Sunday, July 18, 2010

Truth in Advertising

Almost a year ago, it was time in my household to revisit the tv situation.  Having been a DirectTV loyal customer for ten years, I could get a much better deal either going with DishTV or by quitting and rejoining DirectTV.  I tried to get the rate with DirectTV, but they wouldn't do it.  So I quit and signed a two year deal with Dish.  Then I got the exit call from DirectTV.  They had a rate (the rate I begged for).  But now it would cost me much money to bust the deal with Dish.  And BTW, Dish has been great.

The research (not shown here, you'll just have to take my word for it) shows that it's much less expensive to keep an existing customer than to go get a new one.  So why in this age are the consumer industries ignoring this?

Now it's time to review home/auto insurance.  I think the profit-at-all-costs executives look at the numbers-- most consumers just blindly keep renewing and don't check the industry.  So let's jack up the price a little bit more.  The numbers say that the minuscule percentage of customers that ship and leave are critical-- they get more money by taking advantage of their loyal customers.

You might have read the news stories in 2000, when Amazon was accused of charging some existing customers more because of their shopping habits (in other words they knew they could more likely get away with it).  Amazon denied the accusations, then gave refunds to slighted customers.

For you consumers-- I suggest looking at the advertising.  These large companies know they're screwing consumers-- so they mount publicity and PR campaigns to convince you the opposite.  We have a Capital One credit card.  They ran one commercial with actor Tony Hale in which he tries to get a real person on the phone with his other credit card.  CapOne's campaign of "no hassle" meant you get right through.  I've never gotten right through to CapOne.  They're more hassle than all of my other credit cards.  They've been the first to pillage me if I'm a day late or any other problem.

Allstate's "good hands" campaign.  Complete with Dennis Haysbert, who you definitely want protecting you and your family.  The American Association for Justice places Allstate at the top of the "Greed, Fraud, Claim Denial, Deceptive Practices" list.  If I were the executive at Allstate and didn't want to change my company's practices, I'd launch a preemptive strike-- with all the feel good advertising, when you hear something like the AAJ's report, how in the world can that be true?  Haysbert says I can trust them!

Methinks the lady doth protest too much.  If a company is really trying HARD to create an image in your mind, chances are it's because they're the opposite.  A twist on truth in advertising.


  1. Ironically, we just did the opposite for the same reason: switched from DishNetwork to DirecTV. DirecTV had the best deal, and DishNetwork wouldn't match it for us (even though their advertised deals for "new" customers are much better).

    When I was canceling my Dish service, the rep told us he hoped we'd come back. My answer: "We'll be back in two years". That's when we'll be an old DirecTV customer and a new DishNetwork customer again!

  2. Exactly! Two year cycle. Apparently both companies have a "retention" department. But I imagine their hands are tied from above. I would not want to be the manager of that department.