One of the advice someone gave me many years ago is to always shop around at renewal times. He was working in the Insurance industry and gave me this sage advice to get quotes from other insurers when it is time to renew my policy. Unfortunately, for years I ignored his advice. I thought they all pretty much compete for the same business so their prices would be all about the same. Plus I didn't want to go through the hassle of changing policies.
Well last year I thought I would give it a try and I was gobsmacked at how much I saved by switching to a new insurer. Now I realise not all insurers are the same (as the Ads on TV tells me) but 40% difference. C'mon. I have been a victim of price discrimination. Instead of rewarding me for my loyalty over the past 10 years, I have been paying extra because I was too lazy to shop around. When I read this article in the Sydney Morning Herald yesterday http://www.smh.com.au/opinion/politics/be-alert-and-informed-and-you-may-pay-less-20130115-2crip.html it prompted me to blog about my experience.
This practice of price discrimination appears in many places, particularly in areas where the products / services have been commoditised and not just in Retail as the article suggests. From the top of my head I can think of Insurance, Electricity, Water, Banks, Credit Cards, Mobile Phones, and other suppliers. You name it - it's everywhere. Most businesses have different "rate cards" for different customers and the price you pay depends on where you are in their segmentation.
Take a look at your own business. If you have been using the services of the same suppliers to support your business for years then ask yourself whether you are being rewarded for your loyalty? What are they doing to add more value to your business? If all you see is price increase year after year then it could be time to test the market and see what other providers are offering. I am not suggesting that you have to switch providers to get the best price but the process of researching and testing the prices alone will make sure that your current service providers will start adding more value to you and potentially saving you money. Naturally, you have to consider the relationship you have already invested with the current providers as you would have to start all over if you switch providers.
So the motto of "Treat them mean, keep them keen" is somewhat true in business but you don't have to treat them mean, just keep them keen!
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