times:
- After receiving a quote that you’re happy with, inform the new insurer that you would like to activate the insurance at the end of the month. They will send you your policy document with start date.
- Contact your current insurer and tell them to cancel your cover from the end of the month.
Just be sure to compare apples with apples when comparing premiums. One premium may be higher but will have a lower excess and include other benefits such as car hire when your car is being repaired, etc. Last tip: Always be truthful when applying for insurance. You may get a lower premium if you say your car is stored in a locked garage, but if it isn’t really stored in a locked garage and it gets stolen they will not pay out. It’s just not worth the risk.
Photo by: thethreesisters, money via Flickr. CC by 2.0