Oh, wow

I have been a member of the AA (for those crazy folks States-side: that's the Automobile Association) for ten years. And, to be fair to them, I have been entirely happy with the service I have received from them. Whenever I have needed to call them out, they have come out, and usually managed to fix the problem at the roadside, as promised.

I have also been on an automated renewal scheme for those ten years, and my renewal notice has recently arrived. At the time, I noted that the price had gone up, and thought it looked a bit steep (but not too bad, all in all).

Anyway, I checked their website, and found that new customers are offered the same service at a 25% discount. So, in other words, my reward for ten years of loyalty is the wonderful opportunity to pay a lot extra for the same service.

Now, I understand the fact that web prices will generally be lower than the equivalent price bought in a store. After all, the web price reflects the reduction in costs, in terms of floor space, staffing, and so forth. But then, an automated renewal costs even less to process than a new order from any source whatsoever.

I also understand the concept of an introductory rate. The problem here is that marketing guys will tell you that it costs much more to attract new customers than it does to retain existing ones. In fact, it costs about ten times as much per customer to do so. So, actually, if there's anyone who should receive a discount, it is repeat customers rather than new ones.

And there's a third factor here. If I wanted, I could cancel my renewal, then immediately rejoin as a member, and thus take advantage of the 25% discount. And, next year, I could do the same again, and so on and so forth. But then, it doesn't really make sense to do so. A better solution is to cancel, then visit one of the price comparison websites, find the best and cheapest provider (who, incidentally, isn't the AA), and save even more money. Rather than lose out on a 25% introductory deposit, they'd find themselves losing out on 100% of my custom.

I've emailed them, pointing all this out. It will be interesting to see their response.

However, I do find myself rather troubled by this development. I'm a very strong believer in the concept of paying a fair price for a fair service and, taken in isolation, the price they were quoting probably was fair. It's only when contrasted with a 25% discount for new customers that it becomes manifestly unfair. That, frankly, is rather insulting.

And that, I believe, is the rub. The relative costs of acquiring versus keeping customers means that successful businesses should be built around repeat business, and keeping customers happy. But, more and more we see companies offering extremely generous limited-time introductory offers to attract new business, and treating new customers extremely well, while at the same time treating loyal and repeat customers very poorly by comparison. (Indeed, Sky are displaying exactly this behaviour right now - had I been a new customer, I bet they would have had me installed, and all problems fixed, within a week of me moving in. Instead, more than a month later, they still haven't managed to get everything working right.)

So, we'll see what happens. Ideally, the AA will respond with a comment to the effect that they'll renew my cover at the same price they'd offer to new customers. (Even better would be if they actually fix the problem permanently, but that's too much to hope for.) Unfortunately, I rather expect them to respond with a form email about "web exclusives", "limited time offers" and "policy". In which case, I will reward their loyalty with my own.