Price Hike Coming? Don't Mail it Out

Price Hike Coming? Don't Mail it Out

The Forum's Newest Study Says Customers Prefer Personal Notification for Price Increases

NAPERVILLE, Ill., Dec. 5, 2011 /PRNewswire-USNewswire/ -- Would customers react less negatively if their cable TV provider or insurance company personally informed them about rate hikes personally over the phone versus a written letter? A new white paper by The Forum: Business Results Through People suggests that businesses which handle price increases on a personal level have a far better chance of softening the blow and retaining more customers.

The white paper, "Technology and the Human Touch: Moderating the Negative Impact of Price Increases with Outbound Personal Communication," authored by Forum Academic Director Dr. Frank Mulhern of Northwestern University, focuses on a large regional insurance provider that instituted a program in which some agents are first notified by the company about pending price increases and decreases, enabling the agent to personally phone the customer with the news.

"Results show a significant, positive relationship between the percent of customers being contacted about price changes and the level of satisfaction with the agent," Mulhern says. "The effect is twice as large for communications about price increases compared with price decreases."

The Forum published a study last year, "What Drives the Quality of Customer Experiences in Service Marketing? Employees or Corporate Brands?," in which the same insurance company experienced a higher level of customer satisfaction with their agents than the insurance company brand itself, reinforcing the importance of "people behind the product."

"Research in marketing has long shown that personal communications, whether in person or by phone, are more positively perceived by consumers than written communications," Mulhern says. "This is no better exemplified than by consumers' abhorrence of automated telephone answering systems for customer service or service reservations."

According to The Forum President Keith Fenhaus, who is also president of Hallmark Business Connections, the most important lesson of the study is that, "Organizations should consider not using technology to replace human beings and instead use it to enhance the human touch. Technology can make personal communications more relevant and improve the performance of employees in serving customers. Replacing personal communications with automated ones has the opposite effect."

To read the full text of both white papers, visit the Forum's website, www.BusinessResultsThroughPeople.org.

About The Forum
The Forum (www.BusinessResultsThroughPeople.org), affiliated with Northwestern University, is an organization for thought leadership advocating the most effective way business leaders create and sustain organizational value is through partnership with people.

The Forum
601 N. Bond Street, Suite 303
Naperville, IL 60563
(630) 369-7780

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Keith Fenhaus

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Press Contacts:
Susan Peterson (630) 369-7780
Sue@BusinessResultsThroughPeople.org
Sue Voyles (734) 667-2005
sue@logos-communications.com

SOURCE The Forum

The Forum

Web Site: http://www.businessresultsthroughpeople.org/

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