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Offering A Fee Reduction (Without Being Asked)

Ben Byth
Offering A Fee Reduction Without Being Asked

Why would you offer to reduce my fee… this company has a serious problem!

I was dreading a call to my home and contents insurer to obtain a certificate of currency, but to my surprise, it didn’t go poorly at all. In fact - they ended up reimbursing me $150, despite the fact that I did not even so much as hint that the fee was of interest!

Once my excitement subsided, I started to reflect on the conversation. Had I said or done anything to encourage them to reduce their fees? Not in the slightest, I was only interested in my certificate. Not only had I not asked for a reduction, but I had also only paid the full annual premium 1 week earlier (this could not have been a better signal to them that I was happy enough!).

So why did they offer a refund without me asking?

The best possible explanation was that this insurer has a serious problem. Their staff don’t actually understand their strategic objectives! Somehow, they have convinced themselves they are a benevolent society or charity. ‘Customer Service’ does not mean ‘try to make the customer happy’. In fact, customer happiness isn’t the objective at all… instead, it is one of many strategies for achieving the objective of customer retention and profit. For example, the strategy might be to keep the customers happy enough that they don’t leave.

This insurer’s representative not only lacked clarity on the objectives but had also become sympathetic for the customer. In other words, they were batting for the wrong team! A very dangerous combination.

Although it sounds outrageous, it is fairly commonplace in my experience. So, some tips for staying on track:

  • Be clear on the overarching strategic objective. This will then inform the more granular tactics and decisions on the transaction.
  • Don’t rush. Spend more time clarifying the problem and ensure your solution aligns before you propose it. Giving me a $150 refund had nothing to do with the problem/request I had raised.
  • Sympathy has no place in a negotiation. We shouldn’t be skilled advocates for our counterparts. Instead, we should be skilled advocates for ourselves! This of course doesn’t stop you from having empathy! Empathy will go a long way to better understanding the problem state and exploring solutions.

Happy negotiating and… Don’t lose sight of your objectives!

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