More in your pocket

“Loyalty cannot be blueprinted. It cannot be produced on an assembly line.

It is a force which leaps into being only when conditions are exactly right for it-and it is a force very sensitive to betrayal.” – Maurice Franks!”

Acquiring new customers costs at least 7 times retaining and looking after one.

So why do customers become disloyal to their provider and leave for an alternative provider?

According to a Bloomberg article - "Consumers in Singapore (87%), the U.S. (78%) and Australia (77%) are the most likely to consider changing providers as a result of a poor customer experience".

Customers don't become disloyal - providers force them to become disloyal due to poor product, poor service and more costly.

But when it comes to mortgages in Australia, customers only consider switching to a new provider when existing needs are not satisfied by the current provider or customers can find a cheaper home loan - basically for a much lower interest rate.

The RBA has urged existing home loans, borrowers, to “shop around” for a lower rate after its analysis found existing borrowers were being charged ~ 49 bps (0.49%) more than new borrowers.

The RBA data above shows the difference in owner occupied home loans for an existing loan and new loans continues to be over 30 bps (or 0.30%)

The above table shows you the RBA analysis of different home loan products and the rate difference is between 0.37% to 0.49%.

You could be potentially saving over $3k per year if you currently have a $750k home loan.

So who's pocket would you rather this extra cash - yours or your banks.

That's why it pays to be disloyal.

PS. all images, GIFs and quotes are attributed to the original owners.