A tale of two car breakdown companies and the six lessons you can learn


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I have been a loyal customer of the RAC for over 16 years

In the UK the two main car breakdown companies are the RAC and the AA – they are both reputable. I have been buying breakdown cover from the RAC for over 16 years. Each year the RAC send me a renewal quote and I simply let them renew the cover. I don’t go and check the websites to get quotes from other providers. Why? Each time I have needed the RAC they have delivered. In particular, the RAC won my heart when my wife and 3 young children were coming back from France and their car broke down near Paris. The RAC made sure that my family was taken care of and got them safely back to the UK even though the car could not be repaired at the roadside.

So when the renewal reminder came in this month I simply accepted that I would renew with the RAC. Then I got a car breakdown renewal reminder from the AA; I had taken out car insurance with the AA last year and took out car breakdown cover even though I did not need it because by taking it out I got a significant discount on the car insurance premium that more than paid for the car breakdown cover.

How two young ladies brought the AA brand to life and won me as a customer

When I rang the AA call centre I was greeted by a friendly voice and I told her that I did not wish to renew the breakdown cover. She put me through to the retention team. My call was picked up straight away by another friendly, bubbly, voice who asked me why I was not choosing not to renew. I told her that I had only taken out the AA breakdown cover because of the car insurance discount and was a long standing happy RAC customer. She asked me if I would give her the opportunity to offer me a competitive quote. Because she was so great on the phone with me I agreed.

She came back with a quote that saved me some 40% on the renewal quote put forward by the RAC. Because of the value that she had created for me and how she was being on the phone (friendly, enthusiastic, helpful, validating) I agreed to take up that quote. This young lady then proceeded to ask me questions to provide the comprehensive cover I needed. At one stage she asked me my wife’s birthday. When she picked up the uncertainty in my reply she empathised and made playful fun of me / with me. This little interaction here – a fundamentally human interaction – made the whole experience stand out memorably!

Lesson 1: if you want to win your competitors loyal customer then you need to create value for that customer. You can do that in many ways. The AA created emotional value for me – the young lady that I spoke with made we feel great about talking with her and signing on with the AA. She was also given the freedom from the AA to create economic value for me by saving me 40% of the RAC price.

Lesson 2: your employees shape the customer’s perception of your brand so choose them wisely. I do not know what the components of the AA brand are. I do not know how the marketing dept want the AA brand to be portrayed. I do know that as a result of my conversations with the two AA call centre agents I am left thinking/feeling that the AA is a fresh, friendly, enthusiastic and helpful organisation. That appeals to me and that is why I am happy to be an AA customer.

How the RAC failed to keep me as a customer

After I signed up with the AA I rang the RAC to cancel the automated renewal. The RAC call centre agent asked why I was not renewing and I told her. She asked if I would give her a chance to offer a competitive quote and I reluctantly agreed. Why reluctantly? On the one hand I had established an affinity with the AA and was happy on the choice I had made. On the other hand the RAC had looked after me well for 16 years. The call centre agent came back and told me that the figure I had quoted could not be right – her system was telling her that it was £10 higher. I did not take this well because I was thinking I am doing you a favour by letting you quote and you are implying that I am a liar! So I asked this call centre agent to make sure that my breakdown cover was not renewed and ended the call.

Lesson 3: never imply that your customer is lying – we do not take this well especially when we are telling the truth!

Lesson 4: there is absolutely no point in spending money on CRM systems if you employees are not going to use them when it matters. If the RAC call centre agent had looked into her CRM system she could have reminded me about the times that I had needed their help and they had delivered. She could have not played the price game and played the relationship and reciprocity

Lesson 5: if you have not given your customer facing staff access to a full view of the customer’s relationship with your organisation (through a CRM system) then you are asking them to compete in a race (for the customer) with their legs tied together.

Lesson 6: if you don’t give your customer facing staff the freedom to be flexible and use their judgement then they will not be able to do what it takes to win over customers. I suspect that the competitive intelligence unit with the RAC had fed the AA prices into the computer system and the RAC agent had to stick with those competitive prices. And that is how she ended up implying that I was lying on the price I had been given by the AA.

Republished with author's permission from original post.

Maz Iqbal
Experienced management consultant and customer strategist who has been grappling with 'customer-centric business' since early 1999.


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