Services That Reward Shopping around, Not Loyalty

beltdrive on 23/06/2025 - 15:07

There was a recent thread about a price hike with an electricity provider, and it made me think about how there's a number of services where the customer is rewarded by churning (or threatening to churn) each year. Personally, we shop around for the following on an annual basis:

  • Internet
  • Electricity
  • Mobile (I'm a pre-paid slut these days)
  • Insurances (home, pet, car, etc.)
  • Mortgage

It's a pretty sad state of affairs when companies are exploiting their loyal customers' complacency, but until more people change their habits, I guess this is how it will always be.

What else is worth shopping around for? I've always been hesitant with health insurance because of waiting periods

Home & Garden

Comments

  • 87percent on 23/06/2025 - 15:08
    +1

    All of the above

    • CodeXD on 23/06/2025 - 16:43

      What else is worth shopping around for?

      Yes.

  • geekcohen on 23/06/2025 - 15:15

    There are comparison websites, but the operator gets the reward from the provider. The reward for the consumer is that they found a better deal.

    Not sure how the customer would be rewarded for churning unless the operator passed on some of their referral dollars. As much as it would be nice to see that happen, I don't think it would happen. You would need to have minimal overheads to be able to do that.

  • mboy on 23/06/2025 - 15:26
    +2

    You’ve covered the main ones, but it’s worth regularly auditing anything that’s an ongoing expense. Even stuff like medical - if you’ve been with the same dentist for the last 10+ years, you've probably never checked to see if they're still price competitive. Of course, if you’re really happy with your dentist, you might be happy to just cop the extra cost - which you could also say for any of the above.

    While it’s not technically “churning”, it’s also good practice to audit your subscriptions (Netflix, Amazon Prime, streaming, gaming, VPN, etc) every so often too.

    I've always been hesitant with health insurance because of waiting periods

    Waiting periods are usually transferred across when churning PHI - the new fund just need a transfer certificate from your previous fund. You can discuss this with whatever new provider you are looking to join.

    • beltdrive on 23/06/2025 - 15:32

      Great advice. Thank you.

  • apple2016 on 23/06/2025 - 15:34

    Electricity , Internet sure… But not so much on Insurances, Mortgage. While it can be cheaper if you move, not all insurance would be the same when claiming. Same with mortgage. Its never apples to apples comparison.

    • mboy on 23/06/2025 - 15:54

      Electricity , Internet sure… But not so much on Insurances, Mortgage. While it can be cheaper if you move, not all insurance would be the same when claiming.

      This isn't about "you get what you pay for", this is more about the fact that these businesses don't reward loyalty. They choose instead to focus their best offers only to new customers. That means I could potentially churn to a better provider with a better insurance product, and initially pay less, compared to my previous provider.

      Jump on any health, car, home or contents insurer’s website right now and take a look at whatever promo they’ve got splashed across the homepage - you’ll notice they all have one thing in common: it’s for new customers only. If you’re already with them, you’re not getting the deal.

      That means as long as you can be stuffed churning regularly (or even just threatening to churn regularly), you'll be getting a better price. Anyone who's not doing that may be copping what is colloquially known as the lazy tax.

  • RogerLoger on 23/06/2025 - 15:48
    +1

    You have to wonder how it is good business to reward good customers. It seems smarter to reward customers who always pay before the due date, rather than risk taking on the occasional dud who needs reminders, threats and handover to bill collection agencies. That said, if you are selling "you pay us to get electricity/internet", there's not a lot of value you can add.

    There's no way I churn Insurance. I have good policies well-tested over a lot of years and it comes with loyalty discount (makes it less expensive than the rest for what I get, but it takes years to get there). With insurance, you can hide things not covered by simply not mentioning them in the policy. Buyer be very aware! Your car may be repaired by a fly-by night repair shop. In fact, it's likely. Ensure your home is covered for flood/bushfire if relevant. Know what the words mean. For example, an overflowing drain does not flood your house. Read the Insurance Coluncil Definitions and you'll discover why:

    https://www.niba.com.au/sites/default/files/content-files/Gl…

  • Megatron on 23/06/2025 - 16:03

    Mortgage definitely.. currently if your PPOR interest is over 5.50%, you should be shopping around.

    Out home insurance has gone up by 40% in last 2 years.. I have tried to shop around but when comparing with other's we are still 15% better off compared to the lowest quote.. there are some things, you just cant win.

    • mboy on 23/06/2025 - 16:10

      If the mortgage has an offset facility, am I correct that 5.54% is still pretty competitive? Or should I start shopping around?

      • Megatron on 23/06/2025 - 16:20

        0.04% doesnt impact that much in the scheme of things and also depends on the LVR.. for 70% or less LVR loans, I know major banks are offering in the range of 5.45% to 5.50%.

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