Insurance value-adds uncovered!

Personal experience often lets you find the weakness in a product. My own personal experience was in believing I had mobile phone insurance with a packaged bank account. Until of course I lost my (quite expensive) phone, and only then realised that when I took out the account I should have logged on and provided further details to activate it. The result – no cover!

A school-girl error perhaps, but it does illustrate one of the challenges of such products. Now, rather than being seen by me as a benefit, I rather resent it – like you do when you’ve been given something  and then had it taken away. Luckily it wasn’t the travel insurance I needed to call on.

This cuts to the heart of some of the issues surrounding these products. They can give you tremendous value for money, they allow banks to make more money from their bank account services and they should be a valuable way of establishing and maintaining a customer’s loyalty.

There are some issues with price. If every customer used all the services offered to the full, then it is possible many of the packages would not make economic sense. However, it is surely beholden on banks to make sure customers are adequately aware of those services and what they need to do to activate them. Perhaps a direct mail piece reminding me I hadn’t yet registered two weeks after the account was opened would make a nice feel-good CRM piece.

Henceforth I will be more diligent. However without decent communication of the benefits, there is a risk we end up paying for something we cannot use in our hour of need. That seems a sure fire way to make customers are less loyal.