Offering A Fee Reduction (Without Being Asked)

Published: Jun 16 , 2021
Author: Ben Byth

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!


2018 Ben Byth v2

About the author:

Ben Byth
Ben’s background is in commercial business to business sales. Leveraging studies in organisational psychology, Ben’s previous role was responsible for growing Profiling Online’s bespoke leadership assessment business locally and abroad across industries such as Banking and Finance, Insurance, Travel, Engineering and Professional Services.

Read more about Ben Byth

More posts by Ben Byth

Latest Blog:

The Negotiator's Response to Unreasonable Demands

Every now and then someone will make a demand of you that you can't help but feel is unreasonable. Your first reaction will often be one of shock, and you may even ask if they are joking?! However, annoyance then usually sets in once you realise they felt it was okay to make such an outrageous request. When emotions begin to boil in these situations it is often best to step away, cool down and think about your response!...

Latest Tweet:

Scotwork Negotiation Australia
Level 17 / Suite 2, 25 Bligh Street
02 9211 3999
Follow us
Scotwork CPD 2020