A tale of two finance companies

We decided recently to replace out two cars. We live in the inner city and do few kilometres. It seemed extravagant, both in terms of the dollars and the environmental impact, to have large cars, so we determined to switch to small, Low Emission Vehicles (LEV). More on that purchase in a later post.

Both new cars are being financed as were the old ones. The new cars are costing significantly less than the old ones. We invited both existing finance companies to quote for the new cars.

One of the finance companies (let's call them "A") is one I have been dealing with for more than 20 years. In all, I have financed more than 10 cars through them. We have a perfect history together - I have never had any problems with them nor they with me. Whilst it is a finance company associated with a particular make of car, they do provide finance for any type of vehicle.

The other finance company (we'll call them "B") is one which we tried for the first time 3 years ago when we bought a new car - it is affiliated with the car marque we were buying at the time. Ordinarily, they only finance the particular make of car they are associated with.

Both finance companies came back with quotes which were within $50 a month of each other.

The cheapest though was "B", who also came back and said that, in light of our payment history over the last 3 years, we had an automatic approval and wouldn't need to fill in any type of application or provide supporting documentation. This for two new cars which are in no way related to the car make "B" is associated with.

The more expensive was "A" who also came back and said that, since it was 3 years since we took out the last contract, we would need to provide a full application including financial statements, accountants report and so on.

If there are some universal truths for consumers today (all of whom are time-poor) it is that we want hassle free 'buying' experiences and we want to be valued and recognised.

"A" failed on both counts. They should have recognised me as a valued, long standing (surely 20+ years should count for something??!!) customer and rewarded me with both a discount and an easy path through. Instead they allowed another company to sweep me off my feet simply by doing what "A" should have done as a matter of course.

And who wins the word-of-mouth advantage in this case - "B" of course. "B" is really known as Mercedes Benz Financial Services. Well done to you.

Interestingly the finance manager who I was dealing with at "A'' said in their defence, "It was nothing personal". Of course it was personal!

Businesses spend vast amounts of money to woo and win new customers. A satisfied, loyal and regular customer is one of the greatest assets any business can have. It astounds me when businesses fail to recognise that. When businesses fail in this way they leach value from their business and brand.

The lesson here is to work at recognising your most valuable customers; reward them for their custom (it is cheaper than acquiring a new customer) and build relationships with them.